In an article on PhilStar.com, Trade Secretary Gregory Domingo said that the Philippine economy could grow at a rate faster than the expected 7% this year. That is, if oil prices remain at below $60 per barrel.
The same article also states that according to a survey of 57 countries, the Philippines ranked second among the top 20 countries that are expected to dominate global growth this year. The business process outsourcing industry is projected to contribute largely to the country’s rising gross domestic product and consequently drive higher economic growth.
Below are some of the ways on how outsourcing can boost the Philippine economy to 8% in 2015.
Continuous Growth in the BPO Industry
A statement made by Secretary Arsenio Balisacan released last January 29, 2015 states that the largest contributor to growth has been the services sector, which includes BPOs. He described the BPO industry as vibrant and said that it is one of the sectors what will bolster services and contribute to economic growth.
The Philippines currently ranks second place in the Tholons list of 2015 Top 100 Outsourcing Destinations. The number of BPO hubs the country has that made the list also increased from seven to eight. Aside from that, India, the country currently holding the top spot, has been reported to be losing 70% of voice and call center business to the Philippines. The industry is continuously growing and is expected to keep generating more business and investments in the country.
Large Talent Pool
Rhicke Jennings, President of the American Chamber of Commerce in the Philippines (AmCham), said in an article that the country needs to “set higher and more specific goals to achieve the much coveted inclusive growth.” To make this happen, Jennings said that the unemployment rate must fall below 5% to reduce poverty to only 18% by 2016.
The outsourcing industry is significantly reducing the unemployment rate each year. It currently saw an all-time high when it reached over one million employees last year. This growth was driven mainly by expansion programs of several BPO companies. Obviously, by adding jobs, the industry is also creating new income and increasing the number of Filipinos with money to spend.
Government Support and Investments on Training
The country strongly supports the BPO industry. In fact, in its development plan for 2011 – 2016, it singled out the industry as a priority development area for investment. To encourage more investors in the industry, the country is issuing a number of incentives such as tax holidays and tax exemptions, which makes the Philippines a more attractive outsourcing destination.
Aside from this, the country has allotted a $25.19 million budget for training of talent in an effort to create a more competitive workforce. They have also recognized the growing trend moving towards Knowledge Process Outsourcing and are already working with companies to prepare for this.
Clearly, with the continuous developments now underway, the Philippine outsourcing industry is poised to achieve its goals for 2015 and the years to come. This, with the help of other positive economic factors, will boost the country’s economic growth this year.