Gov’t says finding ways to counter ‘plateauing’ BPO sector

MANILA, Philippines — The Philippines’ business process outsourcing industry is “plateauing,” the government said Tuesday as it seeks ways to develop higher skills needed for the sector to move up the value chain.

In a press conference, Socioeconomic Planning Secretary Ernesto Pernia stressed the need to open up the country’s education sector to foreign participation in order to buck the steadying growth of the BPO industry.

In 2017, the BPO sector grew 12.3 percent, Pernia said.

“This is why we need to open our education sector and ramp up skills training programs towards greater learning opportunities for our current and future work force,” he said.

“This will help in upgrading the technical know-how and the skills needed to counter the plateauing of the IT-BPM (International IT and Business Process Management) sector’s development,” he added.

The country’s gross domestic product — or the value of all finished goods and services produced in the country — grew 6.6 percent in the fourth quarter, decelerating from the upwardly revised 7 percent in the previous three months.

The fourth quarter figure placed the country’s full-year GDP performance to 6.7 percent, slower than 2016’s 6.9 percent but still within the government’s 6.5-7.5 percent growth target range in 2017.

READ: Philippine economy grows 6.7% in 2017

According to Pernia, the “major contributing factor” to the economic decline was the miscellaneous services sector, which includes the BPO sector — once dubbed as the “sunshine industry” of the country.

The Information Technology and Business Process Association of the Philippines earlier said the BPO sector is projecting a rate of revenue growth slowing down to the single digits until 2022 as the industry matures.

“Well it’s a sign of maturation of the sector, of the industry... we said that it’s probably should be a signal that the BPO sector should move into higher level skills on higher value added services,” Pernia explained.

For her part, National Economic and Development Authority Undersecretary Rosemarie Edillon said the only way to reverse the stable growth rate of the sector is to “diversify.”

“So on the part of the government, actually the economic team... we have introduced some reforms especially with respect to the higher level skills development because that’s what you need in order to move up the value chain,” Edillon said.

“So you need skills on big data analytics, skills for, I guess, AI (artificial intelligence). Skills for more of the app development, so not the voice part of the BPO,” she added.

“And for this, we will need more outfits to offer the training for that. So we need to beef up our skills.”

Pernia earlier said NEDA would push for an aggressive liberalization of the Foreign Investment Negative List, including in the practice of professions for highly-skilled academic workers such as university professors.

READ: Duterte orders NEDA Board to ease foreign ownership limits