Inclusion of IT-BPOs in 2014 IPP backed

DTSI Group has supported the continued inclusion of the Information Technology and Business Process Outsourcing (IT-BPO) industry in the 2014 Investment Priorities Plan (IPP) of the Aquino administration, saying the move would result in the sustained provision of government incentives.

DTSI president and CEO Miguel Antonio C. Garcia, said the IT-BPO industry deserved to continue receiving incentives from the government due to its consistent, significant contribution to the Philippine economy, generating both revenue and employment opportunities.

“There is no doubt that the industry has put the government’s fiscal and non-fiscal incentives to good use, which include income tax holidays, option to pay 5-percent tax on gross income for companies operating from special economic zones or technoparks accredited by the Philippine Economic Zone Authority (Peza), duty-free importation of capital equipment, and hiring of foreign nationals. The country continues to benefit from the industry’s many initiatives.”

Garcia added that the government was expected to receive up to five times its return on incentives from the IT-BPO industry. This was based on the industrial impact assessment from 2005 to the present featured in the Information Technology and Business Process Association of the Philippines (IBPAP)’s roadmap for 2016.

“During that period, the government provided about $1.1 billion to $1.4 billion in incentives to both BPOs and global in-house contact centers. In return, the industry contributed around $4.4 billion to $5.4 billion in revenues to the national government by way of corporate, personal, and other taxes,” he said.

A joint effort by the IBPAP and the Everest Group, the IT-BPO Roadmap for 2016 has been submitted to Trade and Industry Undersecretary Adrian S. Cristobal, also managing director of the Board of Investments (BOI).  The roadmap highlights how the IT-BPO industry created 900,000 new jobs in 2013, a figure that is expected to hit 1 million by the end of 2014. The BOI has been consulting with IBPAP and other stakeholders on the inclusion of the IT-BPO industry in its new incentives scheme.

Along with generating employment, the Philippine outsourcing industry contributed $13.3 billion to the national economy by the end of 2013, an increase of 15 percent compared to its contribution at the end of 2012. Garcia, however, noted that the continued grant of incentives to the IT-BPO industry was a critical factor for achieving the IBPAP’s 2016 target of generating $25 billion in annual revenues and 1.3 million direct-hire jobs.