MANILA - Despite the projected modest growth in business-process outsourcing (BPO) this year, the government still needs to strengthen its initiatives in the sector, which includes helping in the retraining of workers and the development of its management, according to the House of Representatives think tank.

The Congressional Planning and Budget Department (CPBD) said that while the demand for BPO services, especially of nonvoice services in the country, will surge, this trend must be protected and boosted by the government by way of improving the overall investment environment, and addressing the scarcity of quality labor and jobs-skills mismatch, among other issues.

“At the policy front, the passage of the Data Privacy Bill and the Anti-Cybercrime Law should be pursued in order to make the country a more attractive BPO investment destination,” said the CPBD policy study.

Despite the global financial crisis which began last year, the CPBD said the country’s BPO sector still grew by 26 percent to $6.1 billion, or an annual average growth of 42.7 percent, when compared to the meager $350-million industry that it was in 2001.

Along with its growth, the number of workers employed also soared, from 99,300 workers in 2004 to 372,000 as of last year.

“The 40-percent annual growth rate of employment translates to 68,200 new hires annually, albeit lower than the government’s annual projection of 100, 000 workers in six years,” the CPBD said.

The driving force behind the revenue and job growth has been the contact-center subsector.

According to the policy study, 630 companies are providing BPO-IT services in the country as of last year. As of 2006, 76 percent are BPO companies, 19 percent are software-development firms and 5 percent are into engineering services outsourcing.

Of the BPOs, 124 firms are call centers, 100 are into medical transcription, 70 companies are animations, 62 firms into back-office processing and 27 companies in digital content.

“Over the years, the Philippine BPO industry, as one of the sunshine industries, has posted steady and strong growth in the services sector and the economy in general,” the study said.

In the area of investments, the BPO industry has put in an estimated P74 billion from 2000 up to 2008.