TWO decades in and the IT and Business Process Management (IT-BPM) industry is sailing through new types of waves after overcoming the industry’s birthing pains in the early 2000s and the most recent one-the big wave that was the pandemic.
While it exited from the pandemic almost unscathed, industry pioneers, moving forward, have shared their views on what to keep an eye on after showing resiliency for the past two decades.
While the two founding leaders differed in perspectives, they agreed on one thing: Talent crunch is the ‘ongoing challenge’ for the industry, adding that the Filipino talent is at a critical juncture amid the rapid adoption of Artificial Intelligence (AI), a tool which can either be a friend or a foe, depending on how it’s utilized.
Early 2000s: birthing pains
MAPPING out the twenty-year journey of the Philippine IT-BPM industry, Rainerio ‘Bong’ Borja, Chief Operating Officer (COO) of Alorica Inc. and former IBPAP Chairman told the BusinessMirror in a virtual interview that the first challenge the industry encountered in the early 2000s was establishing the brand of the industry as it was just starting out.
Borja said: ‘When you’re starting a business even more so with an industry, you’re trying to establish a brand, a reputation. To attract possible clients and investors to do business with you, specifically because we were an unknown quantity at that point in time. So there was a lot of convincing.’
He said the industry pioneer companies banded together with a ‘common theme,’ which was to promote the Philippines. Borja said the industry’s trailblazers flocked to New York for the industry’s first international conference to promote the Philippine IT-BPM industry.
Borja described this phase of the industry as being positioned in a ‘restaurant strip,’ having people go there to see which restaurant to pick.
‘The first thing you should do is be convinced that the Philippines is the right location, that the Filipino talent is what would actually be able to deliver your business requirements from a customer care perspective, for example,’ Borja said, adding that these happened in the early 2000s, as some of the IT-BPM businesses were being simultaneously established in the country.
2005-2010: PHL overtakes India in Voice-Based Services
BORJA describes the years 2005 to 2010 as a game of scale, which means ‘trying to scale up to be a very strong competitor to India, because India was the powerhouse that time.’
During this phase, he said there was a ‘scramble’ for attracting top leadership talent that can manage to scale up, such as getting ‘first-class’ facilities to be able to hire people and accommodate them while trying to ‘live up’ to the established global standards.
It was also during these years that the Philippines overtook India to be the number one BPO country in the world for voice-based services, the industry pioneer said.
Upon dawning on India that the voice business is the Philippines’s turf, it had to pivot to more ‘non-voice work,’ Borja said, adding that this means leaning towards more back-office, IT type of work.
2005-2016: Tapping talent in the provinces
WHILE the Philippine IT-BPM industry discovered that its strength lies in voice-based services, Borja underscored that growth did carry challenges along the way.
For one, he noted: ‘There were areas where we were being called out because we were saturated in certain locations. And so that was also the reason why we spread out into the provinces.’
A similar recollection comes from another industry trailblazer, Danilo Sebastian Reyes, who also used to sit as the IBPAP Chairman. ‘Over the course of the last 20 years, the IT-BPM industry had several challenges throughout its evolution.’
Reyes added: ‘The challenge in the 1st trimester was the availability of Human Resources. The industry grew exponentially and there was not enough talent to fuel the hypersonic growth.’
Borja said in the early 2000s, the Philippines had a lot of ‘untapped graduates,’ adding, ‘We were graduating around half a million people every year and there [were] really not [many] white-collar jobs to speak of other than what was generated by the BPO industry.’
Describing this era as ‘growth pains,’ Borja said growth came with the need to ensure that ‘We were managing talent, that we don’t poach each other’s people, that we develop new talent as much as we could.’
These growth pains prompted the ‘ever-changing’ industry to keep up with the demands of its clients’ evolving needs in the area of business solutions.
‘You know, your clients are becoming more complex in the requirements, and we have to be able to adapt right?’ Borja emphasized, adding that Filipino workers’ skill levels have to increase year-on-year because ‘we’re tackling more complex transactions compared to before and with the advent of technology, you can see it now even with AI.’
In line with this, Reyes explained that in the second trimester of the industry’s 20-year revolution, new types of BPO services such as IT, Gaming, Healthcare, Animation, Finance and Accounting, among others, ‘sprouted that would require talents with new set of skills and competencies.’
Between 2005 and 2010, Borja cited an instance when the industry had a ‘medical transcription’ subsector which later on was displaced by technology because the said subsector required simple skills.
‘And so all these medical transcriptionists have to transition to become, eventually, medical coders which are high-end type work. And so they have to train and we have to retrain,’ added Borja.
The industry pioneer said the Philippine IT-BPM industry was able to evolve and adapt because the Filipino workforce is ‘very trainable.’
2020 onwards: The pandemic changes the work set-up
WHEN the world was jolted by the Covid-19, the IT-BPM industry found itself pushing to work from home.
‘Again, something very foreign and very new to the Philippines and to our workforce. You know, we have to scramble having logistics be able to deliver, you know, workstations, equipment, provide internet access to people working from home,’ Borja noted.
