BPO earnings seen growing faster than previously projected in 2021

MANILA, Philippines — Dollars generated by the local call center industry are expected to grow faster than previously projected this year, in a sign of the sector’s resilience despite on-off lockdowns in the past quarters.

Business process outsourcing (BPO) receipts are projected to grow 9% this year, higher than the previous projection of 5% in September, the Bangko Sentral ng Pilipinas reported Friday.

Explaining the upgraded forecast, Zeno Abenoja, senior director at the BSP’s economic research department, reported that BPO earnings in the first nine months grew 8.3% on-year, already surpassing the central bank’s old forecast for the entire 2021.

If the new projections come true, the BPO industry, a key dollar engine of the Philippines, would reverse the 1% contraction posted last year, when pandemic curbs were at their tightest. For next year, BSP forecasts BPO receipts to grow 5%, unchanged from the prediction it gave in September.

Jun Neri, lead economist at the Bank of the Philippine Islands, agreed with the central bank’s new forecasts. 

"The sector barely declined last year despite the pandemic and investments in the sector likely grew meaningfully because they are less susceptible to infections but also because the demand for tech and digital outsourcing have promising prospects moving forward,” Neri said in a Viber message. 

But despite the bigger-than-expected BPO earnings, the BSP said it projects the country’s balance of payments to post a $1.6 billion surplus, significantly lower than the $4.1 billion surplus penciled in earlier due to “foreseen further widening of the trade-in-goods deficit.” Last year, the Philippines posted a BOP surplus of $16.0 billion surplus. 

“The latest BOP assessment for 2021 factors in pockets of optimism amid encouraging economic outturns in recent months on the one hand and the continued high uncertainty from pandemic-related challenges on the other hand,” the BSP said. 

“For 2022, the continued growth in advanced economies bodes well for Philippine trade and investments. This could also lend support to robust BPO revenues and overseas Filipinos remittances as businesses are likely to outsource or hire more overseas workers to fill in their manpower needs,” it added.