The enterprise ICT market in the Philippines is projected to grow at a compound annual growth rate (CAGR) of 10.9%, mainly led by IT services, more specifically cloud computing and BPO service segments, forecasts GlobalData, a leading data and analytics company.
GlobalData’s Philippines Enterprise ICT Country Intelligence Report shows that the ICT market size in the Philippines will increase from $20.9 billion in 2023 to $34.9 billion in 2028, in line with the positive ICT investment sentiment seen among the enterprises.
This is put to perspective by the findings from the GlobalData’s 2024 ICT customer insight survey*, which reveals that a majority 85.4% of respondents (who are key ICT decision makers in their respective enterprises) confirmed that there has been an increase in their enterprise ICT budgets in 2024 as compared to previous year.
Among the three IT infrastructure segments—hardware, software, and services—the IT services segment is anticipated to see the highest cumulative revenue growth over the forecast period. The high revenue contribution from IT services is primarily due to high demand and adoption of cloud computing services and the strong presence of BPO services, both of which are projected to account for nearly 40% of the ICT revenue in the country by 2028.
Samrat Volam, Technology Analyst at GlobalData, says: “The Philippines continues to be the preferred destination for BPO services, largely due to its cost-effective labor, skilled and English-proficient workforce. The government’s support through favorable policies and incentives, such as tax holidays and duty-free importation, further strengthens the country’s appeal for IT and IT enabled services, including BPO services.
BFSI is the largest end-use vertical
GlobalData forecasts the banking, financial services and insurance (BFSI) sector to be the largest end-use vertical for the Philippines’s ICT market in terms of revenue share and will remain so throughout the forecast period, contributing an estimated 12.8% of the total cumulative revenue from 2023 to 2028.
Volam adds: “The BFSI sector in the Philippines is driving substantial growth in the ICT market through the adoption of advanced technologies and digital transformation initiatives. The rise of fintech solutions and mobile banking has increased the demand for robust ICT infrastructure and cybersecurity measures. Additionally, the government’s push for digital payments and the establishment of digital banking licenses and a unified QR code payments infrastructure (QRPh) is further accelerating this trend.
While both large enterprises and micro, small and medium enterprises (MSMEs) are actively investing in ICT, the MSME segment is expected to lead in revenue growth, with a projected CAGR of 12% over the forecast period.
Volam concludes: “Initiatives like ‘The MSME Development Plan 2023-2028’ that are aimed at boosting the agility and resilience of MSMEs in a dynamic business environment drive growth. The plan emphasizes the adoption of technologies such as cloud computing, AI, and IoT, supported by funding mechanisms like government subsidies, low-interest loans, and fintech collaborations to drive ICT implementation.”
*GlobalData’s ICT Customer Insight Survey carried out during H1 2024 highlights survey responses related to ICT investment priorities and budget allocations by enterprises in the Philippines.
