BPAP, TESDA, beef up talent pool with P500 million budget

(Manila, Philippines, October 21, 2011) – The Philippines’ IT-BPO industry got a major boost with President Benigno Aquino’s approval of a P500-million training fund to be administered by the Technical Education and Skills Development Authority (TESDA), according to industry executives and the consultant who led the development of the Philippines IT-BPO Road Map 2011-2016. The funding will provide short-term training for “near-hire” applicants who require remedial training.

“Ensuring a qualified labor supply is the number one task for the industry,” said Everest Group managing consultant for India Gaurav Gupta. The funding approved by the President will provide remedial training for the voice, software development, animation, game development, and health care services sectors. Aquino announced his approval of the special training fund during the 3rd International Outsourcing Summit (IOS).

Following the Summit, the Business Processing Association of the Philippines (BPAP) and TESDA signed a Memorandum of Agreement (MOA) to initiate the P500 million expansion of the IT-BPO Industry-Based Training for Work Scholarship Program (I-TWSP), which has already proven to be successful in helping industry applicants quickly acquire the skills required to qualify for high-paying jobs.

BPAP and its partner associations are targeting 65,000 near hires for the program and have committed to an employment rate of at least 70 percent within six months after completing remedial training.

The Philippines, considered the “rock” of global IT-BPO after analysts ranked it first in global voice services last year, shows great potential to become the next leader in the growing non-voice, complex services sector, according to summit delegates. The IOS is considered by many to be an indicator of the country’s success. The annual event attracted hundreds of the world’s top IT-BPO executives to network and deliberate on the future of the industry.

“The Filipino knowledge worker is already internationally recognized as world-class, and we are now universally recognized as number one in the world in voice services. Our big opportunity is leveraging this success to become the number one destination for IT-BPO in general, especially in important segments of non-voice services such as finance, accounting, legal, health care, creative, engineering, and targeted IT areas,” said Fred Ayala, Chairman of BPAP.

According to Ayala, global demand for high-quality Filipino talent could increase industry revenues from $9 billion in 2010 to $25 billion in 2016, and total industry generated jobs from 1.8 million in 2010 to 4.5 million in 2016; of those, 30% are direct jobs in the industry, and 70% in indirect jobs that support the industry.

“The administration’s strong support in helping the industry address the quantity and quality of our talent  supply is very much appreciated by BPAP and its members. The funding will have a dramatic impact not just on the industry but the Filipino people as well as it will generate tens of thousands of jobs,” he said.

Over 400 delegates and speakers attended the summit and Aquino’s keynote address. Delegates remarked that the high number of international delegates demonstrated the Philippines’ dominant position in the industry, and its influence on the development of global IT-BPO. The summit was organized around discussions on emerging markets, increasing sophistication of the industry, and addressing HR requirements.

Other discussions focused on growth and development potential and new sources of revenue generated by increased levels of fundamental innovation or research and development taken on by services providers. Panelists and delegates alike seemed to agree that non-voice, complex services will be the primary engine of growth for the industry, and the skill sets required to fill these jobs are increasingly sophisticated.

“The Summit’s role is to bring together industry players around the world, share our expertise to assist other global IT-BPO centers, and keep us on track to meet our goals,” BPAP senior executive director Gigi Virata said.

“It was a very interesting Summit. There were very consistent messages across the board—messages that deal with value, with the challenge of talent supply, messages regarding collaboration between clients and providers,” EXL Global Head of Client Management and Chief Strategy Officer Rembert de Villa said.

“This year’s summit provided a very nice mix of end customers and services providers—a very healthy mix. Various countries were well-represented; there were delegates and speakers not only from the Philippines, India, and the US, but also IT-BPO leaders from China, Colombia, Russia and Jordan among others. This clearly demonstrates that the Philippines has become a very credible BPO destination for the world to take note of,” Aegis Global Managing Director and Global CEO Aparup Sengupta said.

“BPAP has done a great job of bringing together people from all over the world, not just the industry here in the Philippines, to compare notes with and really get at the substance of some of the issues and that breath of dialogue is refreshing,” Yahoo! Executive Vice President and Chief Customer Officer Jeff Russakow said.

“The Summit ended on a high note with President Aquino’s good news. We hope to have the same level of success at the next summit and bring in more support for our industry partners as well,” BPAP executive director for Industry Affairs Raymond Lacdao said.