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

See all articles by Nicholas Andrew Price

Nicholas Andrew Price

Asian Institute of Management

Jamil Paolo Francisco

Asian Institute of Management

Christopher Ed Caboverde

Asian Institute of Management

Date Written: November 24, 2016

Abstract

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

Price, Nicholas Andrew and Francisco, Jamil Paolo and Caboverde, Christopher Ed, IT-BPO in the Philippines: A Driver of Shared Prosperity? (November 24, 2016). RSN-PCC Working Paper 16-002. Available at SSRN: https://ssrn.com/abstract=2880408 or http://dx.doi.org/10.2139/ssrn.2880408

Nicholas Andrew Price

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

Jamil Paolo Francisco

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

Christopher Ed Caboverde (Contact Author)

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati City, Metro Manila
Philippines

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