IBPAP counting on global capability centers to bolster Philippines’ position as IT-BPM hub

By Beatriz Marie D. Cruz, Senior Reporter

THE IT and Business Process Association of the Philippines (IBPAP) is banking on global capability centers (GCCs) to defend the country’s market share in the global information technology-business process management (IT-BPM) sector and drive growth in higher-value services.

“I think we are a world leader in IT-BPM, along with India. We just need to protect our existing market share and hopefully grow it towards the higher-value spectrum of jobs,” IBPAP President and Chief Executive Officer Jonathan “Jack” R. Madrid said in an interview aired on Money Talks with Cathy Yang on One News on Wednesday.

GCCs are wholly owned offshore operations established by multinational companies in markets such as the Philippines, where they transfer certain business functions previously handled at their headquarters. These perform business functions for their parent companies, including IT, finance and human resources.

Mr. Madrid said the Philippines is the second-largest market for GCCs after India.

“I think the growth in GCCs is continuous,” he said. “The Philippines is a solid No. 2 and is the natural alternative to these multinationals because of our strength in IT-BPM.”

The Philippines is well-positioned to attract GCCs across sectors like banking, financial services, insurance, and healthcare, Mr. Madrid said. The country hosts about 200 GCCs.

While the country remains a premier IT-BPM destination, he noted competition is intensifying due to emerging hubs like Egypt, South Africa, Poland, and Colombia.

The IBPAP recently lowered its revenue and employment targets for 2028 amid intensifying global competition and the growing adoption of artificial intelligence (AI), which is displacing some manual roles.

Under the IBPAP roadmap’s downside scenario, the IT-BPM industry could reach $43.3 billion in revenues and 1.85 million in AI-enabled workers by 2028.

Meanwhile, the industry is expected to generate $50.5 billion in revenues and boost its headcount to 2.14 million by 2028 under a best-case scenario.

These new figures were a downgrade from IBPAP’s earlier forecast, which projected $59 billion in revenues and a workforce of 2.5 million full-time employees (FTE) by 2028.

Mr. Madrid said the recalibrated targets do not mean there is a decline in competitiveness of the Philippine IT-BPM industry.

“The more tempered forecast is a result of macroeconomic factors. Locators have not stopped, but maybe they are taking longer to decide on offshoring services to India and the Philippines,” he said.

“It has nothing to do with the competitiveness of the Philippines or any other constraints,” Mr. Madrid added.

Meanwhile, he said the bright outlook for the Philippines’ exports of semiconductors and electronic goods could convince foreign companies to locate their higher-value services in the country.

“While there is maybe no direct connection, I think we can take advantage of the stronger electronics growth rate and maybe convince those multinationals to consider some services — whether it’s in analytics, logistics, cybersecurity, or finance — to be delivered in the Philippines on top of the assembly and design of chips,” Mr. Madrid said.

The country’s semiconductor and electronic exports are projected to reach $54 billion this year from $49.64 billion in 2025, driven by the growing demand for tech components needed to power data centers and AI models, according to the Semiconductor and Electronics Industries in the Philippines Foundation, Inc.

The Philippines is looking to move up the electronics value chain beyond basic assembly to lessen its reliance on traditional service exports like IT-BPM amid global uncertainties.

Despite external headwinds and intensified competition, the Philippines remains a preferred destination for outsourcing activity, Mr. Madrid said.

“I think global customers still want a Filipino digital worker or agent to solve their issues,” he noted.

For 2026, IT-BPM revenues are projected to reach $42.3 billion from $40 billion in 2025. The industry’s total headcount is expected to rise to 1.96 million FTEs from 1.9 million last year.

IBPAP also expects industry revenues to grow to $45.3 billion in revenues in 2027, with FTEs projected to reach 1.99 million.