Phl services sector growing dramatically

MANILA, Philippines -  The Philippine services sector has been growing dramatically over the past years, narrowing the employment gap while pushing export growth.

Citing the latest Bangko Sentral ng Pilipinas (BSP) data, the Department of Trade and Industry (DTI) said moving up the value chain in the services industry will sustain the momentum it has gained over the years. The Philippine services industry - such as IT, BPO as well as tourism and transport services - grew by 20 percent in 2010 and generated $13.2 billion and 1.6 million jobs last year.

According to the DTI, one of the urgent tasks for the country is to develop human capital needed to fill the hundreds of thousands of jobs that the services sector will need every year. The demand for skilled workers, supervisors, middle managers, and a wide array of knowledge workers in various disciplines and complex services will continue to rise.

Based on a World Bank (WB) report, the Philippines is one of the best performers in the services sector worldwide. Business process outsourcing, in particular, showed impressive performance in the past decade, catapulting the Philippines to number three in the world with a 15 percent share of the global BPO market, after India (37 percent) and Canada (27 percent).

The success of the Philippine services industry, specifically in IT-BPO, has been attributed to several basic factors, which taken together, gives the Philippines a competitive advantage. These include: a large pool of highly qualified, English proficient work force; vibrant telecommunications infrastructure; policy and regulatory environment conducive for growth; organized and aggressive private sector willing to work with government; and deliberate government intervention in support of the sector from investment incentive policies to marketing and promotions through the DTI’s Foreign Trade Service Corps.

A decade ago, services exports contributed only nine percent of total Philippine exports and in 2010 rose to 28 percent. During this period, services sector grew at annual average of 12 percent - thrice as fast as the country’s merchandize (goods) exports. From about 5,000 work force in 2001, the industry employed close to 526, 000 people and generated $11-billion revenues in 2010. Since 2006, the Philippines has been a net exporter of services, an accomplishment very few developing countries have matched. 

Following the success of the BPO industry, Trade and Industry Secretary Gregory L. Domingo has announced last year that the DTI will continue to search for the next BPO that will help boost the country’s revenues and generate jobs.

Reports from the DTI commercial post in Tokyo said that the Japanese government has commended the Filipino IT professionals for staying behind while others have left their jobs after the quake and tsunami incidents. The Filipino IT professionals stayed on to help the Japanese banking system continue their operations in the aftermath of the quake.

Under the Philippine Export Development Plan (PEDP), the services industry is projected to grow by 24 percent in 2016.