IT-BPM sector barely grew in 2020

MANILA, Philippines — The country’s information technology and business process management (IT-BPM) sector barely grew in terms of revenue and employee headcount in 2020 due mainly to the pandemic.

For this year, however, the IT-BPM sector is optimistic about growth as some companies start to plan their expansion.

The IT and Business Process Association of the Philippines (IBPAP) said the sector’s revenues reached $26.7 billion last year, barely up from the previous year’s $26.3 billion.

Likewise, industry headcount grew by only 1.8 percent to 1.32 million in 2020 compared to the 2019 level.

“These numbers come as very welcome news for the industry especially with the country’s gross domestic product slipping by 9.6 percent in 2020,” IBPAP president and chief executive officer Rey  Untal said.

“When IBPAP commissioned the recalibration study in July 2020, we already knew that the far-reaching effects of the health crisis did not spare the IT-BPM sector. The fact that it reached this level of growth by yearend is proof of the industry’s resilience and fundamental role in the Philippine economy,” he said.

While hospitality and travel have been hit hard by the pandemic, the IBPAP said healthcare, e-commerce and retail, banking, finance and administration and insurance flourished and enabled the growth in the IT-BPM sector’s revenue and workforce.

Based on a survey conducted by the IBPAP, the sector has a positive outlook for this year, with  majority or 87 percent of IT-BPM companies expecting to see five to 15 percent growth for this year and 13 percent anticipating flat growth.

A number of firms are also planning to expand in the countryside in the next 12 to 18 months.

As the pandemic persists, majority of the IT-BPM firms said hybrid working models would continue to prevail this year and even until next year.

At present, the IT-BPM sector is operating at a 70-30 split between work-from-home and on-site work.

The IBPAP said this arrangement may change depending on company policies, government mandates, and digital capabilities.

IBPAP said IT-BPM firms are also focusing on optimization of existing operations, digital transformation, and the upskilling of the workforce this year.

To attain the sector’s five percent headcount growth and 5.5 percent revenue growth projection per year from this year until next year, a recalibration study by Everest Group identified steps that need to be taken.

Among these is the stronger pivot towards becoming a more digitally enabled nation to be globally competitive and be a prime investment destination.

In addition, there should be investments for talent attraction and development particularly for domain and digital skills, as well as government support in terms of policies for an environment conducive for business.

There is also a need to enhance the sector’s value proposition through strategic marketing and targeted investor relations initiatives and to fast-track projects that would improve telco, power, transportation networks and other infrastructure.