Outsourcing sector remains resilient despite pandemic

The information technology-business process management remains resilient and will continue to grow as it transitions into the new normal amid the unprecedented events caused by the COVID-19 pandemic, industry players said Tuesday.

Information Technology and Business Process Association of the Philippines president and chief executive Rey Untal stressed the industry’s non-stop contribution to the economy at the height of the lockdown.

Recessions all over the world triggered by the coronavirus pandemic are compelling many countries to offshore more jobs in the IT-BPM industry, and the Philippines has a great opportunity to acquire a good fraction of these jobs, Untal said.

Untal said while 2020 presented major challenges, the industry would continue to be a major growth driver of the Philippine economy, led by sub-sectors such as animation and game development, contact center and business processing, global in-house centers, healthcare information management, and information technology and software.

Untal credited the government, including the DTI, BOI and Philippine Economic Zone Authority for including the BPO sector as among those recognized by the government’s COVID-19 Inter-Agency Task Force as essential businesses that were allowed exemptions during the ECQ period.  

“That allowed us to operationalize two work streams: the on-site skeletal model, as well as the work-from-home capability,” he said.

Untal participated in the recent webinar “Philippine IT-Business Outsourcing Opportunities: Global Business Processes Powered by the Philippines” organized by the Trade Department with the Philippine Embassy in Washington D.C., as part of the campaign to promote US investments in the Philippines.

Untal said 2019 was a strong year for the IT-BPM industry, growing by 5.8 percent in terms of full-time equivalent headcount and 7.1 percent in revenues.

“Growth in 2019 was driven, in part, by incumbent third-party operators that continued to expand. We saw a bit of expansion in healthcare,” he said. 

“Likewise, we saw a number of multinational global in-house centers investing and/or expanding in the Philippines. Lastly, if we look at the creative sectors, specifically animation and gaming, they’ve had their fair share of growth as well,” he said.

Healthcare Information Management Association of the Philippines president Rogelio Salazar Jr. said that this year, 80 percent of HIMS businesses achieved on-site productivity levels.  

Salazar said the HIMS segment was expected to post the highest revenue and FTE headcount growth range for 2019 to 2022, showing its strength as a high-value contributor to the national economy. 

“Over the next few years, we foresee the HIMS sector in the Philippines continuing to grow at a much faster rate than the IT-BPM industry as a whole. That growth will primarily be led not only by third-party players but also more GICs looking at the Philippines for redundancy, scalability and adaptability in their operations,” he said.

Jessica Shields, head of international business operations of Dexcom Philippines Inc., cited talent availability, labor arbitrage and cultural fit as factors in Dexcoms’s decision to establish operations in the Philippines. 

She also highlighted the strategic partnership between industry and the government, enabling the sector to thrive even during the pandemic. Dexcom, headquartered in Silicon Valley, invested in GIC operations in Taguig in January 2019 and is one of the world leaders in diabetes care technology.

Ninety-five participants from North America and other parts of the world attended the webinar, while the Facebook Live video garnered almost 5,000 views as of this writing.

The industry also noted that the shifting investment landscape in the ASEAN and elsewhere presents an opportunity for the Philippines.

Topics: COVID-19 , Information Technology and Business Process Association of the Philippines , Rey Untal , ASEAN , Dexcom Philippines , Rogelio Salazar Jr
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