ICT Academy should be established now
The lack of jobs forced our labor to migrate, and our economy largely relied on the remittances of the service-sector exports.
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The lack of jobs forced our labor to migrate, and our economy largely relied on the remittances of the service-sector exports.
There's a bill in the House of Representatives that has passed the third reading and should be given priority by the Senate — the e-Governance Bill or House Bill 7327. It's a bill that seeks to institutionalize the transition of the government to e-governance in the digital age.
What I specifically like about this bill is the provision for establishing the ICT Academy. We must pay particular attention to the growth of a highly competitive modern service sector that has become a significant pillar in our economy — the Philippine outsourcing industry.
The ICT-heavy outsourcing industry is a labor-intensive sector that may be a silver lining in the country's goal to achieve industrialization and reduce income inequality.
One of the country's primary sources of socio-economic inequality is the poor manufacturing growth in the 1970s and 1980s. Our economy should have shifted from agriculture to manufacturing of tradeable goods as a classical path to modern economic growth. The lack of jobs forced our labor to migrate, and our economy largely relied on the remittances of the service-sector exports.
Instead of manufacturing jobs, our labor shifts from subsistence agriculture to the subsistence service sector coupled with urban migration. This shift came with a high social cost, too — family members being separated from each other. Most of the exports are low-skilled.
Industrialization and the reduction of inequality remained elusive, too. Our Gross Domestic Product per capita in 2022 is the 4th lowest in ASEAN, outranking only Laos, Cambodia, and Myanmar. The Philippines also has the highest GINI coefficient (the higher the number, the higher the income inequality) among the six largest economies in ASEAN at 41.58 percent (Malaysia-39.37 percent Indonesia-38.33 percent, Vietnam-35.58 percent, Singapore-35.58 percent, and Thailand's-34.55 percent). Currently, 57 percent of our population is considered poor.
A directive under the 1987 Constitution is for the legislature to prioritize measures to reduce socioeconomic inequality by equitably diffusing wealth for the common good. Indeed, social justice is one of the core values of our Constitution. This is why it commands Congress to give the highest priority to measures that will reduce income inequality. After all, growth should be inclusive and sustainable.
The ICT sector presents us with the path to shifting the subsistence service sector to a modern high-paying services export industry without Filipinos leaving their families.
The signs are right in front of us. According to the statistics of the IT and Business Process Association of the Philippines, the country's information technology and business process management, or IT-BPM sector, has been growing in revenue by more than 11 percent over the past ten years. From a revenue of US$15.8 Billion in 2013, it is estimated that total revenues will reach US$35.9 Billion in 2023.
IBPAP data also reports that IT-BPM full-time employees have steadily grown from 860,000 workers in 2013 to an estimated 1,700,000 at the end of 2023. IBPAP expects the BPO industry to contribute over US$59 billion in revenue, accounting for 8 percent of the country's GDP, and provide an additional one million jobs before the end of 2028.
The growth in the jobs in the IT-BPM sector is felt outside Metro Manila. IBPAP reports that job expansion and growth were mainly felt in Pampanga, Laguna, Davao, Bacolod and Cebu. Over 70,000 (or 58 percent) of the 121,000 new jobs in 2022 were in the countryside.
Indeed, we must sustain this growth in outsourcing and prepare our workers for its evolution. What started in the late 90s from simple call-center services is now moving into back-office support operations for foreign-based firms, accounting, and big data analysis -from simple business process outsourcing to knowledge process outsourcing.
Consequently, it is projected that high-skill services for workers that involve creativity, ingenuity, and uniquely human understanding will be in greater demand. If the Philippines wants to get ahead and stay ahead with other outsourcing providers worldwide, our workers need to be constantly trained with new technologies. This is what the ICT Academy is for.
The exponential growth of the IT-BPM sector, its immense role in our economy today, its potential to reduce socio-economic inequality by spreading job opportunities and income in the countryside, and its ability to strengthen the middle class and reduce dependence on the migration of workers, are enough reasons why we should highly prioritize measures such as HB 7327- to keep our services sector with high trade value and at pace with the global market.
We need the ICT Academy now.
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