BPO sector drives Philippine economic growth in 2025: Citi

MANILA, PHILIPPINES — The Philippine economy is projected to expand by 6% in 2025, driven by the continued strength of the business process outsourcing (BPO) sector, according to Citigroup, Inc. (Citi). This growth forecast aligns with the lower end of the government’s target range of 6-8%.
“We expect the growth in 2025 to stay within the 6% handle,” Citi Asia South Head Amol Gupte said during an online briefing.
BPO industry boosts jobs and revenue
The BPO sector remains a critical driver of economic growth, contributing $38 billion in export revenue and employing 1.82 million full-time workers in 2024.
Under the Philippine IT-BPM Industry Roadmap, the sector aims to reach $59 billion in revenue and employ 2.5 million people by 2028.
“The Philippines will continue to benefit from [the BPO industry] and will create a lot of jobs,” Gupte noted. He emphasized the need for the sector to move up the value chain by transitioning from voice-based roles to middle-office jobs, ensuring long-term competitiveness.
AI emerges as a potential challenge
While the BPO industry shows promise, advancements in artificial intelligence (AI) pose risks to job creation.
“There’s also the risk to that in terms of what AI will do to that industry and whether that will reduce jobs,” Gupte warned.
Banking sector remains strong amid growth
The robust economic outlook also supports the Philippine banking sector. Citi South Asia Corporate Banking Head K Balasubramanian highlighted that local banks are well-capitalized and positioned for profitability.
As of September 2023, net profits in the banking system grew by 6.4% to PHP290 billion (US$4.96 billion), supported by higher interest and non-interest income.
Additionally, S&P Global Ratings recently upgraded the Philippines’ credit rating outlook to “positive,” reflecting strong growth potential and improved institutional strength.
Monetary policy eases to support expansion
The Bangko Sentral ng Pilipinas has reduced benchmark borrowing costs by 75 basis points since August, bringing rates down to 5.75%. With inflation under control, further rate cuts may follow, potentially fueling additional economic activity.
As the Philippines navigates global challenges such as AI and fluctuating interest rates, both the BPO sector and banking industry are expected to remain pivotal contributors to sustained economic growth.