Within a span of five years, the country’s business process outsourcing (BPO) industry will overtake overseas Filipino workers’ (OFWs) remittances as the main pillar of the Philippine economy.
“The impact would be more significant when the workers move to the regions such as Clark, Iloilo and Davao because of lower operating cost and better quality of life,” said Fred Rara, KMC Savills senior manager, research and consultancy in a news briefing on Wednesday at the Bonifacio Global City.
“In fact, by 2028 the BPO sector would be the country’s biggest employer with 2 million employees,” Rara predicted.
Despite inflation besieging the Philippine economy, Rara said the BPO industry would continue to be driven by US companies’ strategy to move a big number of services-oriented jobs to the country as part of achieving cheaper operating cost and address the shortage of labor in the United States.
“Around 300,000 jobs are needed to be filled up in important sectors such as accounting, finance, health, information technology and software development. These are high-end jobs or the knowledge process outsourcing type that are available to highly skilled Filipinos,” KMC Savills Inc. Managing Director Michael McCullough told the BusinessMirror on the sidelines of the news event.
Moreover, Rara said Filipinos could also capture opportunities in data science, as digitalization is a pervasive force in the global economy. “I think American pharmacy benefit manager and health care provider Optum plans to hire Filipino data scientists for its local operations,” he said.
McCullough said the country must strengthen its science, technology, engineering and mathematics (STEM) curriculum to develop a substantial pool of data scientists to maximize the opportunities being offered by this form of outsourcing.
According to the IT & Business Process Association of the Philippines (IT-BPAP), the BPO industry was the biggest job generator with 1.44 million direct jobs and 3.61 million indirect jobs in 2021. As an economic catalyst, it was a significant contributor to the local economy with $29.5 billion in revenues representing a 7.5 percent contribution to the gross domestic product of the country.
In the 2019 Tholons Services Globalization Index, the country ranked fifth in Top 50 Digital Nations, while Manila placed second in Top 100 Super Cities. Cebu City, the Queen City in the Visayas, placed 12th in Top 100 Super Cities.
During same news briefing, Rara pointed out that the Metro Manila office market rebounded in 2022 with a net absorption of around 270,900 square meters and a reversal from the negative take-up a year prior. “KMC Savills forecasts net absorption to slightly increase in 2023 but may be isolated in the top submarkets,” he said in his presentation.