Citigroup, Inc. (Citi) has projected the Philippine economy to grow by around 6% in 2025, supported by sustained momentum in the business process outsourcing (BPO) industry. While this growth aligns with the lower end of the government’s 6-8% target, it underscores the vital role of the BPO sector in driving economic development.
Citi Asia South Head Amol Gupte emphasized the importance of the BPO sector, stating, “The Philippines will continue to benefit from [the BPO industry] and create a lot of jobs. Moving up the value chain in global capability centers positions the Philippines alongside India as key players.”
IT-BPM Industry: A Key Contributor
In 2024, the information technology and business process management (IT-BPM) industry generated $38 billion in export revenue and employed 1.82 million full-time workers. By 2028, the sector aims to achieve $59 billion in revenue and employ 2.5 million individuals, according to the Philippine IT-BPM Industry Roadmap.
Gupte highlighted the need for the Philippines to enhance its BPO offerings by moving beyond voice-based roles to middle-office jobs. This strategy ensures resilience and competitiveness amid evolving market demands.
AI: Opportunity or Threat?
The rise of artificial intelligence (AI) presents both opportunities and challenges for the Philippine BPO sector. Gupte noted, “There’s also the risk in terms of what AI will do to the industry and whether it will reduce jobs.” As automation accelerates, the industry must adapt by embracing roles that require human expertise, such as data analysis and creative problem-solving.
Banking Sector Resilience
The sustained economic growth has also benefited the Philippine banking sector, with net profits rising by 6.4% to ₱290 billion as of September 2023. Citi South Asia Corporate Banking Head K. Balasubramanian highlighted the sector’s strong financial profile, noting, “Philippine banks are well-capitalized to seize opportunities amid growth.”
Positive Outlook for 2025
With inflation under control and interest rates lowered to 5.75%, the Bangko Sentral ng Pilipinas (BSP) has room to continue easing monetary policy. S&P Global Ratings’ recent upgrade of the Philippines’ outlook from “stable” to “positive” further strengthens its position as a robust investment destination.
The growth forecast reflects optimism in the Philippines’ ability to navigate challenges, from AI’s rise to global economic shifts. For the BPO sector, moving up the value chain will be key to maintaining its role as a cornerstone of the country’s economic success.
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