Outsourcing Industry in the Philippines Grows After Meeting 2022 Targets

Philippine call centers and other outsourcing companies beat revenue and hiring targets last year and expect further growth in 2023 as global companies continue to look for ways to cut costs.

The economically important business process outsourcing (BPO) industry, which provides support services to companies from Amazon to Zoom, saw revenue increase 10.3% to $32.5 billion and headcount increased by 10%, according to the IT and Business Process Association. 8.4% to 1.57 million people. Philippines (IBPAP).

Financial services, healthcare, retail, technology and telecommunications have driven growth, he added. The trade association forecast an 8-10 percent increase in revenue and a 7-8 percent increase in headcount.

This year, according to IBPAP, the industry’s workforce could reach 1.7 million and revenues of $35.9 billion, up 8.3% and 10.5%, respectively.

The group said its industry survey found that 83 percent outsourcing companies expected growth in 2023 “despite a possible global recession”, while 17 percent “were neutral about their forecasts”.

The survey also showed that organizations will continue to outsource and use global business services to cut costs, IBPAP said.

Better-than-expected results in 2022 are the latest good news for the sector. In September, the government allowed BPOs working from home to maintain tax breaks. Many outsourcing companies previously operated under an investment regime that required staff to work locally to enjoy tax breaks, and the hybrid work arrangement was originally a temporary measure in response to the coronavirus pandemic.

Amid intense lobbying to make hybrid work permanent, IBPAP has pledged to create 2.5 million jobs and $59 billion in annual revenue by 2028, the end of Philippine President Ferdinand Marcos Jr.’s six-year term.

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The lofty targets come as the country’s call center industry faces a number of challenges such as automation, difficulty in hiring skilled workers, and growing competition from other outsourcing destinations such as India, Poland, and South America.

“We still have a long way to go, but [the] Philippines [industry’s] The stellar results in 2022 bring us closer to creating 1.1 million new jobs for Filipinos,” said IBPAP President and CEO Jack Madrid.

“It is also a testament to the collective effort that the private sector, government and academia have put in to keep the industry as an indispensable pillar of the economy,” he said.

A version of this article was first published by Nikkei Asia. © 2023 Nikkei Inc. All rights reserved.