Navigating the Shifting Trade Landscape: How Philippine Service Exporters Can Stay Resilient
Ever wonder how the economic tides across the globe ripple all the way back to the Philippines? Well, recent data from the Bangko Sentral ng Pilipinas, cited by the Philippine Institute for Development Studies, offers an interesting peek.
Here’s the lowdown – While exports did see a healthy 7.5% rise to $51.98 billion in 2024, the overall services trade actually slumped by 19.8%, dropping to $14.58 billion. The reason? Imports surged far quicker, jumping 24% to $37.4 billion, overshadowing the export growth.
It’s a reminder that the global playground is constantly shifting. Those international ups and downs, from trade policies to market demands, can definitely impact the economic momentum. So, how do we keep our vital export sectors strong and resilient?
Letโs decode the current international scenario, with a particular focus on one of the key geographies outsourcing to the Philippines, namely the USA. Additionally, letโs examine how the Philippine BPO segments are poised for growth and what factors contribute to building a successful BPO business.
The Current Affair: Decoding the Existing Scenario
The global economic influence of the United States has a ripple effect on other economies, including that of the Philippines. Notably, the USA is a major client for the Southeast Asian country, and changes in its economic landscape could impact the Philippine BPO industry.
The stock market performance is usually a sentiment indicator, which depends on several factors, including tariffs and trade policies. The US stocks reported heavy losses after the new tariff announcements on trade partners, which were subsequently paused temporarily for most countries, except in the case of Chinese partners.
However, subsequently, the USA and China hit the pause button, and their trade war entered the de-escalation stage. This brought cheer to the stock market, where some major indices soared. Yet, the inherent unpredictability of global trade meant uncertainties remained. For instance, a more recent hint at tariffs on the European Union again prompted a fall in US stocks, illustrating the ongoing volatility.
Beyond trade policies, other domestic US economic indicators also warrant attention. The downsizing of federal employees has contributed to rising job losses. Furthermore, a reported 0.9% dip in retail sales, as noted by NBC Washington, may signal a decline in consumer confidence and a broader economic slowdown.
Given these rapid and interconnected shifts in the international economic landscape, only time will fully unfold their long-term impact on market dynamics and trade policies.
The Industry Landscape: Understanding Where the Philippine Industries Are Headed
Understanding how the various sectors in the Philippine industry are likely to grow can provide insight into existing and potential business opportunities. Letโs take a closer look at some of the key sectors:
Healthcare BPO
Apart from being service providers, the Philippine HIMS (Healthcare Information Management Services)-BPO companies also partner in healthcare innovation. They offer competencies across revenue cycle management, pharmaceutical and life sciences, healthcare IT, and clinical support services.
Covering 400-plus diverse companies, the HIMS industry is expected to grow at a 9% CAGR between 2022-2028.
Professional Services
The professional services BPO industry supports specialized tasks across legal, HR, and other professional functions. Talking about the legal BPO market, Grand View Research expects a 35.7% CAGR for the Philippines legal process outsourcing market from 2024 to 2030.
In another report, Grand View Research estimated the Southeast Asia human resource BPO market size at USD 3.86 billion in 2024, and further anticipates a CAGR of 13.4% from 2025 to 2030. Notably, the Philippines dominated the market with a share of over 24% in 2024, indicating its leading position in the industry.
IT-BPM
According to the Philippine News Agency, the IT-BPM (Information Technology and Business Process Management) industry targets to achieve a revenue of USD 59 billion and 2.5 million full-time employees by 2028.
Notably, the news report also stated that the Information Technology and Business Process Association of the Philippines (IBPAP) strives to expand high-skill category jobs, with a 13% increase in revenue per full-time employee by the said period.
Creative Solutions
The creative outsourcing sector is likely to grow at a CAGR of 15% through 2028. Some of the in-demand creative services include animation and motion graphics, game development, and interactive design.
The Philippines is known to provide 2D and 3D animations, programming, quality assurance, and UI/UX support through its creative outsourcing solutions.
The Power of Acting Now: Preparing to Navigate through Uncertainties
Uncertainties are an inherent part of the international trade landscape. However, businesses can prepare themselves by proactively adopting agile strategies and adapting to new developments.
Building a Diversified Client Base
America is a key contributor to the BPO services revenue, indicating concentration risk. Changes in economic factors like rising tariffs may cause American companies to reconsider offshore BPO if transacting with tariff-impacted geographies becomes expensive.
For instance, increased hardware and software costs typically lead to higher operational costs for BPOs. Thus, USA companies may explore in-house BPO operations over outsourcing.
Likewise, higher costs of cross-border transactions can increase operating expenses, compelling investments in AI-powered platforms to reduce dependency on high-tariff regions.
Thus, Filipino businesses should look at expanding their client reach across geographies to mitigate concentration risk. How?
Leveraging geospatial position is also crucial for diversifying business exposure. By positioning a manageable time zone overlap, similar linguistic and cultural backgrounds, and a skilled workforce as advantageous to businesses, the Philippines can explore Australia and other nearby geographies.
In fact, as per Matchboard, an Australian business platform, the Philippines is the preferred outsourcing location in the first half of 2025 for Australian companies, primarily due to a talented workforce, particularly in customer service, digital, and IT, and wide vendor options.
Evolving with Artificial Intelligence
AI is rapidly redefining the business landscape, making continuous upskilling the cornerstone of success. Businesses must, therefore, prioritize and optimize their budgets to maximize investment in workforce development.
Interestingly, the Department of Trade and Industry is fueling the digital revolution through various initiatives, striving to build a future-ready talent pool and competitiveness of Filipino businesses locally as well as globally.
Additionally, IBPAPโs roadmap for 2028 aims to integrate AI to enhance service delivery and address Gen AI-related challenges, while exploring the opportunities it presents.
Facilitating Operational Ease
Operational ease not only streamlines business processes but also saves time to focus on other important functions. Leveraging a payment platform that enables multi-currency transactions can open a gateway of opportunities in new markets.
Payoneer’s payment platform offers support in 17 languages and facilitates transactions in 70 currencies across more than 190 countries and territories. This, in turn, helps streamline payments to suppliers, contractors, and service providers across multiple countries and facilitates the receipt of multi-currency payments. The platform not only simplifies cross-border transactions but also reduces currency conversion fees.
All in all, businesses should explore a reliable financial platform that supports international trade and creates seamless experiences for themselves, their clients, and partners.
Key Takeaways
International shifts are unpredictable and can cause business repercussions. However, businesses can confidently navigate such uncertainties by exploring different markets and embracing technology.
This helps businesses reduce their dependency on a single geography and evolve in line with changing technology. In this way, businesses can shield themselves from sudden changes in trade laws and tech practices. Considering how the B2B world is evolving, service providers and digital commerce industries should prioritize leveraging technology to streamline their operations and create a seamless transactional experience for themselves and their clients, thereby expanding their global footprint in the digital economy. Cross-border business payment platforms like Payoneer can fuel this multi-location growth through payment solutions that connect the world.
Disclaimer
Nothing herein should be construed as if Payoneer Inc. or its affiliates are soliciting or inviting any person outside the jurisdiction where it operates/is licensed to engage in payment services provided by Payoneer Inc. or its affiliates, unless permitted by applicable laws. Any products/services availability are subject to customerโs eligibility. The availability of this product is not guaranteed and may vary. Not all products/services are available in all jurisdictions in the same manner.
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