MANILA — Information technology-business process outsourcing (IT-BPO) industry and remittances will remain as growth drivers for the Philippine economy, United States-based think tank IHS Global Insight said.
“Two key growth drivers for the Philippines economy are the rapidly growing IT-BPO sector and the strong flow of remittances from Filipino workers abroad,” IHS Asia-Pacific Chief Economist Rajiv Biswas told the Philippines News Agency in an e-mail.
Biswas noted that export revenue of the country’s IT-BPO has grown more than double between 2008 and 2014 and created million jobs.
At end-2014, the industry posted an 18.7 percent revenue growth to USD18.4 billion.
Earlier, Biswas said the Philippines — along with Malaysia — will lead Southeast Asia as global IT-BPO hub with its large pool of university-educated and English-speaking workforce.
Meanwhile, total remittances in 2014 went up by 5.8 percent to USD24.31 billion, the Bangko Sentral ng Pilipinas (BSP) reported.
“This provides a key source of strength for the Philippines balance of payments,” the IHS economist noted.
According to Biswas the growth in IT-BPO and flow of remittances contribute to the expansion of construction sector.
He mentioned that overseas workers’ remittances push consumer expenditure and demand on residential construction while IT-BPO industry boosts the commercial property sector.
“An estimated 35 percent of annual worker remittances are flowing into new residential property purchases, which has created robust expansion in the residential construction sector in major cities in the Philippines n recent years, with momentum expected to remain strong in 2015-2016,” he added.
“Meanwhile, the rapid growth of the IT-BPO industry is also creating positive transmission effects for the rest of the economy, including for the commercial property sector, with rapid growth in demand for commercial floor space, underpinning the development of existing and new office parks in urban centers,” Biswas further said.
Data from the Philippine Statistics Authority noted that construction activities at end-2014 increased by 13 percent with 121,256 projects registered from 2013’s 107,765 projects.
Majority of the projects came from residential projects with 86,072 permits issued last year while non-residential projects had 14,215 permits.
“The Philippines economy has been growing at a very rapid pace over the past three years, and strong growth of 6.4 percent forecast for 2015, boosted by the rapid growth of the IT-BPO sector, buoyant worker remittances from abroad and strong growth in the residential and commercial property sector,” Biswas stressed.