Philippine call centres and other outsourcing companies beat revenue and hiring targets last year and expect more growth in 2023, as global businesses continue to seek ways to cut costs.
In the economically vital business process outsourcing (BPO) industry, which provides support services to companies from Amazon to Zoom, revenues increased 10.3 per cent to $32.5bn and staff count rose 8.4 per cent to 1.57mn, according to the IT and Business Process Association of the Philippines (IBPAP).
The financial services, healthcare, retail, technology and telecommunications industries had driven growth, it added. The trade association had forecast 8 to 10 per cent revenue expansion and headcount growth of 7 to 8 per cent.
This year, IBPAP said, the industry’s workforce could reach 1.7mn and revenue could hit $35.9bn, growth of 8.3 per cent and 10.5 per cent, respectively.
The group said its industry survey found that 83 per cent of outsourcing companies expected to post growth in 2023 “despite a potential global recession”, while 17 per cent were “neutral with their forecasts”.
The survey also showed that organisations would continue to outsource and use global business services to cut costs, IBPAP said.
The better than expected performance in 2022 is the latest good news for the sector. In September, the government allowed BPO companies with work-from-home arrangements to retain tax incentives. Many outsourcing companies previously operated under an investment regime that required staff to work on-site to enjoy tax perks, and the hybrid work set-up was initially a temporary measure taken in response to the coronavirus pandemic.
Amid intense lobbying for hybrid work to be made permanent, IBPAP has pledged to generate 2.5mn jobs and $59bn in annual revenues by 2028, the end of Philippine president Ferdinand Marcos Jr’s six-year term.
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The lofty targets come as the country’s call centre industry faces a number of challenges, such as automation, difficulty in hiring qualified workers and rising competition from other outsourcing destinations such as India, Poland and South America.
“We still have a long way to go, but [the] Philippine [industry’s] stellar performance in 2022 brings us closer to generating 1.1mn new jobs for Filipinos,” said IBPAP president and chief executive Jack Madrid.
“It’s also a testament to the collective efforts that the private sector, government and academe have exerted to retain the industry as an indispensable pillar of the economy,” he said.
A version of this article was first published by Nikkei Asia. ©2023 Nikkei Inc. All rights reserved.