IT-BPM growth forecasts cut

The information technology-business process management industry, the country’s largest job generator, will gun for the best-case albeit slower growth scenario in revenue and head count from this year until 2022 amid global and local headwinds.

The slower growth projections of consultancy firm Everest under the industry’s recalibrated roadmap sets a worst-case scenario of an annual growth from 2019 to 2022 of 3.5 percent in revenues and 3 percent in head count and a best-case scenario of 7.5 percent and 7 percent in revenues and in head count. respectively.

This is much slower than the original projection of 9.2 percent annual growth in the 2017-2022 roadmap.

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Revenues are seen hitting a range of $29 billion to $32 billion by 2022 under the new roadmap, lower than the $38.9 billion projected originally.

Everest said job generation will be lesser, by an average of 90,000 to 95,000 per year from 100,000 as earlier projected, ending 2022 with 1.4 million to 1.57 million in headcount that year from 1.8 million in the original roadmap.

Benedict Hernandez, president of the Contact Center Association of the Philippines said Everest’s forecasts of faster growth in revenues versus head count demonstrates that the Philippines is moving p the value chain, a first-time validation by a third party.

” We need to move further into that direction,” Hernandez said.

“… The 7 to 7.5 percent (growth in employment and in revenues), that’s an aspiration, meaning let’s go for it, Let’s try to actually grow in that range. It’s a notch lower than we had in the original road map. A lot has happened since the original road map three years ago… policy changes, impact of technology. We subscribed to that view that we need to actually contemplate that impact. At the same time, we still have a shot at staying close to the 8 to 9 percent of the original roadmap,” he added.

H. Karthik, partner at Everest Group said the contact center and business process outsourcing like banking and finance and accounting and IT services will take the biggest hit while healthcare, animation and game development are expected to grow faster versus the entire industry.

Karthik said the Philippines’ continued growth hinges on global macroeconomy which has seen a slowdown as well as on proposed rationalization of incentives under a tax reform plan.

In line with the global outsourcing industry which has experienced sluggish growth due to reduced spending and the advent of digital and automation, Karthik said the Philippines is also witnessing slow growth.

But the industry has seen some revival starting last year.

Rey Untal, president of the Information Technology Business Processing Association of the Philippines said in 2017, revenues stood at $23.4 billion with a much slower growth of 2 percent; rising to $24.7 billion in 2018 or a 5 percent growth.

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