In this BPO Corner:
IT Services Seen to Post 52% Growth
By B. Chiles-Magkilat

Saying the prospect of IT and IT-enabled services (ITES) is bright, the Board of Investments (BoI) and the private sector are targeting a 52-percent increase in revenues this year to $3.78 billion from last year’s $2.49 billion, a 50-percent increase in investments to PhP16.91 billion over last year’s PhP12.11 billion and as much as a 70-percent increase in the number of seats or jobs over last year.

Celeste Ilagan, BoI executive director for international marketing, told reporters at the press conference launching the eServices Philippines 2006 to be held at EDSA Shangri-La on February 16-17 to be attended by around 2,000 foreign corporate participants and 100 IT and ITES product supplier and service provider exhibitors.

Ilagan said the BoI and the Philippine Economic Zone Authority (PEZA) registered over 70 companies last year with a combined cost of PhP12.11 billion but the bulk is accounted for by call center companies. The biggest call center registered by the BoI is Convergys, which has eight sites in the country and employs 6,000 workers, but Dell Inc. is the biggest registered project last year in terms of project cost.

“The prospect is bright and we just barely scratched the surface,” Ilagan said, noting “there are more niches we can develop.”

Based on the industry and BoI forecast, revenues from the IT and ITES is expected to reach US$3.786 billion in 2006, reflecting a 52-percent increase over last year’s, and is expected to grow by 36 percent in 2007 to reach US$5.145 billion and a flat growth of 37 percent in 2008.

By 2009, the industry revenue is expected to hit US$9.16 billion or 35 percent and slow down to 30 percent growth in 2010 with US$12.412 billion.

In terms of jobs, the industry expects the creation of 103,000 or 43 percent over the 81,000 new jobs created last year.

Coming from a higher base, the growth would start to slow down in 2007 with 36 percent growth in new jobs generated to 121,000 new jobs and fluctuates within the 38-percent to 35-percent band for the period 2008 to 2010.

According to Ilagan, the industry’s growth drivers this year include medical transcription—which has a large potential in the US and Europe—animation business process outsourcing, procurement and virtual office assistance services.

“There will be growth coming from the call centesr but there will also be growth in other sectors, particularly in medical transcription, engineering and design,” said Danilo Reyes, president of the BPO association.

The animation sector has also projected to grow by 20 percent for the next five years. This sector employs between 4,000 to 5,000 animators.

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This article was originally published in the Manila Bulletin on January 13, 2006. Reprinted with permission.