This paper provides a profile of the Philippine business process outsourcing
(BPO) sector; makes country comparisons with India and other BPO providers;
and summarizes the results of an input–output analysis of the Philippine BPO
industry’s intersectoral linkages and its potential impact on compensation and
employment. The Philippine BPO sector’s growth is largely driven by the contact
center subsector due to its large share in total BPO employment and revenues,
as well as by government support. The input–output linkage analysis shows that
the BPO industry is not a key sector in terms of stimulating production in other
sectors of the Philippine economy. However, growth in the sector’s revenues can
have a significant impact on compensation and employment. An increase in the
sector’s revenues will generate a considerable increase in the sector’s total wage
bill and in that of the other sectors. If appropriate policies are enacted and with
improvements in human capital, it is estimated that the Philippine BPO sector
may become an important employment-generating sector. The sector can provide
7–11% of the new jobs for the labor force entrants between 2007 and 2010. It is
also estimated that the BPO total workforce size will reach 500,000 to 600,000
in 2010, which is considerable for a single economic activity.