The World Bank has ranked the Philippines among the best performers in the services exports, particularly in the business process outsourcing (BPO) sector. But it has urged further reforms in the travel and tourism sector if the country intends to sustain growth moving forward.
Based on the past IT industry, while the development of service sectors was traditionally assumed to be confined to developed countries that have mature markets and industrial sectors, it has recently been found that with the appropriate educational and other supporting bases, developing countries like India and the Philippines can also take this path. Specifically, the rise of IT-enabled services (ITES) outsourcing or BPO has allowed these countries to develop a new kind of export sector focused on business services.
The principal strengths of the Philippine IT industry include a well-educated, price-competitive labor force, English proficiency, a growing track record of successful IT work, fast-growing telecom infrastructure, the government interest in the industry, less regulation than some neighbors, good capabilities for dealing with foreign partners, and strong entrepreneurship.
This increasing demand for such services made the Philippines the third largest player in BPO in the world, accounting for 15% of the global BPO market after India (37%) and Canada (27%). Considered a top offshore BPO destination, the country boasts one of the fastest-growing outsourcing industries in the world.
The Philippine business process outsourcing sector currently employs close to 500,000 people and generated about $9 billion worth of exports in 2010. The industry’s target in terms of annual revenue is $25 billion by 2016 and a direct workforce of 1.3 million. It is with no doubt that the future of the country’s BPO industry has never looked brighter.