For his part, Reyes, the former IBPAP chairman, told this newspaper that he believes the Philippine IT-BPM industry sustained its growth in the last twenty years despite the pandemic.
‘It is only one of few industries that I know of that grew year-on-year even during the pandemic. Certainly, growth is no longer exponential in terms of jobs created but the quality of jobs have dramatically improved. Due to this, one job in the industry is now contributing twice the amount of revenue,’ added Reyes.
Artificial Intelligence: Friend or foe?
FOR the Philippine IT-BPM industry, Reyes pointed out that AI ‘has become and continues to be the centerpiece of the third trimester; the challenge for the industry is how to adapt and take advantage of AI to not only survive but continue to thrive.’
Borja, meanwhile, said: ‘The individual companies are doing their own bit to try to upskill their workforce, including in AI. We’re embracing it heavily as an industry. Our workforce is currently using it so they don’t see it as a threat. They see it as an aid.’
He is banking on the Filipino workforce to adapt even amid the rapid adoption of Artificial Intelligence, saying the younger generation had quickly kept pace with social media.
During his speech at the recent International IT-BPM Summit 2025, IBPAP President and CEO Jack Madrid underscored that this year’s theme, ‘Rewired for Value: The Global Wake-Up Call,’ is not a warning. Instead, he said, it is an ‘invitation.’
‘An invitation to sharpen our edge. To deepen our partnerships. To move with urgency in a world transforming all around us. And as I stand before you, I am reminded of one truth: what got us here will not get us to where we need to be,’ added Madrid.
Madrid said the headwinds to watch out for are the ‘next-generation agents, geopolitics, rising costs, shifting customer expectations.’
He added: ‘These are not just challenges for the Philippines. They are global realities. Our strength lies not in avoiding them, but in how we respond to them.’
Hence, Madrid said the local IT-BPM industry cannot afford complacency.
‘We cannot allow the ‘sunset industry’ narrative to take root. Because, we are growing faster than the global market,’ he also noted.
While the world continues to see the Philippine IT-BPM industry as a ‘trusted, indispensable’ partner, the head of the flagship organization of the industry said the challenge is not survival.
‘Our challenge is to remain indispensable by strengthening our value,’ Madrid said, adding that AI is not the apocalypse some fear, nor is it the silver bullet some promise.
‘It is a swing factor. It will reshape roles, yes. But the story is not replacement-it is augmentation. And for the Philippines, that is the opportunity: because what we bring-deep process knowledge, cultural empathy, and trusted human interaction-AI cannot replace,’ the IBPAP head said.
Today, Madrid said only 12 percent of Philippine firms report high AI maturity. Nearly half are experimenting but not scaling. Four in 10 are still in the early stages.
By 2028, more than 70 percent expect to reach high maturity.
‘The winners will not be those chasing demos. The winners will be those who rewire workflows with AI, with humans at the core-closing the skills gap in cloud, cybersecurity, and automation,’ Madrid underscored.
By 2026, the IT-BPM industry is projecting $42 billion in revenues and close to 2 million jobs.
In 2024, IBPAP said the industry hit the $38- billion revenue target while the industry added 120,000 new jobs last year, hitting its 1.82 million employees target last year.
Illustrating the evolution of skills within the Philippine IT-BPM industry, Borja noted that in early 2000s, the industry placed emphasis on raising the quality of Filipinos’ English communication skills.
The road leading up to 2025 saw that the demanded skillset has morphed into something more complex which requires the government, industry and academe to put in place a plan that would sustain and even level up what the Filipino talent can offer to the world.
‘What we’re advocating for now is training Filipinos to be very strong AI adopters,’ Borja said, adding: ‘So we can’t just get people who answer phones or change passwords. Those things have been automated. Now the questions are a lot more complex.’
The skillset required today, he said, should be aligned with making judgment calls, decision-making, ‘a lot’ of analytical thinking.
‘I remember early on in 2000s, the concern was the quality of English of Filipinos, so we were putting a lot of emphasis on training and upskilling, focusing on their English skills or their English communication skills. And then that changed into, you know, more training and upskilling, not only in English skills, but in comprehension, in analytical thinking, right? And then it evolved and now focusing on having our workforce be AI adopters,’ the industry pioneer noted.
In the 20-year timeframe, Reyes said the industry has been able ‘to elevate ourselves from merely serving those around the table to earning our own seat in the table.’
‘From the early days of the industry wherein voice services was the predominant factor, for growth, to now being able to partner with clients in addressing business problems and creating innovative ways of business processing, the industry has evolved by leaps and bounds,’ added the industry pioneer.
Madrid said the IT-BPM industry’s core remains strong: banking and financial services, healthcare, and global leadership in customer experience.
Today, he said the industry contributes over 8 percent of the gross domestic product (GDP).
‘The Philippine IT-BPM industry is too big to fail. But just as important, it is too important not to evolve,’ the IBPAP President emphasized.