PHILIPPINE business process outsourcing companies are confident they can deliver $45 billion in revenues next year, even as the dollar-earning sector faces compounding pressures from artificial intelligence (AI) and stiffer competition from other outsourcing destinations.
That target, set by the IT and Business Process Association of the Philippines (IBPAP), means the industry would have to grow by about 6 percent from the $42.3 billion projected for 2026.
“We project continuing positive growth,” IBPAP president and CEO Jack Madrid said at a briefing on the sidelines of the International IT-BPM Summit. “Some things have to happen before we achieve that number. But that, we believe, is a realistic target.”
However, the industry expects employment to grow at a slower pace as companies increasingly turn to AI, which Madrid noted allows them to perform the same — or potentially higher-value — work with fewer employees.
In 2026, IBPAP expects employment to expand by 2.6 percent, or about 50,000 additional jobs. A similar 2.6-percent increase in employment is projected for 2027.
Revenue per worker, meanwhile, is expected to climb to $22,600 in 2027 from $21,800 this year.
As AI takes on more routine work, IBPAP is seeking deeper expertise in banking and finance, healthcare, cybersecurity and data analytics to help the Philippines move up the value chain.
Another potential challenge is intensifying competition from other outsourcing destinations, with Madrid acknowledging the Philippines is no longer necessarily the lowest-cost option.
“Despite the fact that the Philippines is no longer the lowest cost, we remain a preferred destination because of the advantage of our talent,” Madrid said. “But cost for any investor will always be a big criterion.”
“We have to be mindful that it’s not just India or the Philippines anymore,” he added.
Still, IBPAP is banking on growth drivers such as expanding global capability centers (GCCs), higher-value services from existing clients and markets beyond the industry’s traditional North American base.
Around 200 GCCs already operate in the Philippines, employing about 290,000 workers. Madrid said “tens” of companies are exploring either expanding their operations or locating in the country.
By 2028, IBPAP projects the industry could reach $50.5 billion in revenue and employ 2.14 million workers. (Logan Kal-El M. Zapanta © Philippine Daily Inquirer)
