Philippines IT-BPM industry eyes sustained growth in 2026

CEBU, Philippines — The Philippines’ information technology and business process management (IT-BPM) industry is heading into 2026 with expectations of sustained expansion, underpinned by higher-value services, wider adoption of artificial intelligence (AI) and renewed investor confidence, even as global growth remains uneven.

After outpacing the global market in 2025, the sector is projected to add momentum in 2026, with export revenues seen rising to about US$42 billion and employment approaching 2 million, according to the IT & Business Process Association of the Philippines (IBPAP).

The industry ended 2025 with roughly 1.9 million workers and about US$40 billion in exports, reinforcing its position as one of the country’s largest foreign-exchange earners.

“Despite macroeconomic headwinds, the Philippine IT-BPM industry grew faster than the global market,” IBPAP President and Chief Executive Officer  (CEO) Jack Madrid said, citing employment growth of about 4 percent and revenue growth of 5 percent last year.

That performance has set the base for what the group expects to be another year of steady, though more complex, growth.

The industry now accounts for more than 8 percent of GDP (gross domestic product) and its next phase is increasingly defined by the shift away from transactional work toward analytics, business intelligence, project management and transformation support.

The continued build-out of global capability centers is expected to be a major driver in 2026, as multinational firms deepen their presence and assign higher-value mandates to Philippine operations.

AI is also becoming central to the outlook. Wider use of AI tools is improving productivity and service quality, while raising demand for digital fluency, problem-solving and advanced technical skills. That dynamic is intensifying competition for talent, which industry leaders see as the main constraint on 2026.

To address the gap, IBPAP is expanding partnerships with government agencies and schools to accelerate workforce development, including enterprise-based training programs and skills progression initiatives designed to align graduates with industry needs.

According to Madrid, the effort is aimed at ensuring the supply of talent keeps pace with demand as companies scale more sophisticated work in the country.

Policy reforms are providing additional support to the 2026 outlook. Recent changes to investment incentives under the CREATE MORE law and clearer guidance on work-from-home arrangements from the Philippine Economic Zone Authority (PEZA) have improved perceptions of regulatory stability, a key consideration for multinationals making long-term location decisions.

Industry groups are also engaging policymakers on cybersecurity rules to balance resilience with competitiveness.

Investor interest is increasingly focused on longer-term expansion rather than short-term cost plays, with growth expected to continue spreading beyond Metro Manila to regional hubs such as Cebu, Davao and Iloilo.

“What got us here will not be enough to take us where we need to go next,” Madrid said.

For 2026, he said, the industry’s priorities will be scaling AI responsibly, expanding global capability centers and accelerating upskilling to keep the Philippines at the center of global services delivery. — (FREEMAN)