Despite uncertainties from the recent U.S. presidential election, the Philippine Information Technology and Business Process Management (IT-BPM) industry remains confident in its growth outlook. Industry leaders express “no immediate concerns” over U.S. investments, underscoring the country’s established position as a leading outsourcing destination.
According to Celeste Ilagan, chief operating officer of the IT-Business Process Association of the Philippines (IBPAP), American investors have consistently shown interest in expanding their operations in the Philippines regardless of U.S. political shifts.
“We are confident in the continued growth of the IT-BPM industry and are committed to meeting ambitious targets for employment and service export revenue,” Ilagan said during a press briefing for the new Center for Strategic and International Studies (CSIS) report.
CSIS Senior Fellow and Southeast Asia Program Director Gregory Poling echoed this sentiment, noting that U.S. private companies remain committed to investing in Southeast Asia, including the Philippines, irrespective of electoral outcomes.
He emphasized that the decentralized nature of the U.S. economic system enables private companies to make independent investment decisions. “The President can’t actually do anything about what private U.S. companies are doing,” Poling explained, highlighting the stability this offers the sector.
Philippines remains top U.S. investment destination
The Philippines remains a preferred destination for U.S. investment, especially in the IT-BPM sector. The CSIS report, U.S. Investment in the Philippines: More Than Meets the Eye, attributes this to the country’s tech-savvy young workforce and high English proficiency.
Between 2003 and 2021, U.S. firms invested $22.4 billion in the Philippines, with $7.8 billion (35%) directed to IT-BPM. Additionally, from 2014 to 2023, the Philippines received $5.2 billion in U.S. foreign direct investment in professional services.
Since 2010, the country has led globally in voice-based IT-BPM services, employing 1.57 million people as of 2023, with projections to reach 2.5 million by 2028. This year, the industry could generate between $38 billion and $40 billion in revenue and grow employment to 1.84 million.
The IT-BPM sector also plays a crucial role in the Philippine Economic Zone Authority (PEZA), attracting nearly $260 million in investment in the first quarter alone. With flexible work options, the sector is a top employer for many of the country’s 850,000 annual graduates.
Government’s role in boosting investments
While the CSIS report acknowledges institutional challenges, such as foreign ownership restrictions, it also commends the Philippine government’s commitment to economic reforms and infrastructure improvements.
PEZA’s tax incentives, simplified processes for foreign investors, and new initiatives to enhance broadband access and digital skills in rural areas increase the country’s appeal to U.S. companies.
The report recommends further strengthening economic ties by promoting exchanges, creating a comprehensive database on U.S. investments, and diversifying investments to emerging regions such as Cebu, Davao, and Iloilo. These steps can solidify the Philippines as a top outsourcing destination, attracting more U.S. investments and supporting economic growth.
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Suroy Suroy, H. J. (2024, November 5). Philippine BPOs confident amid U.S. election uncertainty. Outsource Accelerator. Retrieved from https://news.outsourceaccelerator.com/philippine-bpo-confident-amid-us-election/
