Revenues by the booming business process management (BPM) sector may surpass remittances from overseas Filipino workers (OFW) by 2016, a BPM industry official said Tuesday.
Jon Kaplan, president and chief executive officer of TDS Global Solutions, said he expects the information technology-business processing management (IT-BPM) industry to continue making significant contributions to the country’s gross domestic product, due largely to robust growth in the health care sector.
The IT-BPM industry “will overtake remittances in the services sector by the end of 2016” and this may be reflected by TDS Global’s fast growth clip, particularly in health care services.
TDS Global chairman Jack Freker said the proposed health care program by President Barack Obama in the United States has raised various issues and complaints. This development can eventually generate about 75,000 outsourced health care-related jobs in the Philippines.
We are starting to parallel very closely the $25 billion OFW remittances target, Kaplan said. The IT-BPM will support the livelihood of many people and this can go a long way in helping many job seekers re-consider the option of working overseas, he added.
“In the United States, [the health care industry]is only growing by 3 percent to 4 percent [yearly]. But in the Philippines, it is growing by 20 percent,” Freker said.
The IT-BPM and remittances sectors were major contributors to the services segment, which contributed the largest share of 3.6 percentage points to the country’s GDP last year. The industrial sector accounted for 2.8 percentage points and the agricultural sector 0.1 percentage point.
The IT-BPM and OFW remittance sectors have the same target of generating about $25 billion by 2016, although the former is growing faster than the latter, Jose Mari Mercado, president and chief executive of IT and Business Processing Association of the Philippines, told reporters on Friday.
Remittances by OFWs by 2016 are forecast at $25 billion, about the same level as the revenue estimates during the same period for the IT-BPM sector, he said. Mercado noted, though, that the annual growth rate of OFW remittances is much lower than revenue generation growth in the IT-BPM industry.
In 2013, remittances by overseas Filipinos stood at an all-time high of $22.8 billion, a 6.4 percent increase from the 2013 level of $21.4 billion, according to Bangko Sentral ng Pilipinas data.
Revenue from the IT-BPM industry grew at a faster 17 percent clip to $15.5 billion last year, putting it on track to hit the $25 billion target by 2016, based on the IT-BPM Roadmap 2016.
Mercado said many new potential investors are coming in, and existing IT-BPM companies are exceeding growth expectations, indicating a bright future for the sector.
“Of course there is that fear, if we are able to cope [with the fast industry growth]. [But] the timing is great because we have half a million people coming out of the academics, so we’ll be ready for them. We have jobs waiting and yes…there are big names coming in,” the IBPAP chief said, referring to the 400,000 to 500,000 new graduates this year entering the workforce.
Freker said the IT-BPM industry will give the Philippines some leverage in the global IT-BPM arena even as this booming sector will provide more skilled job opportunities, greater sources of income and improved career paths.
In response to the fast growing IT-BPM in the country, TDS Global set up an online jobseekers’ portal — BPO Career Hub – that provides an online archive of job opportunities, with the likes of JobStreet and JobsDB, but solely devoted to the IT-BPM sector.