Outsourcing firms will within the decade surpass remittances sent home by migrant workers as the Philippines' main source of dollar income, giving the domestic economy another boost.
The Bangko Sentral ng Pilipinas (BSP) said it was only a matter of time before the business process outsourcing (BPO) industry, which has been booming for more than a decade, would replace cash transfers as the economy’s main economic engine.
Money received by millions of Filipino families from their relatives working overseas would continue to grow at a steady but subdued pace this year, BSP Deputy Governor Diwa C. Guinigundo said.
The BPO sector’s outlook, however, is much brighter. “BPO revenues are expected to grow by at least 15 percent,” Guinigundo said, citing industry data. Remittances from overseas Filipino workers (OFW), meanwhile, would grow by 6 percent, at most, in 2015.
Remittances from OFWs were the biggest source of dollar income for the country last year, helping keep the peso stable despite volatile financial market conditions. In 2014, money sent home by the country’s 10 million migrant workers reached a record-high $24 billion, accounting for nearly a tenth of gross domestic output.
Income from BPOs, which employ more than a million Filipinos, reached $18.4 billion, up 18.4 percent year-on-year. The IT and Business Process Association of the Philippines (IBPAP) said it expected the industry’s earnings to rise by 15 to 17 percent in 2015.
By 2016, BPOs would earn $25 billion annually, industry estimates showed.
Even with the shift, Guinigundo said remittances would stay as a vital pillar for the domestic economy. He said demand for OFWs remained high. “If other countries had substitutes for Filipino labor, we can get worried. But there aren’t any,” Guinigundo said.
Cash remittances from overseas Filipino workers (OFWs) coursed through banks increased by 11.3 percent year-on-year to $2.1 billion in March 2015, latest data from the central bank showed.
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