RP's BPO sector seen growing to $100-billion industry in 10 years

MANILA, Philippines - The National Economic and Development Authority (NEDA) sees the business process outsourcing (BPO) sector in the country growing to a $100-billion a year industry in 10 years if the right investments are made by the next administration.

NEDA Director Dennis Arroyo, in a briefing held at Malacañang yesterday, projected that the country’s BPO industry could take up a fifth of the global industry of $500 billion by 2020 based on the way the sector is growing at this time.

From just a $0.02-billion industry in 2000, BPO has quickly grown to $1.5 billion in 2004, $4.9 billion in 2007 and $7.3 billion last year.

BPO now represents close to five percent of gross domestic product and according to Arroyo, it has multiplier effects in other sectors that contribute to the overall economy.

The Philippines is now second only to India which hosts a $9-billion BPO industry. Arroyo said this could easily be surpassed by the Philippines with its inherent advantages over its Asian neighbor.

He pointed out that the Philippines has an advantage over India in terms of proficiency in the English language as well as the overall talent in various fields such as animation.

Among the issues being faced by India that would work in favor of the Philippines are the tremendous pressure on talent and infrastructure; rising salaries and attrition levels; quality issues in voice services; and infrastructure bottlenecks.

However, India enjoys a slight edge in cost competitiveness over the Philippines.

Arroyo said that the challenge is for the next administration to put up the necessary investments to sustain the growth of the country’s BPO industry.

He said the government should continue to expand its list of next wave cities or investment destinations for BPO and ICT in general.

Congress was also urged to pass the proposed law to create a Department of Information and Communications Technology, which would help ensure the sustained development of the ICT sector.

Arroyo also emphasized the need to expose students to technology at a younger age, particularly at the public schools by setting up more Internet-ready computers.