The Philippine

Advantage in
IT-BPM
Jomari Mercado
President & CEO, IBPAP
October 17, 2014

Philippines 2013 Performance

FTEs

Philippine IT-BPM industry size

20062013; US$ billion

x%

YoY Growth

Revenue
(US$M)

Rev %
inc.
fr 12

Voice BPO

586,000

10,000

15%

Non-voice
BPO/KPO

169,818

2,915

18%

ITO

71,196

1,767

52%

Health Info
Mgt & Care

65,895

988

114%

Engineering
Services

11,920

216

5%

Animation

9,200

132

0%

Game
Development

3,500

50

0%

917,529

16,067

22%

16.1
13.2
11.0
8.9

6.1
3.4

4.5
31%

34%

7.1

22%

19%

24%

25%

17%

45%

2006 2007 2008 2009 2010 2011 2012 2013

# FTEs
236
(~000)
Global
share1

5%

298

6%

777

917

371

424

527

6%

7%

8% 9.5% 10.4% 11%

640

TOTAL FTEs

1Philippines IT-BPM market as percentage of global offshore services market, in revenue terms
Sources: BPAP, ACPI, CCAP, GDAP, HIMOAP, PSIA
Copyright 2012: BPAP. All rights reserved.

One
Million
by the numbers
2

Advantage Vision

IBPAP, Tholons Analysis

Advantage Talent
Annual Graduate Output (000)

Tholons Analysis

Graduate Output of Global IT BPM

Locations

Advantage Scale

~300k employed outside

of Metro Manila
~150k employed in 3
Centers of Excellence
Domestic Growth +
Impact Sourcing
pushing up employment
in Next Wave Cities

IBPAP, ICTO, Tholons Analysis

Advantage Cost
Indexed Operating Costs per FTE per Annum (BPM Market Range)

Tholons Analysis

Impact on the Philippine Economy

GDP
USD billions
100% =

98.8

Total Exports
USD billions
272.0

100% =

47.5

Others
IT-BPM
76.0
79%

95%
97.6%

21%

94%
5%
2005
6%

2.4%
2005

2013

2013

Industrys 21% CAGR for 8 years

exceeded 6% CAGR of total
exports for the same period
Employment contribution
Million jobs
100% =

1.1

3.1
84%

88%
IT-BPM industry contributed
6% to total Philippine GDP
in 2013

Note: GDP at current prices

Source: Philippine Statistical Authority (PSA); BSP; DOLE-BLES; team analysis

12%
2005-06

16%
2010-2013

The IT-BPM industry contributed

16% to annual increases in total
no. of employed individuals for the
7
past four years

Second-order Effects from Direct Employment

Transportation and Communications

USD335 million

1.7 billion
Housing

jeepney rides
34 million P500
prepaid cards

Others
USD1,340 million
34 million Bench
jeans
6.7 million iPods

USD670 million
90,000 middleclass houses

USD1,000 million
Investments
Financial institutions

Food

5% 20%
10%

USD2,000 million
1.7 billion Chickenjoy
meals
1 billion Big Mac meals

Savings

Taxes

15%

30%
20%
~USD6.7 billion annual salaries
and benefits

* Based on consumption of average Filipino family; savings of 80th and 90th percentile
Source: National Statistics Office; team analysis

USD1,340 million
1 million classrooms
7 billion days of
nutrition program

Success Stories

Success Stories

10

Facing the Challenges

Middle management availability and
experience
Niche skills, ie investment banking
Growth of tourism industry
Change of leadership in 2016
Changing policies and regulations
Growth outside Metro Manila
Emergence of other countries
Rise of new technologies
Impact of ASEAN integration
11

The Road to 2020

13

growth

m
i
l
I
i
o
n
1.3
direct employment
by 2016

by the numbers
14

US$

billion
2016 IT-BPM Revenue

by the numbers
15

Thank

you!!
16