The Information Technology Business Process Association of the Philippines remains hopeful about its growth outlook in 2019 despite the government’s planned rationalization of tax incentives.
“We have been able to look at 2017 as not a good year. 2018 was also lower than our projection. We are very hopeful about 2019, but we have yet to see,” said Lito Tayag, chairman of IBPAP and country managing director of Accenture Philippines.
The business process outsourcing sector reported a 5.1-percent growth in 2018, below the 8-percent annual growth target under Roadmap 2022.
The Philippines BPO sector, however, still grew faster than the average global market growth of 3 percent to 4 percent in 2018. The BPO industry ended 2018 with 1.23 million employees in the Philippines, according to the group.
It said given the slow growth of the industry in the last two years, the association would recalibrate its employment and revenue targets under the roadmap.
“The actual exercise is ongoing right now. I think within September we will be able to come up with the recalibration of the roadmap that happened two years ago,” Tayag said.
Under the roadmap, IBPAP is targeting to generate $40 billion worth of revenues and 1.8 million direct employees by 2022.
Tayag said the group was keenly watching the impact of the proposed Tax Reform for Attracting Better and High-Quality Opportunities bill on the industry.
The Trabaho bill aims to remove the 5-percent tax on gross income earned paid in lieu of all national and local taxes by the firms registered in economic zones and replace it with corporate income tax. The bill proposed to cut the corporate income tax rate gradually to 20 percent from 30 percent.
“It’s something that we keenly watch in terms of its impact for us, but since it’s still in Congress, this is something that we are keenly watching and hopefully it will continue to support the whole industry in terms of our growth aspirations,” Tayag said.
Texas-based Everest Group earlier said the Philippines continued to account for 16 percent to 18 percent of the estimated global IT-BPM market of $83 billion.