BPO ripe for skills upgrade as growth nears 'plateau,' gov't says

Jessica Fenol, ABS-CBN News

Posted at Jan 23 2018 11:35 AM

MANILA - Growth in the business process outsourcing sector could be nearing a "plateau," underscoring the need for one of the main drivers of the economy to shift to artificial intelligence and other high-value services, officials said Tuesday.

The miscellaneous services component of the economy, which includes BPO, grew 9.2 percent in 2017 from the previous year, compared to 19.8 percent from 2015 to 2016, data showed.

The BPO industry alone grew 12.3 percent in 2017 from 2016. There was no immediate comparative data from 2015.

"It’s a sign of maturation of the sector, of the industry... It should be a signal that the BPO sector should move into higher-level skills and higher value-added services," Socioeconomic Planning Sec. Ernesto Pernia told reporters.

From call centers, the BPO sector must move to big data analytics, app development and related fields, said Socioeconomic Planning Usec. Rosemarie Edillon.

"We are seeing na nagpa-plateau na siya (We are seeing that its reaching a plateau). The way for it to grow much, much more, for it to diversify, is to grow to value added services,” Edillon said.

The Philippines' business process outsourcing (BPO) industry is an economic lifeline for the Southeast Asian nation of 100 million people. It employs about 1.15 million people and, along with remittances from overseas workers, remains one of the top 2 earners of foreign exchange.

AI, which combs through large troves of raw data to predict outcomes and recognize patterns, is expected to replace 40,000 to 50,000 "low-skilled" or process-driven BPO jobs in the next 5 years, according to the the IT & Business Process Association of the Philippines (IBPAP).

Contact centers make up four-fifths of the Philippines' total BPO industry, which accounts for 12.6 percent of the global market for BPO, according to IBPAP.

The Philippines' share of the global outsourcing pie, estimated to reach about $250 billion by 2022, is forecast by the industry to reach 15 percent by that year.

-- with a report from Reuters