IT-BPO Sector Resists Government’s Plan to Remove Benefits

Philippine’s IT-BPO sector outrightly expressed that they are against the government’s plan in removing their perks and incentives, stating that the move will not only threaten the competitiveness of the industry, but it will also disrupt the growth and development they have thus far.
IBPAP (IT-Business Process Association of the Philippines) beseeched the government and legislators to comprehensively take into consideration the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) bill in the economy with regards to how it would negatively affect the industry and result to possible layoffs, or worse, job losses.
As per the advocate group, they have nothing against the tax reform bill’s aim to raise the take home pay of the employees. But they deem that in making the tax reform bill, it is imperative to study and put into consideration how it will negatively affect the businesses and individuals as a whole.
IBPAP was appealing to the government to reflect on how the bill will impact the IT-BPM industry’s job creation negatively if they were to scrap sector’s incentive programs.
Supporting IBPAP’s stance, Lucena City-based business process outsourcing company, Coefficients Co. Ltd., keeps on giving employees competitive compensation and generous spiffs and incentives in order to boost its employees’ drive, which in turn will generate more sales and revenue.
With what the country has in place presently, IBPAP stated that there is persistent demand for their services which gives the industry the ability to compete in the global market.
“This is because the margin of difference is counterbalanced by the high quality service and talent the industry offers,” IBPAP said.
“However, should the tax reform bill remove the current incentives of the industry, this will increase the price differential further. This will impact our industry’s competitiveness in the global market, as well as the growth trajectories outlined in Roadmap 2022. More importantly, this will also impact job creation targets, including sectors who benefit from the 3.2 multiplier effect of the IT-BPM industry,” IBPAP added.
In October of last year, IBPAP formulated Roadmap 2022, an aggressive set of programs and initiatives that will boost the industry’s growth trajectory over the next six years.
As per the roadmap, the local IT-BPM sector aims to produce $38.9 billion revenue by the end of 2022 as compared to 2016’s $25 billion.
Due to revenue boost, the industry’s global market share will increase to 15.5% as compared to yesteryear’s 12.6%.
In addition, by the end of 2022, the IT-BPM industry is expecting to produce 1.8 million jobs, over 500,000 of which will be coming from outside the metro and 73% range from mid to high value.
IBPAP is also considering employing more post-graduates which will comprise 16% of the total jobs produced by 2022, as compared to last year’s 7%.
“Through the IT-BPM industry’s hub and spoke model to developing the sector and countryside, we have been contributing significantly to the growth of the middle class over the past decade. With the IT-BPM industry subsectors growing between nine to 13 percent over the next six years all over the country, we can continue helping the government with the inclusive growth and poverty eradication goals of the TRAIN Bill,” the group stated.
IBPAP added that “the magnitude of this growth will be highly dependent on maintaining the competitiveness of the Philippines as a major outsourcing destination and this can be done only by keeping the current incentives that the IT-BPM industry receives,”
Amidst the country’s political and socio-economic controversies, removing employees’ perks and benefits is not the smartest thing to do. If the government is to push through with the removal of benefits, high is the chance that the Philippines’ economy will tank.