IT-BPO industry exports could reach $ 55 Billion Dollar in 2020 - World bank

World Bank says if the government of the Philippines can fully develop the information-technology and business-process outsourcing (IT-BPO) sector services industry, it has the potential to earn export revenues of $30 billion to $55 billion by 2020.

This is according to a study made by World Bank consultant Raja Mitra, who estimates that medium-term export revenues from the sector could reach far more than the $9 billion it controlled in 2010.

Mitra made three assumptions that resulted in a low-end medium-term export revenue estimate of around $30 billion, the medium-end estimate at $45 billion and the high-end estimate at $55 billion.

“While not a panacea...expanding the scale and scope of exports of IT-BPO services as well as domestic industry development and use of ICT [information and communication technology] will offer new avenues that can help the economy to be more productive and accelerate efforts to achieve inclusive growth within the country and to interface and catch up with the rest of the world,” Mitra said in a slide presentation.

With revenues of this size, Mitra expects the IT-BPO services industry to contribute as much as 11 percent of the country’s gross domestic product (GDP) by 2020. In 2010 the industry contributed around 5 percent of GDP.

Mitra also projects that Filipinos employed directly and indirectly by the industry will reach 6.8 million by 2020. Those who will be directly employed by the industry could increase to 1.8 million by 2020 from 500,000 in 2010, while those who are indirectly employed could rise to 5 million by 2020 from 1.75 million in 2010.

However, these are merely projections and, in truth, Mitra said, the Philippines’ full potential in the industry has not been met. For one, the country lags behind in providing IT-related services and the use of high technology in all its IT-BPO services.

Mitra said these two factors would significantly help in growing the industry and allowing the Philippines to also shift to high-value back-office services, which are necessary to earn in more revenues.

“[It is] important to simultaneously develop the IT, telecom, education and other knowledge economy sectors and to enhance the potential synergies between BPO and other ICT sectors both in terms of external and domestic markets. Such a development offers significant promise it can contribute toward achieving sustainable and inclusive economic growth,” Mitra said.

Mitra said the Philippines already has a larger BPO industry than India and has already overtaken it in call-center operations. Metro Manila now has more people employed in the BPO export industry than any other city in the world.

Data collected by Mitra showed that the sector’s export revenues-ratio-to-GDP was less than 1 percent in the early 2000s and steadily grew to 4.8 percent in 2009. Its share of total exports, on the other hand, increased to 16 percent in 2008 from less than a percent in 2000.

Mitra also said the industry has already come a long way in boosting employment in the country. For one, direct employment in the sector as a share of the total labor force employment has risen to more than 1 percent from less than 0.1 percent in the early 2000s

 

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WORLD Bank ranked the Philippines among world's top service exporters

The World Bank has ranked the Philippines among the best performers in the services exports, particularly in the business process outsourcing (BPO) sector, but urged further reforms in the travel and tourism sector if the country intends to sustain growth moving forward.

World Bank senior trade economist Sebastian Saez said in a report that the services sector depends on human capital, the quality of the telecommunications network, and the quality of institutions.

“The experience of exporting outsourced business services in the Philippines shows that by creating an enabling environment where the private sector can deploy its creativity, developing countries can reap the benefits that services exports opportunities are opening,” Saez added.

The Philippine experience shows that services are a viable option for export diversification, he said, adding that trade in goods is no longer the only vehicle to diversify exports for developing countries.

Services exports as a percentage of total exports increased from nine percent in 1999 to 21 percent in 2009 in the Philippines. Its services exports rose 3.6 percent on average per year during the period, higher than that of Asia as a group, which averaged 1.5 percent per year. Unlike many developing countries, the Philippines had been a net exporter of services since 2006.

The Philippines is currently the third largest player in BPO in the world, accounting for 15 percent of the global BPO market, after India (37%) and Canada (27%).

Business Processing Association Philippines (BPAP) chairman Fred Ayala said that the BPO sector currently employs close to 500,000 people and generated about $9 billion worth of exports in 2010.

The industry’s target in terms of annual revenue is $25 billion by 2016 and a direct workforce of 1.3 million.

“There is an urgent need to develop supervisors, middle managers, and more skilled workers to respond to increasing market demand for a broadening array of knowledge-based, complex services,” Ayala said.

The World Bank report also highlights the importance of developing the tourism sector.

Tourism accounts for about nearly seven percent of the country’s gross domestic product (GDP), and directly employs about 3.5 million people. But the report said that tourism could contribute more to help address poverty should reforms outlined in the National Tourism Development Plan (NTDP) are effectively implemented.

The study said major impediments to tourism competitiveness are largely associated with weak ground and air transport infrastructure - roads, railways, ground transport network, and airports. Weak physical infrastructure, it says, lowers accessibility to tourism destinations and discourages private sector investments in accommodation facilities.

Tourism Undersecretary Daniel Corpuz said the government has already started to put in place important reforms that will increase tourism arrivals in the country. The Philippines implemented a liberalized air policy in selected international airports outside Metro Manila to promote greater tourism flows to the country.

“More reforms are underway to transform the Philippines into a ‘must experience destination in Asia,’” Corpuz added.

 

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20 Million years Extinct sea cow fossil found in Philippines

The bones of an extinct sea cow species that lived about 20 million years ago have been discovered in a cave in the Philippines by a team of Italian scientists, the expedition head said Monday.

Several ribs and spine parts of the aquatic mammal were found in February and March in limestone rock above the waters of an underground river on the island of Palawan, said University of Florence geologist Leonardo Piccini.

"The fossil is in the rock, in the cave. We cannot remove it and we don't want to extract it. We would like to wait (for) when the technology will allow us to study the fossil without extracting it," Piccini told AFP.

Speaking on the sidelines of a symposium at the Philippine presidential palace where the find was announced, Piccini said it was a rare discovery in the region from the Miocene era -- 20 million years ago.

"It's the first remains of this kind of animal in the area, so it is important in reconstructing the habitat and the diffusions of this animal in the Miocene," he added.

Initial comparisons with fossil specimens suggest it belongs to one of two extinct species of plant-eating sirenia, also known as sea cows, according to research by Federico Panti and Paolo Forti, a member of the Palawan expedition.

They said the animal would have been about 180 centimeters (about six feet) long.

Two sea cow species live to this day, the dugong of the Indo-Pacific region and manatees of the Atlantic basin.

The paper said such fossil finds in the East had been limited to India along with some fragmentary finds in Madagascar, Pakistan, Sri Lanka, and the Indonesian island of Java.

"The specimens (found) in the cave of Palawan Island represent the first from the Philippines and the easternmost occurrence in the region," it added.

It called on the government to protect the area of the find in the Puerto Princesa subterranean river, which is being heavily promoted as a major tourist destination.

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