BPO boom powers Philippines’ 6.3% growth amid trade risks, AMRO says
MANILA, PHILIPPINES — The Philippines’ economy is poised to grow 6.3% in 2025, the second-fastest in the ASEAN+3 region, fueled by its thriving business process outsourcing (BPO) sector and resilient services industry.
Despite looming United States tariff threats, the country’s $38 billion outsourcing industry and stable inflation provide a buffer against global trade shocks, as the ASEAN+3 Macroeconomic Research Office (AMRO) reported.
BPO sector emerges as economic lifeline
The Philippines’ BPO industry, employing 1.8 million workers, delivered 7% revenue growth in 2023, nearly double the pace of goods exports.
AMRO highlights the sector as a key growth driver, contributing significantly to the services sector’s 62% share of national employment in February. With projected 3.3% inflation and strong domestic demand, BPO firms continue to offset weaker merchandise trade performance.
However, experts warn that overreliance on BPO revenues poses risks if geopolitical tensions disrupt global outsourcing flows.
“We must diversify as much as possible, move in terms of markets, but also move to new industries. If shifts in global trade are a permanent shock, others might not survive,” said Hoe Ee Khor, AMRO’s chief economist.
The sector’s expansion remains critical as remittances and foreign investments face pressure from potential shifts in U.S. trade policy.
Infrastructure push needed to sustain momentum
While the BPO boom cushions short-term risks, AMRO urges accelerated infrastructure and human-capital investments to unlock long-term growth.
Projects lagging in fast-track infrastructure, manufacturing, and upskilling could cap GDP expansion slightly below 6% if Trump-era tariffs return.
The government aims to lift growth to 5% by 2040 from 3.2% by modernizing agriculture and tech-enabled services.
AMRO cites 1.8% inflation in March, the lowest since the pandemic era, as proof of effective monetary policy but stresses that physical and digital infrastructure gaps must close to compete with Vietnam’s 6.5% growth and Cambodia’s 5.8% growth.
