BPOs lower 2022 targets amid uncertain times
MANILA, Philippines — The IT-BPM industry used to think it could hit $39 billion worth of revenues in 2022, but unexpected trends such as the uncertainty over its tax breaks have now made its target a pipe dream.
The industry now expects to hit only $29 billion. At best, this can reach $32 billion, although an industry leader called this an “aspiration,” instead of a realistic target.
The industry’s revised road map was announced on Tuesday at this year’s International Innovation Summit, wherein one of the country’s top dollar earners showed its resolve to keep moving forward, albeit at a slower pace.
Considered the biggest employer in the private sector, the industry is also expected to make fewer jobs in the remaining years of the Duterte administration.
From an original 2022 head count target of 1.8 million workers, the figure has dropped to at least of 1.42 million, or 380,000 jobs less than expected. At best, the target could reach 1.57 million workers.
Such was the difference a few years made, whereas it was only back in 2016 when the Information Technology and Business Process Association of the Philippines (IBPAP) announced its 2022 targets.
H. Karthik, who leads Everest Group’s global sourcing practice, said the industry’s growth would depend mainly on the outcome of the discussions around the administration’s tax reform package known lately as Citira.
The Corporate Income Tax and Incentive Rationalization Act (Citira) would lower the corporate income tax, while also rationalizing tax incentives, a divisive discussion that fueled fears of higher costs of doing business.
Passed in the House of Representatives, the bill is still pending at the Senate, but discussions about it have already left a dent on the industry. Moreover, Duterte had also banned new economic zones in Metro Manila, dealing another blow since many industry players preferred to first set up shop in the capital.
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