BSP expects strong inflows from BPO, tourism
MANILA, Philippines - The robust growth of the business process outsourcing and the tourism industries are expected to be sustained this year, the central bank said, noting both will continue to support the country’s foreign exchange reserves.
“For the BPOs, we’re expecting a 15- percent growth (in export revenues) for 2013 and also a 15-percent growth for 2014,” Rosabel Guerrero, director at the Bangko Sentral ng Pilipinas’ Departmanet of Economic Statistics, said in a briefing.
Guerrero noted that the growth rate will be from an $11.6-billion revenue figure recorded in 2012 by the BPO industry.
Zeno Abenoja, director for BSP’s Department of Economic Research, noted that the sustained growth of the industry will be on the back of government’s continued support for the industry and sustained demand for firms abroad.
“The projections were done in consultations with the industry... The projections took into account continued strong government support to the industry in terms of favorable tax treatment for capital equipment, and tax incentives (among others),” Abenoja said.
At the same time, he stressed “continued demand from foreign companies for outsourcing services here to reduce their costs... will be a major driver.”
The country’s BPO industry is still largely made up of voice services, but Abenoja said the increasing market share of other services will also drive the growth this year.
“Other segments are growing such as transcription, animation and other back-office transactions,” Abenoja said.
The Philippines’ BPO industry is a major driver of the economy. The Business Processing Association of the Philippines, for one, expects the industry to gain as much as $25 billion by 2016.
Meanwhile, Guerrero said that apart from the BPO industry, the tourism sector is expected to also sustain its strong growth this year.
“Travel receipts amounted to $4 billion in 2012. We’re expecting a 20 percent growth for both 2013 and 2014,” Guerrero said.
Abenoja said that the tourism sector will continue growing on the back of aggressive promotion done by the government.
“This is consistent with what is being projected by the Department of Tourism... As we understand it, they will be investing in promotions for Philippine tourism sites and that will result in maintaining a robust growth in our tourism receipt,” Abenoja explained.
Moreover, he pointed out that improving conditions in other countries abroad will also encourage more travels which can also result in more tourists visiting the Philippines.
The sustained growth in the BPO and tourism sectors will support the Philippines’ balance of payments position, which indicates a country’s transactions with the rest of the world.
The BOP position includes exports, imports, foreign direct and portfolio investments, and remittances, among others. BPO and tourism receipts are recorded under services, placed under the BOP’s current accounts.
The central bank expects a BOP surplus of $3 billion this year. This will help the country boost its gross international reserves to as much as $88 billion in 2014.