RP’s BPO sector projected to grow 25% this year

MANILA, Philippines – The Philippine business process outsourcing (BPO) sector is expected to post a 25-percent growth in revenues this year to around $9.1 billion from an estimated 2009 topline of $7.3 billion, but government has expressed concern the country’s foremost sunrise sector may be facing a huge risk.

The Commission on Information and Communications Technology (CICT) said yesterday that for an industry as important as the BPO sector, the executive branch still does not have a department dedicated to ensuring its continued growth.

CICT chairman Ray Anthony Chua told The STAR while a House bill proposing the creation of a Department of Information and Communications Technology has already been passed as early as 2008, its counterpart bill in the Senate is still undergoing second reading, with only two days left in the legislative calendar.

President Arroyo has certified the bill creating the ICT department as an urgent measure, but with the Senate concerned with so many matters, the bill appears to have been placed in the back burner.

Chua pointed out that most ASEAN countries already have a department or ministry dedicated to ICT, such as Singapore, Malaysia, Thailand, Vietnam, Indonesia and Brunei. Those that still do not have a dedicated department are the Philippines, Cambodia, Laos and Myanmar.

India, considered the Philippines’ strongest rival in the world offshoring and outsourcing (O&O) sector that includes BPOs and call centers, has long had a department focused on the development of the ICT industry.

The Philippine BPO sector, according to Chua, expects to grow slower at 20 percent in 2009 to $7.3 billion with 446,000 employees as a result of the recession that affected markets like the United States. “But with our markets recovering, we expect to go back to our pre-recession growth rate of 25 percent,” he said.

Chua pointed out most of the big players in the local BPO sector, dominated by international BPO companies, are expecting better prospects this year. “Thus, the outlook for this year is very positive,” he added.

Of the $7.3 billion projected revenues in 2009, around two-thirds comes from the voice sector (call centers) while the balance is from the non-voice sector.

Chua said India and the Philippines are about the same in terms of voice revenues, but India is bigger in the non-voice sector. “We are hoping that the Philippines will move to much higher segments, such as software development, animation, and engineering design,” he emphasized.

The CICT was created by virtue of an executive order issued by President Arroyo and was intended as an interim office until such time an ICT Department is created.

But even with the ICT Department bill still pending in Congress, the communications portfolio has already been removed from the Department of Transportation and Communications (DOTC) and transferred to CICT. This means that the various government agencies in charge of communications, such as the National Telecommunications Commission (NTC), Telecommunications Office (Telof), and the National Computer Center (NCC), are now under the CICT, which sets the policies for the local ICT sector.

Chua stressed that unless an ICT Department is created, there will be no continuity in terms of policies for the ICT sector. “Just look at the NTC.

It was placed under the CICT, then returned to the DOTC, then transferred back to us early last year. We can’t work on our policies, such as those on broadband, digital television, and others. That’s the worry. President Arroyo has been very supportive of the CICT, but how about the next president. Because CICT was created by virtue of an EO, it can easily be abolished by another EO,” he explained.

He pointed out that for an industry so important as the BPO sector, which has been the main driver of the economy, there is still no dedicated executive department tasked with ensuring its continued growth. “It is about time that we give the BPO sector and the ICT industry for that matter, the importance they deserve,” he stressed.

The ICT sector would include the telecommunications and broadband industries, also considered as sunrise businesses.

Chua likewise explained that the absence of an ICT Department is hampering the computerization of government offices and processes, mainly because at present, computerization programs are scattered among the various offices. “They are not interconnected and there is no interoperability,” he said. –Mary Ann Ll. Reyes (The Philippine Star)