This was a primer on the IT-BPO industry as presented to the AmCham ICT Committee by Alejandro "Bud" Melchor III, Deputy Executive Director for ICT Industry Development, Department of Science and Technology, ICT Office (DOST-ICTO) on March 27, 2012

1. IT-BPO Situationer
and the DOST-ICTO’s
ICT Industry Development Programs
AmCham ICT Committee Meeting
March 27, 2012
Alejandro P. Melchor III
Deputy Executive Director for ICT Industry Development
Department of Science & Technology
Information & Communication Technology Office

2. Philippines has pulled away from the pack and established itself
as the clear global #2 after India in worldwide IT-BPO
SSource: Aon Hewitt

3. Philippines has become the destination of choice.
The world’s top locators are on hyper-growth mode.
IBM’s Global Location Trends
Annual Report 2010 stated that
Philippines surpassed India in
2010 as world’s #1 location for But talent supply is the constraint to growth
business support services
(IT-BPO, shared services, RHQ)

4. PARADIGM SHIFT: LOCATORS ARE LOOKING AT TIER 2 &
3 CITIES. IN INDIA, 80% OF IT-BPO GROWTH IS TIER 2 & 3
Source: Tholons

5. The Stars are Aligned…
• …to dramatically increase PH market share in
IT-BPO…
• …to attain world leadership in multiple high-
growth segments of Global IT-BPO
• …to accelerate countryside development
• …to decisively propel the country to global
competitiveness in the Knowledge Economy
INFORMATION & COMMUNICATIONS TECHNOLOGY OFFICE

6. ICT Industry Development Programs
Talent Development
Designed to
iPPP- Stepping-Up the Value Chain
enable the
ICT Industry
Public to generate
Private Next Wave Cities
US $50B in
direct
Partnership revenues by
for ICT; Domestic ICT Industry 2016
Development
Joint 5-year • IT-BPO $33B
ICT-Enabled Creative Industries • All other ICT
Investment Development $17B
program
ICT Marketing & Research

7. $33B target for PH IT-BPO is based on a high-growth scenario
featuring 20% CAGR and vigorous iPPP growth initiatives*
Year Export Revenues
(20% CAGR)
2011 $11.0 B
2012 13.2
2013 15.8
2014 19.0
2015 22.8
2016 27.4
Domestic
outsourcing 2016
5.6
Total: $ 33B
• The high-growth scenario: PH IT-BPO export revenue reaches US $55B level by
2020, fueled by a 20% compound annual growth rate (CAGR).
• PH increases market share substantially in several high-value niches.
• Domestic market and domestic outsourcing substantially larger.
• Supply of skilled labor and revenue earnings per employee grow at high rate.
• PH investment climate will be especially positive.
• Substantive progress in public-private partnership initiatives to spur industry growth.
*ICT-BPO Industry Growth, Transformation and Impact: Opportunities and Challenges for the Philippines-
forthcoming book by Raja Mitra, Senior Consultant World Bank and ADB. Quoted with the author’s permission.

8. ICT Workforce Capability Development Program
National e-
Competency
Framework
Aims to augment
Global
National ICT Competitiveness
efforts of CHED and
Skills Registry Assessment TESDA and support
Database
Globally-
Tool (GCAT) BPAP’s programs in
competitive order to triple the size
Filipino ICT of ICT Talent Pool by
Workforce 2016, improve
employability by
IT Professional Industry Driven
Certification Curriculum 200%, and develop
the Core Skills
required by Industry
One e-Learning
Portal

9. Stepping up the Value Chain Program
We are #1 in call
centers and we
Voice BPO
intend to become
market leader in
UK & Australia
1. Healthcare Information
Management Outsourcing
We intend to 2. Finance & Accounting
attain world Outsourcing
leadership in 4 more 3. HR Outsourcing
fast growing services 4. Creative Process
Outsourcing
We intend to 1. Information Technology
Outsourcing (ITO)
double our market 2. Engineering Services
share in 3 other fast Outsourcing (ESO)
growing services 3. Multilingual BPO

10. We aim to harness Philippine competitive advantages to attain world leadership in
four more fast growing services and double our market share in 3 others

11. PH Healthcare Outsourcing segment grew by 172% in 2011… 11
we can be global leader in this est. $65B opportunity
$590B administration cost gives
rise to a $30.5B est. offshoring
target from US healthcare
legislation alone…
The Philippines has a competitive
advantage to dominate this
offshoring opportunity, with its large
talent pool of certified nurses
Source: Healthcare Information
Management Association
of the Philippines (HIMOAP)
The global opportunity is
much larger, what with at
least 6 other geographies
having similar healthcare
legislation…and more
coming!

12. 12
Philippines has competitive advantages to increase market
share in IT Outsourcing, Engineering Services Outsourcing
Filipino IT professionals are
becoming a global brand;
actively recruited by other
countries
Philippines has 3rd largest pool
of engineers in Asia Pacific
after China and India

13. Next Wave Cities™
Dynamic NWC Road Map
countryside
development
through ICT
• Significantly
increase the
Career Marketing/
jobs and International
Talent
revenues Marketing Development
generated by
NWCs
• Increase from
3 to 8 Centers
of Excellence
by 2016
• Increase from
5 to 10 NWCs
in Global Top Technology
100 by 2016 Business
Incubators
TELOF
Transformation

14. Next Wave Cities Location Assessment Model

15. Philippine ICT Industry
Development Program
Aims to develop a 10-Year Road Map, Industry
Mapping and Growth Programs for the:
- IT-BPO Industry
- Computer Hardware Industry
- Software and Applications Development Industry
- ICT-enabled Creative Industries
- Semiconductors & Electronics
- Telecommunications

16. ICT-Enabled Creative Industries Program will
propel PH past Korea and China by 2016
PORTFOLIO (IP/Content) & the Philippine Brand
Exhibits,Fairs,
IP Awareness Legislation support*
Trade Missions
Entrepreneurship Strategic Programs Collaterals
Roadmap & Industry
Creative Skills Policies Mapping
Talent Building Enabling Marketing &
Environment Research
Animation, Games, Comics, etc.
THE INCUBATION LAB

17. Marketing & Research Program
-Career Opportunities Marketing
-International Marketing & Geo Footprint expansion
-Market Intelligence
-Technology Foresight