President Rodrigo Roa Duterte salutes the colors with Defense Secretary Delfin Lorenzana at the 69th Anniversary of the Philippine Air Force at Air Force City in Clark Field, Pampanga. (MNS photo)
MANILA (Mabuhay) — The business process outsourcing (BPO) sector continues to be a major growth driver of Philippine economy, but the economic managers of the Duterte administration are not keen on relying too much on the sector as technological advancements may lead to a decline in its contribution to the gross domestic product (GDP).
“Secretary Dominguez is raising concerns on BPO. We should not be too reliant on BPO. It might change in the future,” newly-appointed Budget and Management Secretary Benjamin Diokno told reporters in a briefing in Pasay City.
Finance Secretary Carlos “Sonny” Dominguez III said the country has to prepare and make sure that the economy will not be affected in case the demand for manpower will no longer be as robust as it is now.
Although this may not be in the immediate future, manpower may be taken over by artificial intelligence, the Cabinet official noted.
President Rodrigo Roa Duterte addresses Philippine Air Force 69th anniversary celebration at Haribon Hangar, Clark Air Base in Pampanga. (MNS photo)
“We just want to make sure we are prepared if there are any breakthrough developments in new technology for artificial intelligence,” Dominguez said.
Data from the Philippine Statistics Authority (PSA) showed the services sector, which includes BPO, was the main driver for the first quarter gross domestic product (GDP). Services accelerate by 7.9 percent in January to March from 5.5 percent year-on-year.
“The strength of both the industry and services sector once again shows the ongoing structural transformation taking place in our economy, which is crucial for sustaining economic growth and generating quality jobs,” then-Socioeconomic Planning Secretary Emmanuel Esguerra said.
In 2015, the services sector contributed 4.1 percentage points to the total GDP growth of 5.8 percent.
The revenue of BPO firms are expected to surpass the remittances of overseas Filipinos in 2017, according to the Hongkong and Shanghai Banking Corp. (HSBC)
“In terms of BPO receipts overtaking remittances, we think most likely over the next two years,” HSBC economist Joseph Incalcaterra said last year.
This was mirrored by Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo who noted that while technological advancements may happen in the future, the sector will still continue to be a main driver of economic growth.
“The BPO organization projects growth of 15 to 20 percent in the next five years. We expect it to be an important driver of growth,” he said.
He noted, however, that “we need to monitor developments in artificial intelligence.” (MNS)