BPO sector seen growing despite poor infrastructure

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DESPITE poor infrastructure and internet connectivity, the business process outsourcing (BPO) industry is expected to continue to flourish mainly due to abundant English speaking labor supply and BPO-friendly government regulations, industry leaders and investment analysts have said.

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“The slow connectivity speeds, especially when compared with other countries, can influence investors seeking to do business in the region,” said Asean Briefing, the business news website of global corporate advisor Dezan Shira & Associates.

The website, however, quoted the IT and Business Processing Association of the Philippines as saying that it projects the industry to still create 372,000 new jobs between 2014 and 2016.

Industry leaders have projected the BPO sector to employ some 1.3 million Filipinos and generate up to $27 million in annual revenues by 2016.

The Asean Briefing pointed out that the large supply of college-educated, English-speaking labor force, the internet-savvy millenials, and more investment-friendly government regulations, and bigger capital incentives have given impetus to the bustling BPO industry.

This made the website consider the Philippines as the world’s emerging BPO capital.

Asean Briefing recalled that the BPO industry, started in the Philippines by Accenture in 1992, did not really grow fast until restrictions were eased in 1995 with the Special Economic Zone Act.

“The past ten years, in particular, saw rapid growth, with industry revenue growing ten-fold from $1.55 billion in 2004 to $15.5 billion in 2013,” it said. “Employees working in this industry rose by a similar percentage, rising from 101,000 to 900,000 over the same time period.”

It noted that the country’s 95-percent literacy rate and the Philippines’ being the world’s third largest English-speaking country and one of the most Western-oriented in Asia have all benefited the BPO industry.

“The good news is also that growth is not just confined to Manila, but has spread to other cities around the country,” said the website. “Ceb u already ranks eight in Tholon’s Top 100 Outsourcing Destinations and is joined by six other Filipino cities in the Top 100.”

Asean Briefing cited data from Tholons Inc., a leading US-based services globalization and investment advisory firm, which ranked the top 100 Outsourcing Destinations around the world.

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