THE PHILIPPINE information technology and business process management (IT-BPM) industry is still bullish on growth, as it expects to generate $42 billion in export revenues and increase headcount to 1.97 million in 2026, an industry group said.
The Philippines is also aiming to become the next hub for global capability centers (GCC), as it has seen an uptick in interest from multinational companies, the group added.
IT & Business Process Outsourcing Association of the Philippines (IBPAP) President and Chief Executive Officer Jonathan R. Madrid said the industry has so far created 450,000 new jobs and $10.5 billion in revenue since the creation of the industry roadmap in 2022.
“Now, for 2025, that includes 80,000 new jobs and $2 billion in incremental revenue. That is a growth of 4% and 5.3%, respectively,” he said at the International IT-BPM Summit on Tuesday. “By 2026, we project to reach $42 billion in revenue and close to a total of two million jobs for Filipinos.”
The expected jobs and revenues for 2026 are aligned with the baseline projections indicated in the IT-BPM Roadmap 2028.
Mr. Madrid said the industry’s growth will still be driven by core segments — banking, financial services, and healthcare.
While the Philippines remains strong in contact centers, he noted faster growth coming from GCCs. “(There’s) a slightly higher growth rate from GCCs. Coming from a lower base, you tend to see more growth from that sector,” he said.
GCCs are offshore units established by multinational corporations to provide specialized services such as finance, IT and customer support to their global operations.
Mr. Madrid said he sees increased interest in setting up GCCs in the Philippines from prospective clients in the US, Australia and Europe.
Globally, GCCs are reshaping the IT-BPM industry, with its market expected to grow to $155 billion by 2027.
To date, there are 170 GCCs in the Philippines, growing by around 10 each year, but India continues to dominate with its 2,000 GCCs.
“We know that India dominates as the world’s GCC hub, showing how GCCs have evolved. They are no longer cost centers but strategic engines of innovation and transformation,” Mr. Madrid said.
“I think the Philippines should aspire to do the same. We have the talent, we have the scale, the cost efficiency, and the ecosystem maturity to become the next global GCC hub,” he added.
LEGISLATION NEEDED
IBPAP Chief Operating Officer Celeste B. Ilagan said more needs to be done on the policy front to support the growth of GCCs in the Philippines.
“GCCs have different needs compared with the traditional BPM providers,” she said, adding that the group wants Congress to pass legislation to help attract more GCCs into the country.
In particular, she said that the industry needs a law that is similar to the Regional Operating Headquarters (ROHQ) law. However, this move was “abandoned” in favor of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, she added.
“We know that other countries have this international business services law that they are already implementing so that they can get more GCCs to their country. So, we are trying to work along those lines as well,” she added.
The ROHQ Law, or Republic Act No. 8756, provides incentives to multinational companies establishing ROHQs and area headquarters in the country.
Under the law, companies that do not derive income from the country are not subject to income tax, while ROHQs and area headquarters are exempt from value-added tax, local taxes, and import tax on training materials, equipment, and motor vehicles.
“We are not looking at reforming the CREATE Act. It is possibly a new piece of legislation that will be similar to the previous ROHQ law. It really was targeted to attract GCCs to the country,” she said.
“GCCs are more ‘cost-plus.’ They are cost centers, and therefore, a different set of incentives will be more important to them. That is what we are looking to do in the next few months,” she added.
TOO BIG TO FAIL
Meanwhile, Mr. Madrid said the IT-BPM industry, which makes up at least 8% of the economy, faces the challenge of remaining “indispensable.”
“The Philippine IT-BPM industry is too big to fail. But just as important, it is too important not to evolve. We cannot afford complacency. We cannot allow the sunset industry narrative to take root. Because we’re growing faster than the global market,” he said.
“And the world continues to see the Philippines as a trusted, indispensable partner. So, our challenge is not survival. Our challenge is to remain indispensable by strengthening our value,” he added.
Mr. Madrid said only 12% of Philippine companies report a high level of maturity, while 70% are expected to reach a high level of maturity by 2028.
“So, the winners will not be those companies chasing AI (artificial intelligence) demos. The winners will be those who rewire workflow, integrate with AI, but with a human at the core, and close the skills gaps in cloud, cybersecurity, and automation,” he said.
“Now, this is the reason why IBPAP is calling for a national AI strategy, a strategy that ensures that AI adoption is not fragmented and is not left to chance. But it is guided by a coherent national agenda,” he added.
The AI strategy, he said, should build digital and AI skills at scale, establish governance and trust frameworks, and enable industry-wide transformation. — Justine Irish D. Tabile
