IT-BPO in the Philippines: A Driver of Shared Prosperity?
RSN-PCC Working Paper 16-002
51 Pages Posted: 7 Dec 2016 Last revised: 19 Jul 2017
Date Written: November 24, 2016
The Philippines' IT-BPO sector has grown steadily since its initial boom at the beginning of the 21st century. Sector revenue reached USD 22 billion in 2015 and is expected to overtake OFW remittances in 2017. In 2015, IT-BPO accounted for 7.3 percent of Philippine GDP and employed 1.2 million full-time employees. While growth has been impressive, the researchers ask whether the IT-BPO sector can promote shared prosperity in the Philippines; that is, growth that creates opportunities for poverty reduction, income growth, and gainful employment for all Filipinos. The researchers develop a framework for human capital development in the sector, and assess IT-BPO's contribution to shared prosperity using interviews with practitioners and regulators, as well as an analysis of industry data. The researchers found that structures are in place that enable the sector to promote shared prosperity. The competitive global trade in services and the ever-changing information technology incentivize the sector to invest significant resources in human capital development, and to put emphasis on learning-by-doing, skills acquisition, and training rather than the educational background of the employees. This emphasis on learning-by-doing and training makes the sector accessible to a broader labor pool — employees without a college degree can be hired and can advance in their careers in the sector. On the other hand, several challenges must be overcome, such as the over saturation of firms in Metro Manila and the quality of technical-vocational education and training. When employees can fully take advantage of career opportunities in the sector, then the IT-BPO sector can be considered a driver of shared prosperity in the Philippines.
Keywords: Philippines, IT-BPO, shared prosperity, learning-by-doing, TESDA, IBPAP
JEL Classification: E24, J24, O14, O15
Suggested Citation: Suggested Citation