BPO sector misses P120-billion business opportunities amid lockdown

The information technology and business process outsourcing sector reported P120 billion worth of missed opportunities and unplanned costs while on strict lockdown.

IT Business Process Association of the Philippines president and CEO Ray Untal said that while the sector “was able to increase its productive capacity, while maintaining strict work and health protocols to ensure the safety and welfare of the employees, the lockdown expectedly took a huge toll as the industry had to take on extraordinary unplanned costs.”

“During the past seven to eight months, the industry has spent a sizable sum on accommodations, again, primarily during the early days of the quarantine continuing provisions of shuttle services, and other work from home arrangement, and execution of expenses as well as missed opportunities arising from lost revenue, due to reduced capacity,” Untal said during the virtual 12th International Innovation Summit.

As one of the sectors identified as essential industries, the IT-BPM was given substantial support from government partners who rendered special concessions to mobilize onsite skeleton workforce and enabled work-from-home operations.

The concessions the industry received translated into increased and better operability—from 50 percent in March to 73 percent in May. As restrictions started to ease in June, productive capacity gradually went up to 90 percent.  The industry is now operating at 95 percent capacity, mix of on-site and off-site.

“Our ability to render essential services to both domestic and international clients is indeed a welcome sign of the sector's recovery. Despite the less than ideal circumstances, and the different obstacles that we had to hurdle, the industry continues to demonstrate his resilience, tenacity and enduring role as a major economic driver,” Untal said

IT-BPM continued to drive real estate in the time of pandemic as its take-up volume reached 297,000 square meters which offset some 249,000 sqm of vacated spaces, according to a report by Leechiu Property Consultants.

The industry also opened job opportunities to thousands of Filipinos with about 30,000 new job openings across the industry sub-sectors.

Untal said that despite the overall market decline, the labor requirements of IT-BPM industries or companies in the Philippines remained stable.

He said the growth of the industry would be heavily influenced by the following: a higher focus on technology; accelerated adoption of automation and digital transformation; an uptick in demand from key geographies; investment in higher value services; customer experience beyond traditional contact centers as an example; cloud and cybersecurity; and a robust ecosystem comprising of telecoms and other infrastructures and enhanced regulations.

“Obviously, the need for a strong, very strong government support is needed, and an improved and predictable business landscape,” Untal said.

He said government support would help cushion the impact of the pandemic to the industry’s growth forecast.

“Most of the country leadership that we reach out to believe that the industry will not be growing at the earlier projected growth rates of 3.5 to 7.5 percent in revenue, due to the impact of the pandemic and the global contraction in demand,” he said.

He said the recalibrated figures would be released on the final day of the summit.