While global economies and other local industries grappled with uncertainty, the Philippines’ golden goose continued to lay golden eggs that were bigger than ever. The Business Process Outsourcing (BPO) industry did not just maintain its growth– it contributed a substantial 8.5% to the country’s GDP, proving itself as one of the most reliable drivers of national progress.
According to industry leaders, however, what we’re seeing now is just a fraction of its true potential.
Double the global average
The numbers: $38 billion in export revenue and 1.82 million Filipinos employed nationwide, with the sector outpacing the global outsourcing average of 3.5% by achieving 7% growth in 2024. But these figures tell only part of the story. Jack Madrid, president and CEO of the IT and Business Process Association of the Philippines (IBPAP), the country’s largest organization of IT-BPM firms, says, “This industry is one of the few legitimate pathways for growing the middle class in this country.”
“The Philippine BPO industry is the largest voice BPO destination globally,” adds Ravi Iyengar, former Foundever Chief Operating Officer for APAC, highlighting a key strength while also pointing to new horizons. “There is a need to grow capabilities in non-voice, AI, and Analytics which is the trend of the future. I would certainly like to accelerate this trajectory.”
Transforming communities nationwide
What sets the BPO industry apart is its unique ability to create prosperity beyond Metro Manila. From having just 25% of operations outside the capital before the pandemic to 32% today, with projections reaching 40% by 2028, the sector’s geographic diversification has greatly contributed to national transformation.
“During COVID-19, we added 255,000 new jobs, even as the government initially pushed for a return to office work,” Madrid explains. “Remote and hybrid models not only allowed us to grow but also decongested Manila, spreading economic benefits to regions like Cebu, Davao, and Bohol.” However, he notes, “It could have been 350,000 jobs. We didn’t maximize it because of our talent gap.”
This gap between achievement and potential points to one of the industry’s two most pressing challenges.
The skills gap crisis
Despite having Asia’s youngest population, the industry faces a critical skills mismatch. ““The skills needed today go beyond English proficiency; they include critical thinking, problem-solving, analytics, and domain-specific expertise. If we increase the employable supply of talent, we could unlock hundreds of thousands more jobs.”
Iyengar echoed this, adding that the complexity of tasks now requires higher English-speaking capabilities, particularly in Tier 2 and 3 cities. “The calls now being serviced in the Philippines are more complex and require advanced skills,” he noted.
BPO work today encompasses all industries and business functions, requiring deep domain expertise alongside basic technical skills. “People think that just because you can speak English, you can make it in this industry. It’s a 30-year-old misconception. We are not an industry of telephone operators. That’s not true, Madrid says. “The skills needed today go beyond English proficiency; they include critical thinking, problem-solving, analytics, and domain-specific expertise. If we increase the employable supply of talent, we could unlock thousands more jobs.”
Iyengar echoes this, pointing out that with the increased introduction of automation and AI, simpler tasks are being handed over to AI-assisted self-service solutions.
He also adds that the complexity of tasks now requires higher English-speaking capabilities, particularly in Tier 2 and 3 cities. “The calls now being serviced in the Philippines require a higher English speaking capability and complex problem-solving skills, which are difficult to find outside the big cities.”
Private sector investments in onboarding and training—often lasting four to eight weeks—help bridge this gap, but systemic reforms in education remain crucial.”
To address these gaps, IBPAP has launched the Philippine Skills Framework for Contact Center and Business Process Management, an ambitious initiative targeting to upskill 1 million workers by 2028. “IBPAP is leading the charge by advocating for government action to prioritize funding for AI-focused upskilling programs and the integration of digital and AI-related skills into the national education curriculum,” Madrid explains.
Recent partnerships with the Department of Education (DepEd) and TESDA have strengthened the foundation for scalable, competency-based training initiatives in critical fields such as:
- Data analytics
- Machine learning
- Cybersecurity
- AI-enabled customer service
Additionally, IBPAP is equipping industry leaders with tools to adopt AI responsibly and implement ethical workforce transition strategies. “Early adoption enhances productivity and drives higher-value services,” Madrid notes, “positioning the IT-BPM industry as a model for navigating AI disruption.”
Regulatory landscape
The second challenge facing the industry, and perhaps its most pressing concern, particularly when it comes to investments and investors, is the ease of doing business.
The post-pandemic regulatory environment has become frustratingly complicated, with different interpretations and implementation of rules in different localities. “As an industry, we are fundamentally very compliant,” says Madrid. “We will obey the rules, but don’t keep changing them. Apply them consistently.
This is particularly challenging compared to the pre-pandemic era. According to Ravi Iyengar, “Pre-pandemic, PEZA provided a seamless, single-window service. Post-pandemic, the process has become more fragmented, adding unnecessary bureaucracy.”
To address these regulatory challenges, IBPAP is actively promoting policies that support:
- Streamlined hybrid work models
- Infrastructure development across regions
- Government incentives for technology investments
- Consistent implementation of regulations across localities
The organization also continues to engage with various government agencies to advocate for a more unified regulatory approach that would maintain the Philippines’ competitive advantage against other BPO destinations. This includes working towards simplified compliance procedures and standardized interpretations of rules across different regions.
A model for the future
The BPO industry has emerged as more than just a sector—it has become a model for the future of work. “Just as we were the example of why remote work is important, we’ve become the example of how businesses across all sectors will evolve,” Madrid notes. The industry’s experience with digital transformation, infrastructure, hybrid work models, and AI integration provides a blueprint for how traditional businesses can adapt to changing times.
The attention it deserves
With the right support in education and consistent regulatory policies, this $38 billion success story could transform into something even more remarkable. As Madrid puts it simply but powerfully: “We are one of the few things that are actually working. We are the golden goose. Take care of it.”
The potential is there—the question now is whether 2025 will see the necessary changes to fully unlock it, not just for the industry, but for the entire nation.
