IT-BPM revenues grow 6% in 2018

MANILA, Philippines — Revenues of the information technology – business process management (IT-BPM) sector are estimated to have grown by up to six percent last year, the IT and Business Process Association of the Philippines (IBPAP) said.

IBPAP president Rey Untal told reporters revenues of the sector likely reached as much as $24.8 billion last year.

“That is the general estimate we are forecasting. Once we complete the study at the sub-sector level, we will be able to release overall numbers we are getting,” he said.

In 2017, revenues of the sector reached $23.4 billion.

While revenues are expected to have risen last year from 2017, the estimated growth is below the compounded annual growth rate target of nine percent under IBPAP’s roadmap until 2022.

Employee count of the IT-BPM sector also rose by 5.1 percent with 1.23 million direct employees last year, albeit lower than the eight percent target set by the industry roadmap.

“I think there was prevailing discussion on overall uncertainty. It is less about what eventually the fiscal regime will be. More of how we are managing fiscal forecast,” Untal said.

The government’s second package for tax reform or the Tax Reform for Attracting Better and High Quality Opportunities bill, which seeks to gradually reduce the corporate income tax to 20 percent from 30 percent, and remove the five percent tax on gross income earned (GIE) paid in lieu of all national and local taxes by firms registered with the Philippine Economic Zone Authority, is a concern for IBPAP with many of its firms enjoying the GIE benefit.

With both revenue and employee count numbers growing at a slower pace than what was set under the roadmap, Untal said the IBPAP is undergoing a recalibration exercise to come up with new targets.

The IBPAP roadmap 2022 has set a nine percent annual growth rate for revenues and eight percent yearly growth rate target for employee count for the industry to hit $40 billion worth of revenues and directly employ 1.8 million individuals by 2022.