October 23, 2013

BPO revenues seen to overtake remittances

Revenues generated by the country’s business process outsourcing (BPO) industry is seen to overtake in five years the remittances from Filipinos abroad, according to estimates by the former socioeconomic planning secretary Felipe Medalla.

According to an interaksyon.com report, Mr. Medalla believes that this trend will likely happen given the double-digit revenue growth posted by the BPO industry vs. the estimated 5% annual average growth in remittances.

Our take: The BPO industry is looking to grow its total revenues to around US$20b next year compared to the current US$24b in annual remittances by overseas Filipinos. This should continue to support employment, consumer spending, and demand of BPO office space and housing.

In this light, we continue to be optimistic on the prospects for consumer companies like URC, PGOLD and JFC as well as diversified property companies and conglomerate which have growing presence in BPO office development like ALI, SM, MEG, RLC and FLI. – Ricardo Puig