In this BPO Corner:
BPO Earnings Expected to Increase 52%
By Maricel E. Estavillo

The country’s business process outsourcing (BPO) industry will generate a total of 1.2 million jobs and US $12.4 billion in sales by 2010 from present total work force of 233,000 and US $2.5 billion in annual sales, according to the latest joint forecast from the government and the private sector.

For this year, the industry is expected to employ 336,000 people, including 103,000 new jobs generated, reflecting a 44 percent growth from last year. Total industry revenues will reach US $3.8 billion by yearend, according to the forecast.

Industry group Business Process Association of the Philippines (BPA/P), the Board of Investments (BoI) and the Commission on Information and communications Technology (CITC) have worked together in drafting the forecast for the industry.

BPO has been defined as the process of tapping another unit to take responsibility of one’s business process, usually using information technology in processing the requirement and the Internet to transmit the transaction.

Included in this industry are companies engaged in the business of call centers: back-office operations; medical, legal and data transcription; digital animation; software development and engineering design.

Main Driver

In the BPO industry, call centers will remain the largest employer in the next five years, accounting for 431,000 jobs out of the total 1.2 million jobs in 2010. Back office, medical transcription and digital content will follow with 342,000, 69,000, and 46,000 jobs generated in the same year.

Government and industry leaders who attended the press briefing [on January 12, 2006] were all bullish about the prospects of the business this year.

“We have barely scratched the surface of the global market. We expect a lot more companies to come to the Philippines this year, with anticipated growth of 50 percent last year,” said Celeste B. Ilagan, BoI director for international marketing.

BPA/P President Danilo Sebastian L. Reyes said non-call center business will drive most of the industry growth this year, particularly in the area of back office processing.

More Opportunities, but ...

“We can develop more niches. We just need to make sure that we have sufficient manpower. We are not talking about volume here, we need to increase the number of quality applicants,” he said.

Also the director and country manager of call center company ClientLogic Philippines, Mr. Reyes confirmed the nagging problem of manpower supply.

In Baguio City, where ClientLogic operates, he said the company is now working with the Labor Department and Technical Education and Skills Development Authority in coming up with a program to address this manpower concern.

More Alternatives

Still unsuccessful call center applicants can try data processing jobs, where the hiring rate is higher at 15 percent to 25 percent, compared to the 2 percent to 5 percent hiring rate in the call center industry.

For the digital animation industry, the Animation Council of the Philippines Inc. President Marilyn Montano said it is targeting to reach US $40 million in revenues in 2010, employing 25,000 people from the present 4,000 people and revenue of US $7 billion.

Evelyn Abat, president of the Medical Transcription Industry Association of the Philippines, Inc., said the industry will start to explore cities and provinces outside Metro Manila to prepare for the anticipated demand.

The software industry, though the Philippine Software Industry Association, is still working on a study to assess the prospects of the industry.

PhP 200-M New Deals

This February, trade promotions agency Center for International Trade Expositions and Missions (CITEM) expects to generate PhP 200 million in new deals from its two-day 6th e-Services Philippines exhibit and conference. This will take place in February 16 and 17 at the EDSA Shangri-La Manila in Mandaluyong City.

“The meeting and exhibit is expected to bring together approximately 100 IT and ITES (IT-enabled services) product supplier and service provider exhibitors, foreign delegates from the US, the United Kingdom, Sweden and Japan, and around 2,000 corporate participants,” said Trade Department assistant secretary Felicitas Agoncillo-Reyes.

The e-Services conference last year generated an estimated PhP 212 million in new deals.

Discussions

In the February forum, Avinash Vashinta, founder and managing director of outsourcing consultancy neoIT and author of Offshore Nation, is set to deliver a presentation on forging strategic alliances between the Philippines and India.

Also, Nigel Roxburgh, founding director of UK’s National Outsourcing Association, will speak on outsourcing opportunities in the UK. Other local and foreign resource speakers are expected to talk during the conference.

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This article was originally published in Business World on January 13-14, 2006, page S1-7. Reprinted with permission.