2012 - 2016 Philippine Information Technology and Business Process Management Roadmap

Executive Summary

The information technology and business process management (IT-BPM)

and global in-house center (GIC) industry in the Philippines has grown at

an annual rate of 30 percent over a decade, faster than the growth of the

global offshore services market. As it has grown, the industry has

diversified significantly in breadth, scale, and maturity of services. An

ambitious forecast embodied in an industry road map of revenues of

US$25 billion and 1.3 million direct employees by 2016 appears to be

within reach.

If these targets are reached, the Philippine IT-BPM and GIC industry will

have consolidated over 10 percent of the global IT-BPM market. This

share will be maintained at least until 2016, when global market is

expected to be between US$240 billion and US$250 billion (Everest

Global estimate as of 2012).

Sources: IBPAP, Everest Group analysis (2011)

The industry’s contribution to economic development is centered

in Metro Manila and in other highly urbanized areas throughout

the country, or Next Wave CitiesTM

Sources: Everest Group and Outsource2Philippines (2012)

The Philippine IT-BPM industry has grown rapidly since 2006

Philippine IT-BPM and GIC Industry

Current State and Positioning

The IT-BPM and GIC industry in the Philippines

is characterized by the following:

• strong voice sector

• rapidly expanding non-voice sector

• complex services sectors

• large and talented English-speaking labor

pool

• strong affinity with Western culture and

business processes

Source: O2P-BPAP Periodic Survey (August 2012)

There is faster growth in non-voice,

complex services

Source: IBPAP (2012)

The Philippine IT-BPM workforce grew at an average

of 21 percent annually between 2007 and 2011

Sources: IBPAP data; IBPAP, Everest Group, and Outsource2Philippines analysis; World Bank and IMF projections

for GDP (2012)

The industry is projected to earn US$25 billion

in revenues and employ 1.3 million and 3.2 million

Filipinos directly and indirectly by 2016. At this

size, it could account for about 8 percent

of Philippine GDP

Sources: Commission on Higher Education; global industry data; Everest Group analysis (2011)

The Philippines has the third-largest annual graduate pool among

the world’s top IT-BPM service centers, after India and China, and

leading Poland, Mexico, Egypt, and Malaysia

Sources: IBPAP and Everest Group analysis (2010)

The Philippines is well-positioned among global IT-BPM services

providers in four key human resource indicators: scalability,

experienced talent pool, quality of English accent (and cultural affinity

with the US), and size of graduate pool

Higher scores imply greater competitiveness

*Established Metro areas are in bold

Sources: IBPAP; DOST-ICTO (2011)

The industry realizes that the next

wave of growth must necessarily

involve alternative locations, the best

of which are called the Next Wave

CitiesTM

Source: IBPAP (2012)

The Philippines is a

competitive destination for

the IT-BPM and GIC

industry because of its

scalable educated talent

pool, distinctive Filipino

workforce characteristics,

cost competitiveness,

excellent infrastructure,

government support and

public-private partnership,

and proven track record

Sources: Everest Group and Outsource2Philippines (2012)

The Philippines remains one of the most cost-competitive

locations in the world for voice

Sources: Industry data (2012), www.submarinecablemap.com

Telecom infrastructure is

available throughout the

archipelago

Source: O2P-BPAP

Periodic Survey

(August 2012)

Most IT-BPM and GIC executives view the Philippines as a less-risky

location for the provision of IT-BPM and GIC services

Global Market Role of the Philippines

Sources: Everest Group and Outsource2Philippines (2010)

As the market grows, the composition of the BPM market is expected

to evolve dramatically, with non-voice, complex services becoming the

fastest-developing segments

Source: Everest Group analysis (2011)

According to Everest,

the Philippines is a

mature location for

offshore IT-BPM

services

Sources: Everest Group and Outsource2Philippines (2011)

A wide range of IT-BPM and GIC services are currently

being delivered from the Philippines; diversification is

expected to intensify

Role of Information Technology

and Business Process Association

of the Philippines (IBPAP)

Achieving the US$25 billion goal requires IBPAP to drive

favorable outcomes across multiple areas, including:

• Addressing lack of human capital through public-

private partnerships

• Strengthening the Philippines’ attractiveness as an

investment destination

• Building and promoting the country brand

• Leading cross-sectoral efforts

• Introducing innovation

Areas where IBPAP

plays a role

Source: IBPAP (2011)

An integrated talent development approach with objectives that

progressively lead to expanding the talent pool and addressing the talent

supply gap are in place

Source: BPAP (2012)

Industry and

government are

working on a wide

range of talent

development

initiatives to ensure

the availability of

qualified applicants

Source: IBPAP (2011)

In 2013, ongoing

talent development

programs with be

enhanced and new

programs will

expand reach and

scale

Source: IBPAP (2012)

The industry’s marketing strategy will

involve multiple channels and activities

Sources: IBPAP and Everest Group (2012)

Ecosystem:

Government incentive

schemes have

resulted in returns

from corporate and

personal taxes

collected that are four

to five times the

amount of the

foregone taxes from

the incentives from

2005 to 2011

Next Steps

Sources: IBPAP, Everest Group, and Outsource2Philippines (2010–2012)

Initiatives should focus on four action areas

Role of the Government Transforming Public-Private Partnership

Despite the persistent economic downturn experienced

worldwide, the Philippine IT-BPM and GIC industry

remains strong and continues to grow in double digits.

Government and various non-government industry

organizations and associations have come to

recognize the significant contribution of the IT-BPM

and GIC industry to the economy, more transparent of

which are the revenues generated and other value and

jobs created, directly and indirectly, by this fast-growing

sector.

Source: Philippine Development Plan 2011–2016

Government’s

fundamental development

plan aims to support a

globally competitive

services sector

Sources: Government and Industry Data

Broad-based government support is aligned with industry objectives to reach

the goals of Road Map 2016

BETP: Bureau of Export Trade Promotion; BSP: Bangko Sentral ng Pilipinas; CHED: Commission on Higher Education; DepEd: Department of Education;

DFA: Department of Foreign Affairs; DOE: Department of Energy; DOLE: Department of Labor and Employment; DOST-ICTO: Department of Science and Technology-

Information and Communications Technology Office; DOT: Department of Tourism; DTI: Department of Trade and Industry; FTSC: Foreign Trade Service Corps;

LGUs: Local Government Units; NEDA: National Economic and Development Authority; OP: Office of the President

Thank you.