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By Justine Irish D. Tabile, <\/b>Reporter<\/i><\/p>\n
THE EXPANSION of the Philip<\/span>pine information technology and business process management <\/span>(IT-BPM) sector this year is anticipated to surpass the worldwide average regarding job creation and export revenue, an industry association stated.<\/p>\n \u201cWe have increased to 1.82 million in 2024 and are expected to reach 1.9 million by the close of 2025. Thus, we are nearing the 2-million threshold. What we will also achieve in 2025 is $40 billion in export income,\u201d IT & Business Process Association of the Philippines (IBPAP) President and Chief Executive Off<\/span>icer Jonathan R. Madrid expressed during a press briefing late on Monday.<\/p>\n \u201cThis represents a 5% increase compared to last year and a 4% rise in jobs over the previous year. Growth is always positive news, but considering that the global growth of our sector only rose by 3%, it indicates that once more the Philippines is at the forefront of industry expansion,\u201d he added.<\/span><\/p>\n These figures, he mentioned, are the revised targets for the year but fall short of the industry\u2019s ambitious goals outlined in the IT-BPM Industry Roadmap 2028.<\/p>\n \u201cWe are surpassing our baseline objectives, but we are slightly below our more aggressive targets,\u201d Mr. Madrid remarked.<\/p>\n When establishing the targets, he indicated that the sector takes into account the evolution of work types, the availability of skilled labor, and the ease of conducting business.<\/p>\n \u201cThis sector is no longer merely focused on cost efficiency. It revolves around the availability of talent, the simplicity of doing business, and the distribution of work. Because investors can’t concentrate all their operations in one location, diversification is necessary,\u201d he stated.<\/p>\n \u201cSo, being a significant leader alongside India, the matter of overconcentration has emerged as a topic, and we truly need to address these additional challenges to maintain our market position,\u201d he added.<\/p>\n According to IBPAP representatives, the sector continues to encounter obstacles at the local government unit (LGU) level despite the enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and its guidelines.<\/p>\n \u201cWith the implementation of CREATE MORE, we are hopeful that issues with LGUs and the Bureau of Internal Revenue will be resolved,\u201d stated IBPAP Chief Operating Off<\/span>icer Celeste B. Ilagan.<\/p>\n \u201cHowever, we observe that even after the issuance of the guidelines, some members still face challenges with specific LGUs. It truly revolves around how these LGUs interpret the stipulations of CREATE MORE concerning the incentives to which enterprises are entitled,\u201d she added.<\/p>\n To tackle this, she mentioned that the Department of Trade and Industry, the Department of Finance, and the Department of the Interior and Local Government are planning to release a joint memorandum circular (JMC) that will clarify how LGUs should interpret CREATE MORE.<\/p>\n \u201cWe have reviewed a draft of that JMC which has undergone several consultations. We understand that there\u2019s one more consultation in the province before they can pass that JMC,\u201d she said.<\/p>\n \u201cThat will outline what LGUs should adhere to regarding fees and charges, requirements for business permits, and all of that,\u201d she added.<\/p>\n Ms. Ilagan noted that these challenges are currently affecting existing enterprises, as new investors are still exploring which cities would be ideal for setting up operations.<\/p>\n Meanwhile, Mr. Madrid highlighted that there are prospects for growth in global capability centers (GCC).<\/p>\n \u201cI\u2019m pleased to report that our off<\/span>ice receives visits weekly from locators and investors aiming to expand their presence in the Philippines and are contemplating establishing operations here,\u201d he stated.<\/p>\n \u201cMuch of the growth and interest stems from GCC; these include companies like JPMorgan and HSBC. I believe this sector warrants our attention because it typically offers higher value-added employment opportunities,\u201d he added.<\/p>\n For instance, Mr. Madrid highlighted that India has experienced an increase of 100 GCCs annually, with its entire GCC sector already as extensive as the entire Philippine IT-BPM sector.<\/p>\n \u201cI think we should genuinely emphasize and concentrate on the development of GCCs. Currently, we only have 150 GCCs in the country. The potential is far greater,\u201d he remarked.<\/p>\n \u201cI believe there is an opportunity to enhance our footprint in the GCCs. This is significant because the revenue per employee in GCC is considerably higher than in the broader sector,\u201d he added.<\/p>\n As of now, the industry employs 250,000 people in GCCs, primarily in banking, financial services, insurance, and healthcare. The GCCs contributed $8 billion, or 20% of last year\u2019s total industry revenues.<\/p>\n Additionally, Mr. Madrid pointed out that there has been an increase in employment in rural areas, mainly because provincial cities do not encounter the same public commuting difficulties as workers in Metro Manila.<\/p>\n \u201cThe rural areas are a promising aspect for the industry. Prior to COVID, only 25% of our workforce was outside Metro Manila. Today, that figure stands at 32% of a larger base,\u201d he said.<\/p>\n \u201cAnd based on our roadmap forecasts, we expect that to increase to 40% by 2028. Congestion in Metro Manila is a problem, so the rural areas help alleviate that,\u201d he added.<\/p>\n However, he noted that revenues remain higher in Metro Manila, as most GCCs are situated in Metro Manila and Cebu.<\/p>\n