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Tuesday, January 31, 2012

Call centers will post 8.6% of GDP growth by 2016

BY PAUL ICAMINA

PHILIPPINE call centers will contribute 8.6 percent tothe GDP by 2016, Science Secretary Mario G. Montejo said yesterday.

"This is our estimate of the value of services that are done in the Philippines then exported by theinformation technology and business process outsourcing (IT-BPO) industry," said Gigi Virata, senior executive director of the Business Processing Association Philippines (BPAP). "Then we compared it with total GDP and came up with the 8.6 percent figure."

"That is big," she told Malaya Business Insight, "as big as the current contribution of Filipinos working overseas."

The World Bank estimates that the Philippines received in 2011 about $23 billion from 10 million Filipinos working abroad.

According to BPAP figures, export revenues from theIT-BPO industry is expected to grow from $10.9 billion in 2011, or 5.4 percent of GDP, to $25 billion, or 8.6 percent of GDP, by 2016 when the national economy is expected to be worth $277 billion.

It also translates to 4.5 million jobs by then, up from 2.2 million jobs in 2011, Montejo said in a press briefing.

The industry posted a 22 percent growth rate in 2011, said Alejandro P. Melchor III, deputy executive director of the Information and Communications Technology Office (ICTO), which is part of theDepartment of Science and Technology.

BPO SHARE $11B

In 2011, the BPO industry contributed approximately $11 billion in export revenues, about 640,000 direct jobs and around 1.5 million indirect jobs like construction and services, he said.

"US anti-outsourcing legislation is unlikely to pass," Melchor said, adding the move is related to US presidential elections this year to appease American voters worried over domestic unemployment. "It is unlikely to stop outsourcing on the slim chance thebill passes," he added.

The Philippines intends to become the IT-BPO market leader in the United Kingdom and Australia, Melchor said, adding it will expand its footprint in Europe and Japan as well.

The Philippines surpassed India in 2010 and is nowthe world leader in voice call centers.

The IT-BPO industry is recession-proof and resistant to the global economic slowdown, Melchor said.

"We remain optimistic with the annual double-digit growth in the past 10 years regardless of the global economic situation," said Louis Casambre, executive director of ICTO.

"We intend to attain world leadership in four more fast-growing services," Melchor said, pointing to health care information management, finance and accounting, human resources and animation and game development.

The country also intends to double its IT market share, engineering service and multilingual outsourcing, he said.

WHAT I.T. IS

IT outsourcing services range from analysis and design to network operations, softwate development to gaming. Business process services include contact centers, banking and insurance, telecoms, health care, oil and gas, animation and legal process and patent research.

Engineering services cover product concept, simulation and design, computer-aided design and manufacturing, embedded software, architecture design and building management models, among many other services.

"We aim to augment to triple the size of the IT talent pool by 2016, improve employability by 200 percent and develop the core skills required by the industry," Melchor said, pointing out the size and employability of the talent pool is a key constraint to growth.

"The Philippines have matches up very well with some of fastest growing segments of the global IT-BPOindustry," Melchor said. "The demand is tremendous, and the Philippines has risen as a top contender for the demand."

Montejo said the industry is now focusing on the countryside, in the so-called "new wave" hubs of Cordillera-Ilocos in San Fernanco, La Union, Dagupan and Baguio; Central Luzon (Angeles/Clark, Cabanatuan, Olongapo/Subic and Tarlac); Western Visayas (Bacolod and Cebu); Central Visayas (Cebu, Lapu-Lapu, Mandaue, Dumaguete and Tagbilaran); Davao-General Santos; and Metro Manila.

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