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BPO industry seen to grow 30% in 2009

[ Manila Bulletin Online ] January 26, 2009

Business process outsourcing (BPO) industry players are optimistic to achieve a robust 20 to 30 percent growth this 2009 on the back of non-voice outsourcing sector’s increasing share to total revenues despite the economic slowdown being experienced worldwide.

Oscar Sañez, the new PHILEXPORT trustee for the information technology (IT) services sector, in an interview said he considers this a strong growth even if it is not as strong as historical growth of around 40 to 45 percent.

"We estimate that the growth will be somewhere around 30 to 35 percent in 2008 against 2007. And we expect to continue to see that in 2009 of about 20 to 30 percent in 2009," he said. The industry’s actual 2008 revenue figure will be released on February 9.

Sañez said the call center sector will continue to be the main driver of growth contributing two-third to the industry’s revenues, while that of the non-voice sector has been growing.

Non-voice segment of the industry comprises of services like back office finance/financial accounting, back office human resource/HR payrolls support, logistics and architectural design services, among others.

"Voice (sector) is still strong, but the non-voice sector is growing faster," he stressed.

Sañez bared there are positive factors that continue to boost the growth of the BPO industry despite the global economic slump.

He said crisis-hit companies will need to outsource some of their functions so that they can be more competitive.

Sañez said the Philippines continues to be a very advantageous site for outsourcing because of its strong value proposition.

"We have cost advantage, we have qualified workers because of the number of college graduates we have every year, a big chunk of them is English-speaking and information technology (IT)-proficient. There are not many countries in the world that are able to offer that same kind of sustainable value model like the Philippines," he noted.

Sañez, also the chief executive officer of the Business Processing Association of the Philippines (BPAP), said an added boost to the sector is the strong telecommunication infrastructures, with the private sector leading investments in broadband connectivity and optic fibers all around the country and international connectivity.

"The cost is very competitive so we continue to see growth," he said.

Likewise, the BPO market is still in an early stage of growth unlike other industries where these are already saturated and the threat of shrinkage is very strong, he added, stressing that "the market for outsourcing is not going to shrink."

With these, Sañez said industry players are keeping their $ 12-billion revenue target for next year.

"We are on track on our revenue target of $ 12 billion by 2010, (it is) still our target. On our employment target, we may not be able to hit the 900,000 workers because of the value of services we do now is higher," he noted.

Apart from aggressive training and recruiting development programs, they are gearing their efforts towards creating industry standards and accreditation.

"We have to comply with some global standards and the industry is leading a lot of that effort so that we can improve our competitiveness and also move towards higher value services in the future," Sañez said. (EHL)


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