RP’s IT-industry shows resiliency to crisis – BSP survey

April 19, 2010 10:42 am 

MANILA, April 19 – Philippines’ information technology (IT) and IT-enabled service industry has proven its resiliency even before the recent global crisis reached its peak, a Bangko Sentral ng Pilipinas (BSP) survey showed.

BSP conducted the survey in 2007 and 2008 participated in by 648 companies in 2008 and 624 in 2007, all of which were involved in the operation of call centers, medical and legal transcription, animation, software development and other business process outsourcing (BPO) activities that are members of the IT and IT-enabled Service Industry Associations and registered with the Department of Trade and Industry (DTI)-attached agencies like the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI).

In a statement, the central bank said total revenue of the industry, otherwise known as the IT-business process outsourcing (IT-BPO), was placed at around US$ 6.3 billion in 2008, an increase over year-ago’s US$ 4.4 billion reported revenue.

It said “the industry continued to grow at a rapid double-digit rate (44.8 percent), although this was slightly lower than the 50.3 percent growth in 2007.”

“Top officials of the different outsourcing companies and associations remained bullish on the prospects of the industry, citing that multinational firms are likely to outsource to cheaper locations like the Philippines to trim down costs,” result of the survey said.

The survey showed that by IT category, the “other BPOs” registered the highest growth in revenue in both 2008 at 73.2 percent and 2007 at 66 percent “indicating that the local outsourcing industry has shifted towards more value-added chain activities.”

Contact centers came in second after posting a revenue growth of 38.4 percent in 2008, but this is lower than its 40.9 percent revenue growth in the previous year.

Revenue growth of software development in 2008 stood at 28.6 percent while transcription posted a growth of 4.1 percent but is a “marked slowdown” from the previous year’s 60.6 percent revenue growth “as some foreign clients shifted from the Philippines to other transcription service-providing countries to trim down costs at the height of the financial turmoil.”

However, the survey showed that that IT-enabled services exports jumped by 51.5 percent to US$ 5.3 billion in 2008 from the US$ 3.5 billion in the previous year.

“Export earnings comprised about four-fifths of total industry revenues in 2008 and 2007,” it said.

All sub-sectors reported that more than 70 percent of their revenues were sourced from exports, with the animation sub-sector having the highest export-to-revenue ratio of 95.8 percent in 2008.

The industry’s total equity investments totaled reached US$ 2 billion at end-2008 and bulk or 93.3 percent amounting to US$ 1.8 billion represented foreign equity participation.

Persons employed in IT and IT-enabled services industry reached 355,135 in 2008, an increase of 30.8 percent than the previous year’s 271,556.

The survey traced the increase in the employment rate in the industry to the “additional demand from newly opened cyberparks in 2008 and increased supply of more qualified IT hires following the availability of scholarship programs offered by the government.”

Compensation paid by the industry totalled to US$ 2.8 billion in 2008, 29.7 percent higher than year-ago’s US$ 2.1 billion.

While average annual compensation per employee in the industry during the same period was at “US$ 7,778 (or about P346,000) in 2008, slightly lower by 0.8 percent than the US,841 level in 2007.” (PNA)

LDV/JS

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