Reaction Entry (April 30, 2011)

Outsourcing sales growth slows in 2009 --  BSP survey

THE COUNTRY'S business process outsourcing sector managed to post strong growth in 2009 amid the start of recovery from the global economic slump, though it continued the slowdown that began the previous ear, the central bank said in a statement yesterday.

A summary of the results of the 2009 Survey of Information Technology-Business Process Outsourcing (IT-BPO) Services which the Bangko Sentral ng Pilipinas (BSP) conducted last year showed total revenues rising 30.6% to 8.3 billion in 2009 from $6.3 billion in 2008, which in turn saw growth slow down to 44.8% from 50.3% in 2007.

Still good

In comparison, growth of the country's gross domestic product slowed to 1.06% in 2009 from 3.69% in 2008.

All IT-BPO subsectors--contact center, transcription, animation, software development and "other BPOs"--posted double-digit growth rates in revenues in 2009:

• Contact center sales, which accounted for half (50.9%) of industry receipts, grew by an annual 48.2% to 4.207 billion;
• Software development sales, which accounted for 20.3%, rose 18.4% to $1.672 billion;
• Transcription sales, which made up 0.7%, posted the biggest increase of 66.8% to $57 million; and
• Animation, which made up 0.6%, rose 44.2% to $52 million. Sales in the "other BPOs" category grew 13.3% to $2.27 billion.

Increase in sales accelerated in most categories from 2008 to 2009, except for software development which saw growth slow down to 18.4% from 28.6% and other "other BPOs," 13.3% from 73.2%.

Export-driven

Industry exports, totaling $7.7 billion in 2009, accounted fro 93.4% of total revenues.

The US remained the top export market for the industry in 2009, accounting for 73.1% of total export receipts at $5.6 billion, followed by Japan ($1.1 billion for 14.3%), Europe ($531 million or 6.9%), Australia and New Zealand ($258 million or 3.3%) and "other Asia" ($110 million or 1.4%).

Equity investments in the industry grew 32.2% to $2.6 billion in 2009, of which 91.8% consisted of foreign equity. That growth, however, was much slower than the 109.5% in 2008.

Industry employment grew by an annual 25.3% to 444,811 workers in 2009, with contact centers accounting fro 57.5% of the total.

Reaction:

Before going back to school last year, my 3 to 4-year academic hiatus was spent working for an offsourcing company, mainly as an online content writer. I wrote articles with topics spanning the spectrum of interests, often even antipodean in nature (think real estate and health articles). I can personally say that for a job that doesn't require any commutes, it pays very well. I know many who make jokes about call center jobs and agents, but I must admit that working for an offsourcing company, although rewarding, is exhausting. I find it peculiar to read about a slowdown in the BPO industry despite its popularity. This may be because, in my opinion, the country is still not completely embracing the tech industry. 

To wit: the minimal share of animation and software development sectors in the market shows dismal realities for my planned career. Although there is no way of saying whether this recent numbers would linger on in the future to come, with the current pace of the local tech market, that number may in fact remain its sluggish course. On the other side of the coin, however, this small number may be from the fact that many IT graduates either prefer working abroad or are siphoned off by foreign tech companies. Though the latter seems inevitable, the former can still be remedied by, in my opinion, promoting further an embrace toward the importance of technology. The world has gone past the Information Technology Age and the country is barely keeping up speed, and this slowdown may be an evidence of that. There is an unbalanced nature in the way the country lionizes its choice of employment. By choosing to succumb to trend rather than spreading out the focus to include other potential profitable sectors, I fear that the country may not reach a point when it can evenly compete with other BPO giants, like India.

In addition, the popular preference of working abroad is another challenge. What with the unending workforce diaspora that traverses crucial professions (from nursing to IT), this slowdown might hinder the growth of the country's BPO industry through the constant decrease of potential BPO employees. Even with the US holding the highest share in industry exports, without the sufficient number of able-bodied employees, established BPOs and start-ups alike would only find themselves up a stump. I, myself, even prefer to work abroad, mainly because of the money. There are far more opportunities in other countries and most of them are even better than what I can find here. Although I admit that I may become an instrument to the slowdown of the BPO industry in the future, I cannot root myself to this slow-growing industry. Unfortunately, this slowdown is another evidence of the country's reluctance to welcome the imminent confluence of tradition and progression.

While I find it appealing to work abroad, my heart still yearns for a future employment in the country. Yet these numbers are portents of what will be for my chosen career. I know that the Philippines mainly depends on its agricultural market. I, however, cannot live on rice alone. Everyday I am reminded of how much the country is missing out on the advantages of information technology while it places health practitioners to a much higher pedestal. While we produce high-quality health professionals, the same cannot be said for our local IT experts. Without enough focus on my side of the market, I may be forced to look elsewhere. Selfish as it may sound, the reality is that my chosen career remains a minority in the country's sea of industries.