IT-BPM investments plunge 48% in 2017

MANILA, Philippines — New information technology and business process management (IT-BPM) investments registered under the Philippine Economic Zone Authority (PEZA) plunged by nearly half in 2017 as a deluge of concerns have taken its toll on the industry.

 PEZA director general Charito Plaza said total IT-BPM investments for 2017 plummeted by 48 percent to P15.57 billion from P30.44  in 2016.

 The decline came as no surprise as the sector has been plagued with a number of hurdles over the past year.

In late 2016, the industry took a setback with President Duterte’s rhetorics and anti-US pronouncements, while the Trump administration’s protectionist stance early in 2017 prompted a wait and see attitude among investors. 

Clashes between Filipino government troops and Islamist militants in Marawi City, which led President Duterte to declare martial law in Mindanao since last May 23, as well as  the Resorts World Manila attack last June that resulted to the death of at least 37 people, have likewise caused anxiety among IT-BPM investors.

 Lastly, the sector also took a hit with the planned removal of its incentives by the government under the first package of the tax reform plan. 

“We expect 2018 to be a rebound for the business process outsourcing sector especially now that the TRAIN 1 has been approved. But still, the fear is there is a part two that is why everything is still hanging,” Plaza said. 

IT-BPM investments have been a major portion of PEZA’s total investment approvals in recent years. In 2017, it was overtaken by economic zone developments which accounted for 65 percent of the agency’s total investment pledges.

 PEZA finished 2017 with investment approvals of P237.7 billion, 8.89 percent higher from the previous year’s P218.18 billion.

 The investment amount came from a total of 554 projects, slightly fewer than the 572 projects registered with the agency in 2016.

 For this year, Plaza said PEZA is targeting an investment approval growth of least 10 percent, five percent increase in direct employment, and eight percent rise in exports.

 “We hope to put the Philippines in the world map as an interesting investment haven,” she said.