In its latest balance of payments outlook, the BSP projects that BPO export revenues will grow at a reduced pace of 5 percent annually in 2025 and 2026, down from 6 percent in 2024 and 7.7 percent in 2023.
This represents total expected revenues for the industry of $33.5 billion for this year and $35.2 billion for next year.
While the industry remains a major source of foreign exchange, the central bank warned that global job “reshoring” efforts and a domestic shortage of skilled workers in generative AI and data analytics could weigh on the sector’s competitiveness.
These constraints "may hamper industry efforts to climb up the value chain and maintain competitiveness,” the BSP noted in its March 24 report.
The BPO industry has long been a cornerstone of the Philippine services sector, contributing over $30 billion annually in export revenues. However, the rise of automation and AI is pushing global clients to reassess outsourcing strategies, while the Philippines grapples with building a workforce equipped for higher-value digital services.
The BSP’s cautionary tone comes amid a broader slowdown in the country’s external sector outlook, with total services exports also expected to grow more modestly at 8 percent per year in the same period.
The central bank urged continued investment in workforce development to ensure the sector can adapt to evolving technological demands and sustain its growth trajectory.
— Edited by Daxim L. Lucas
