MANILA BULLETIN - February 12, 2008

BPO industry seen to keep growing

The business process outsourcing industry in the Philippines will likely grow almost 43 percent this year to bring in $ 7 billion in revenue, government officials and industry executives said yesterday.

A dozen deals are expected to be signed between local business process outsourcing (BPO) firms and foreign companies that would contribute to attaining the industry's target of creating 200,000 jobs this year and 40 percent increase in revenues over last year.

This developed even as President Gloria Arroyo in a keynote address at yesterday's opening of the 8th e-Services Global Sourcing Conference & Exhibition announced that investments in telecommunications infrastructure would form part of the P200-billion total infrastructure budget of the government this year.

The government is set to establish the Philippine Cyber Corridor in various cities outside of Metro Manila to encourage more offshoring and outsourcing firms to locate in the regions.

Business Processing Association of the Philippines (BPA/P) CEO Oscar Sanez confirmed to reporters at the same event that a dozen deals are being forged during the two-day event.

"A dozen business deals are to be signed but these are ongoing leads and in the process to be finalized," Sanez told reporters.

Of the expected business deals to be signed before the end of the two-day conference, Sanez said these have been the results of ongoing discussions in the BPO sector particularly in financial services and call centers.

"These deals would help the industry achieve the growth targets of an additional $ 2 billion in revenues this year to reach $ 7 billion total from last year's $ 5 billion or a 40 percent growth until 2010," he said.

As of last year, there were already 320,000 workers employed by the industry.

Sanez said the P350 million additional training for work scholarship program granted to the Technical Education and Skills Development Authority will be distributed to 54,000 potential hires through scholarship vouchers that they can use to enroll at TESDA-accredited institutions.

Since its inception in 2006, the program by President Gloria Arroyo has already benefited 44,331 call center agents, 6,346 medical transcriptionists, 389 software developers, 254 animators, 50.66 percent of whom have found employment in various BPO firms in the country.

Sanez, however, said that the industry does not measure its growth in terms of investments inflow because it is not capital intensive but rather in terms of computers and people.

With the Philippines being singled-out for its competitiveness in the voiceservices sector, Sanez said the country could leverage on that strength and established with future niches to establish it as a center of excellence in higher value added services.

According to Sanez, the next sectors where the country has the most potential to excel are in software, animation, architecture and engineering services. The software industry grew by 28 percent last year and expected to grow by 50 percent this year.

He further said that as the industry matures, there would be further consolidation where growing BPO companies acquiring smaller ones to expand their operations and yet there are new entrants into the industry that are still learning the ropes.