IBPAP reviews employment, revenue targets

MANILA, Philippines — The Information Technology Business Process Association of the Philippines (IBPAP) is reviewing its employment and revenue targets as uncertainties on the government’s planned rationalization of fiscal incentives are seen to continue to affect investors’ decisions to set up or expand operations in the country this year.

“IBPAP is discussing and finalizing the plan for the IT-BPM (information technology-business process management) Roadmap 2022 recalibration. Our target is to have an updated roadmap within the next few months,” IBPAP president and chief executive officer Rey Untal said in an email.

Under the roadmap, the IBPAP is aiming to generate $40 billion worth of revenues and have 1.8 million direct employees by 2022.

In November last year, Untal said he made a recommendation to the IBPAP’s board to undertake a recalibration of targets under the roadmap as the industry’s performance is falling short of the projected growth.

The IT-BPM industry generated  $23.8 billion worth of revenues and had 1.19 million employees for the period of January 2017 until June of last year.

Among the reasons cited for the industry’s performance was the uncertainty of investors on the government’s plan to rationalize incentives under the tax reform program.

The Tax Reform for Attracting Better and High Quality Opportunities (TRABAHO) bill approved on third and final reading at the House of Representatives seeks to bring down the corporate income tax rate gradually to 20 percent from 30 percent.

It will also bring changes to the incentives regime, including the removal of the five percent tax on gross income earned paid in lieu of all national and local taxes by IT-BPM players registered with the Philippine Economic Zone Authority.

“While the TRABAHO bill has not been passed in 2018, we expect uncertainties related to the rationalization of fiscal incentives to continue, which in turn could impact investment decisions to retain or locate operations in the country this year. Last year, we saw its effects when we were affected by the wait-and-see attitude of investors and potential locators due to a number of geo-political issues and uncertainty over the incentives rationalization which led to our slower-than-expected growth for the past 18 months,” Untal said.

Apart from revision of targets under the roadmap, the IBPAP is also looking at additional measures or interventions to promote the growth of the industry.

While the recalibration is being undertaken, IBPAP will also continue to hold a dialogue with policy makers and legislators to convey the industry’s point of view on the planned reform.

“We believe that the government’s help and support is important in attracting investments and in strongly positioning ourselves as a preferred country of destination in the business processing global market,” Untal said.