Metro Manila on top of BPO world, expert says

BPO CENTER Metro Manila now has more persons employed in the BPO export industry than any other city in the world. AFP

Metro Manila has become the center of the business process outsourcing (BPO) world, an industry expert said at a conference on services exports.

But Raja M. Mitra, who has done studies for the World Bank, said that the growth of the young ICT industry (which includes BPO) needs to be supported with developments in related sectors.

This is to maximize the sector’s positive impact on the Philippine economy and spread income opportunities more or less evenly all over the country.

According to studies, Metro Manila now has more persons employed in the BPO export industry than any other city in the world.

Second only to India as a leading BPO industry center in the past few years, the Philippines has outperformed most countries in terms of BPO growth.

As of 2010, the BPO export sector directly employed 500,000 people in the Philippines compared with 800,000 in India.

If measured in terms of revenue or employment on a per-capita basis, Mitra said, the Philippines has a larger BPO industry than India, he said in his recent presentation titled “The IT-BPO sector and inclusive growth in the Philippines” at the Asian Institute of Management.

Both the Philippines and India have experienced high BPO growth, but as of 2010, the Philippines has overtaken India in the call-center industry in terms of revenue and employees.

However, the Philippines lags behind India and China in IT and software services. Looking forward, the total market for the Philippine IT-BPO sector could reach $50 billion by 2020.

According to Mitra, the local market for Philippine IT-BPO is $5 billion and the potential export is $45 billion by 2020.

Direct employment in the IT-BPO export industry (excluding hardware) reached over 500,000 in 2010.

However, ICT sector’s overall contribution to the economy is substantially larger if it includes not only IT-BPO services but also telecommunications services, media and the electronic hardware sector.

Mitra said overall ICT sector can be partitioned into five broad subsectors: telecommunications, which generates big revenues and has a major impact; broadcasting and media, whose transformations are supported by telecommunications; electronics manufacturing, which is export-driven; and IT software and related services, where BPO voice and nonvoice offerings dominate compared with KPO, or knowledge process outsourcing.

“We will see major changes in these subsectors. We are just seeing the beginning of a fundamental development that will affect other sectors,” Mitra said.

With nurturing, Mitra said, the BPO services sector could take advantage of opportunities and further increase its share of GDP and employment.