The IT-BPM industry will hire fewer new workers and make less money than expected in the last years of the Duterte administration after the latest projections pulled down the already lowered forecast for 2022.
The Information Technology and Business Process Management (IT-BPM) sector is projected to create 130,000 new jobs at most in 2022— a far cry from the original 500,000 new jobs that would have been created based on projections made in 2016.
By then, the industry, one of the biggest employers in the private sector, will have a total headcount of 1.43 million workers. Its revenues, meanwhile, are projected to reach $29.09 billion at most in 2022, a figure that used to be the low-end of its growth range when the industry first lowered its forecasts last year.
This was according to the latest results of the industry’s so-called second recalibration exercise, which was done by research firm Everest Group. The results were first announced in an industry conference last Thursday night.
It was also Everest Group that lowered the roadmap of the industry last year after taking into account the potential impact of the Duterte administration’s move to rationalize tax breaks of companies inside economic zones, many of which were IT-BPM firms.
In 2019, Everest Group said the industry would have a compounded annual growth rate (CAGR) of 3.5 to 7.5 percent in 2022 for revenues, and then a CAGR of 3 to 7 percent for employment.
On Thursday, however, these projections were further lowered to a growth of 3.2 to 5.5 percent for revenue and 2.7 to 5 percent for headcount.
H. Karthik, who leads Everest Group’s global sourcing practice, said on Thursday night that hitting these growth figures would depend on multiple factors.
These, he said, included the rollout of an effective COVID-19 vaccine as well as the impact of the administration’s tax reform bill, which is now known as CREATE or the Corporate Recovery and Tax Incentives for Enterprises Act.
The latest figures do not necessarily mean job cuts and declines in industry revenues. However, the data show how low expectations had weakened for one of the country’s top dollar earners because of multiple factors, some of which are beyond their control. Back in 2016, the industry thought it would hit $39 billion in 2022 and have 1.8 million workers.
The industry not only has to deal with the impact of the pandemic, but even cope with the possibility that the Duterte administration might rationalize its tax breaks, which helped attract foreign investors in the country during the Aquino presidency.
Rey Untal, president and CEO of the IT and Business Process Association of the Philippines (IBPAP), said in an online press briefing on Friday that hitting the targets did not rely squarely on the shoulders of the industry.
“If you ask me, I really would love to prove the [Everest Group] study wrong and be able to grow higher than the the five and a half percent that is projected. But work is cut out for us to achieve that,” Untal said.
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