Phl targets 10-fold hike in IT revenues over 8 yrs

MANILA, Philippines - The Aquino administration has laid down the groundwork for the implementation of a roadmap for a 10-fold increase in revenues by the information technology and software industry over the next eight years.

Department of Trade and Industry (DTI) Secretary Greg Domingo said in his keynote address during a economic forum sponsored by Philippine Development Foundation (PhilDev) entitled “Silicon Valley Comes to the Philippines” that the government hopes to raise the revenues of IT outsourcing to $10 billion by 2020 from the current level of $1 billion.

Under the “Software 2020 Plan,” Domingo said the industry accounted for about $1 billion of the $11 billion revenues booked by the information technology – business process outsourcing (IT-BPO) last year.

“That is what we want to grow, to $10 billion by 2020,” Domingo stressed.

According to him, there are about 400 companies involved in IT outsourcing in the Philippines of which about 54 are engaged in software development.

Based on a plan crafted by the Business Processing Association of the Philippines (BPAP), revenues of the entire IT-BPO industry is seen growing to $25 billion by 2016 from the current level of $11 billion, with job generation reaching 1.3 million from about 635,000.

To achieve the 2020 vision, the DTI chief said the government needs to focus on three major categories: infrastructure, education and global link.

He said the deregulation of the country’s telecommunications industry in the mid-1990s resulted in the massive expansion and modernization program by major players led by dominant carrier Philippine Long Distance Telephone Co. (PLDT) and Ayala-controlled Globe Telecom Inc.

“We need the right infrastructure and environment to be able to attract investments for our digital vision. The deregulation allowed true competition to enter and we would not be here today if we did not deregulate the industry,” Domingo said.

On the education side, he explained that the government has started the K+12 scheme, putting the country’s education system at par with international standards as well as the increase in the budget of the Department of Education (DepEd).

“The government realizes that shortcoming a lot of steps have been taken to address this weakness,” he said.

Domingo said it is high time for the Philippines to implement the program with the political will of President Aquino to fight graft and corruption and on the back of the country’s sound macroeconomic fundamentals.

He pointed out that the gross domestic product (GDP) growth of 6.1 percent booked by the Philippines in the first half of the year is the fastest in Asia and the third fastest in the world, prompting rating agencies to upgrade the country’s investment credit rating.

Standard & Poors, Moody’s Investor Service and Fitch Ratings have upgraded the country’s sovereign credit rating to one notch below investment grade since the start of the Aquino administration in 2010.

“We hope to get an investment grade credit rating in the next 12 to 18 months,” he said.