IBPAP expects to fall short of employment, revenue goals this 2018

MANILA, Philippines — The Information Technology and Business Process Association of the Philippines (IBPAP) expects to fall short of employment and revenue goals this year amid uncertainties in government’s move to rationalize fiscal incentives enjoyed by firms.

IBPAP president and chief executive officer Rey Untal said in a press conference yesterday the new employment and revenue numbers for this year so far, are seen to be below where the industry intends to be.

Under the roadmap, he said the industry expects 100,000 new jobs to be created per year.

“I can tell you now it is not as good,” Untal said when asked if the industry is falling short of its targets for the year.

This, as there are uncertainties as firms wait for the final form of the second package of the government’s tax reform program.

“While people are worried that the impact of tax reform is crafted, in reality, issues or uncertainty is already upon us,” Untal said.

He said firms with existing operations have grown, but potential locators are not as many as they used to be.

Under the Tax Reform for Attracting Better and High Quality Opportunities or TRABAHO Bill, which is the second package of the tax reform program, the government would bring down the corporate income tax gradually to 20 percent from 30 percent and modernize current incentives enjoyed by investors.

The bill would remove an incentive enjoyed by firms in the industry which are registered with the Philippine Economic Zone Authority, particularly the five percent gross income earned tax paid in lieu of all taxes, upon expiration of the income tax holidays.

The IBPAP has asked industry players about the government’s tax reform program and based on the survey, industry players consider the incentives they are enjoying now as important.

“Equally, they are saying if there is a radical shift from what we are enjoying from a global competitiveness standpoint, they are not saying they will close shop nor moving out. What they are saying is that the tendency is they will grow less as a result,” Untal said.

He said the IBPAP has cascaded the industry players’ sentiment to legislators and policymakers.

Still, the Philippines remains an interesting location for information technology — business process management firms.

“Very few countries have English competence, Western education system, same legal system, same accounting system and same mindset…It is very easy for multinationals to feel comfortable here,” Global In-house Center Council Philippines board advisor Karen Batungbacal said.

As there is still interest to locate in the Philippines and there is demand coming from existing players, IBPAP intends to continue to cultivate talent to cater to the requirements now and the future.

In line with preparing for the jobs of the present and the future, the IBPAP is holding the first International Innovation Summit (IIS) to be held on Nov.12 to 13 at the Shangri-La Fort which will bring together companies and relevant sub-sectors to discuss the global industry trends and developments, and share insights and best practices including optimizing human resources and technology.

A week before the IIS, the IBPAP will hold another event called It Starts Here:An Industry Awareness Fair, which will convene 2,000 students and potential employers to learn about career opportunities in the industry.

A career portal which would link individuals interested to work in the industry with the available job opportunities would be launched during the industry awareness fair.

Under its industry roadmap, the IBPAP is aiming to generate $40 billion worth of revenues and have 1.8 million direct employees by 2022.

In 2016, the industry had $23 billion worth of revenues and 1.2 million employees.