Phl IT-BPM needs to step up

Despite the pernicious corruption that continues to plague the country, our economic growth has remained resilient due to two things – remittances from Filipinos living and working abroad and the country’s strength in business process outsourcing that has placed us among the top two in the world next to India.

At the recently concluded International IT-BPM Summit held last week at the Okada Hotel, the IT-Business Process Association of the Philippines (IT-BAP) and IIS 2025 president Jack Madrid issued a global wake-up call “to sharpen our edge, to deepen our partnerships, to move with urgency in a world transforming all around us.”

Disruption, Madrid stressed, “is everywhere – next-generation agents, geopolitics, rising costs, shifting customer expectations. These are not just challenges for the Philippines. They are global realities. Our strength lies not in avoiding them but in how we respond to them.”

In the Philippines, where the IT-BAP has a Roadmap 2028, he said, the industry has been able to create 450,000 new jobs and generate an additional $10.5 billion in revenues, with the Philippines leading in global IT-BPM growth at five percent this year.

The country, Madrid noted, stands at the forefront of two powerful opportunities: “the integration of agentic and artificial intelligence (AI) into global business services and customer experience (CX). By 2026, the industry is projected to reach $42 billion in revenues and employ 1.97 million Filipinos, reinforcing the country’s leadership as a global services hub.”

This year alone, he said, 80,000 new jobs were created, earning $2 billion in revenues, posting a growth of four and 5.3 percent. The Philippines, he said, has shown “steady, resilient growth, outpacing global growth of three percent. By 2026, we project $42 billion in revenues and close to two million jobs, with the IT-BPM industry contributing over eight percent of gross domestic product.”

As such, Madrid said, “the Philippine IT-BPM industry is too big to fail. But just as important, it is too important not to evolve. We cannot afford complacency. We cannot allow the sunset industry narrative to take root. Because we are growing faster than the global market. The world continues to see us as a trusted indispensable partner. Our challenge is not survival. Our challenge is to remain indispensable – by strengthening our value.”

He specifically cited the next-generation agents which face the challenge of AI.

At present, Madrid said, “only 12 percent of Philippine firms report high AI maturity. Nearly half are experimenting but not scaling. Four in 10 are still in early stages. By 2028, more than 70 percent expect to reach high maturity. That is the size of our opportunity. The winners will not be those chasing demos. The winners will be those who rewire workflows with AI, with humans at the core – closing the skills gap in cloud, cybersecurity and automation.”

He cited a global MIT study that showed 95 percent of enterprise AI pilots fail, “not because the technology is weak, but because companies and vendors don’t know their own processes deeply enough. And here is our advantage: the Philippines knows processes. We understand industries. And we bring empathy and trust that no machine can replicate. That is our edge.”

AI, Madrid said, “is not the apocalypse some fear, nor is it the silver bullet some promise. It is a swing factor. It will reshape roles, yes. But the story is not replacement – it is augmentation. And for the Philippines, that is the opportunity: because what we bring – deep process knowledge, cultural empathy and trusted human interaction – AI cannot replace.”

The IBPAP, he said, is calling “for a National AI Strategy that will ensure adoption is not fragmented or left to chance but guided by a coherent agenda. A strategy that builds digital and AI skills at scale, establishes governance and trust frameworks, and enables industry-wide transformation. This is how we ensure the AI story for the Philippines is a story of empowerment – for workers, for businesses, for our economy.”

However, Madrid warned, another force is reshaping the IT-BPM industry: global capability centers or GCCs, which are expected to grow from $100 billion in 2024 to $155 billion by 2027, with four million employees.

The Philippines, he said, has been home to GCCs for years, “but we are seeing a rise in new setups. India dominates this space, showing how GCCs have evolved from cost centers to strategic engines of innovation. The Philippines can do the same. We already have the talent, the scale, the cost efficiency and the ecosystem maturity. In fact, we are already second in the world, built on our strength as the CX capital.”

To become a strong GCC player, Madrid outlined six necessary steps to be taken: “First, policy, talent and markets must be in sync. Public-private alignment is non-negotiable. Second, innovation must go beyond Metro Manila. We must build regional hubs of excellence. Growth must be inclusive and nationwide. Third, we must redefine industry leadership – from service providers to co-creators of global solutions. Filipino voices must shape not just delivery but strategy and standards.

“Fourth, we must scale our GCC footprint – moving up the value chain from cost efficiency to capability creation, from execution to decision-making. Fifth, we must ensure future-ready talent, upskilled in digital fluency, critical thinking and problem-solving. Every digital Filipino worker must be rewired for the AI era.

“And sixth, we must keep the human at the core. What sets the Philippines apart is not just technology but ingenuity, empathy and trust. AI must serve people, not replace them.

“Growth alone will not secure our future. Transformation will. We must measure not just revenues and jobs but value per capita, capability building and global competitiveness,” Madrid concluded.