The Philippines’ IT-BPM industry has a reputation of withstanding global factors as a sign of its robustness towards continuous growth. From the Asian financial crisis, to the global tech bubble and the real estate turmoil that adversely affected the United States economy, the local IT-BPM industry is no stranger to external shock.
In the first half of 2017 and counting towards the last quarter of the year, the IT-BPM industry has found itself in uncharted waters and this time, it is against internal shock.
According to the American Chamber of Commerce of the Philippines (AMCHAM), the alarming drop of the rate of investment in the country’s IT-BPM industry has both short term and long term consequences.
Factors such as political stability and the tax reforms that changed the IT-BPM’s are considerable factors on why investments have dropped by 34% in the second quarter of 2017.
IT-BPM pledges reached P4.9 billion in the second quarter, but it was a 34% drop compared to the previous year’s 2016 record according to the Philippine Statistics Authority (PSA).
Furthermore, the decline is a continued slump of IT-BPM investments since the second quarter of 2016.
“There are some short-term uncertainties in the sector such as future tax policy and insufficient supply of Peza-approved office space, while in the longer term lower skilled call center work will be automated and may be returned to sites in the US,” said John Forbes, AMCHAM’s senior adviser as quoted by the Philippine Daily Inquirer.
The IT-BPM industry strongly opposed the Rodrigo Duterte Administration’s comprehensive tax reform program as it reduced the tax perks that the industry has long enjoyed on value-added tax exemptions.
In Tholon’s recent Outsourcing Destinations survey, the Philippines also saw its major business cities dip in rankings due to the lack of digital innovation.
Despite internal uncertainties, the IT-BPM industry remains optimistic because of the strength of the country’s economy and projects fueling hopes that the IT-BPM’s revenue will outpace OFW remittances.
Ezy Outsourcing Hub stands firm with the country’s IT-BPM industry as the company provides an outsourcing / offshoring gateway service for businesses that plans to expand operations in the Philippines. The country remains among the world’s top BPO capable regions.
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