IT-BPM industry lowers outlook

Amid AI, geopolitical issues

MANILA, Philippines —  The umbrella organization of the country’s Information Technology-Business Process Management (IT-BPM) sector has lowered its revenue and headcount projections for 2028 amid the changing industry landscape.

IT and Business Process Association of the Philippines (IBPAP) president and CEO Jack Madrid said in a briefing yesterday that the group has revised its revenue and employment outlook for 2028 to reflect ongoing changes affecting the industry.

Madrid said IBPAP is now expecting industry revenues to range from a downside scenario of $43.3 billion and best-case scenario of $50.5 billion in 2028.

The projected revenue is lower than the $59 billion aggressive revenue target for 2028 provided under the industry roadmap released in 2022.

For 2027, the new revenue projection is at $45.3 billion, in line with the original baseline estimate of $44.8 billion to $53.3 billion.

For this year, the IBPAP expects revenue to reach $42.3 billion after reaching $40.3 billion last year.

In terms of employment, Madrid said IBPAP now expects industry headcount to reach 1.85 million full-time employees (FTE) under a downside scenario and 2.14 million FTEs under the best-case scenario by 2028.

He said the industry aims to have two million artificial intelligence (AI)- enabled digital Filipino workers by 2028 to capture new industry opportunities.

For next year, IBPAP expects the headcount to reach 1.99 million FTEs, lower than the original baseline estimate of two million to 2.3 million.

As for this year, IBPAP expects the total headcount to rise to 1.96 million from last year’s 1.9 million.

“We need to review where we are and be honest about what we can achieve realistically and those are the numbers today,” Madrid said.

He noted that many changes have taken place both in and out of the country in terms of technology and AI and geopolitical issues that have caused uncertainties and affected investment decisions.

“All the macroeconomics, all the geopolitics happened, which caused many of our buyers and investors not to stop, but it made them make their decisions slower on where to make the investments,” he said.

According to Madrid, more countries are now joining the IT-BPM service race, with South Africa, Egypt, Poland, Colombia, Costa Rica and Vietnam emerging as new players.

“It’s not just Philippines and India anymore. And we need to know what investors see in those locations,” he said.

While AI has affected some entry-level jobs in the industry, he said these employees have been redeployed to new work.

Amid changes affecting the sector, he said the industry sees an opportunity to position the Philippines as the next Global Capability Center (GCC) hub.

GCCs are offshore units established by multinational firms to handle business functions including finance, human resources and IT.

In order to pivot and continue the industry’s growth, he said that talent remains an important driver.

As such, he said there is a need to continue to strengthen workforce skills and capabilities to see higher revenue per headcount.

He also said the industry needs to address ease of doing business and infrastructure challenges, particularly in the countryside, which offers many growth opportunities.

“I still think we have a lot of things going for us and we are one of the only industries in this country growing,” Madrid said.

Earlier, the Asian Development Bank said in a report that sustaining IT-BPM growth in the Philippines would require continued investment in digital and analytical skills, AI and automation integration into training programs, improved business environment conditions and broader digital infrastructure expansion.