MANILA, Philippines - The Philippines’ booming business-process outsourcing (BPO), currently ranked second in the world with revenues reaching $11 billion, was highlighted at the recent 58th session of the Trade and Development Board of the United Nations Conference on Trade and Development (Unctad) in Geneva.

The meeting in Geneva examined the implications of nonequity modes of international production, which includes services, outsourcing, contract manufacturing, contract farming, licensing and franchising.

Trade Undersecretary for Industry and Investments Cristino Panlilio said the Philippines’ cost effectiveness, excellent communications infrastructure, large talent pool, strong public-private partnerships, and relatively low risk perception are among the factors being considered by foreign investors.

The country is now the world’s second destination of BPO services next to India. Last year, revenues from the BPO and Information Technology industry reached $9 billion and provided jobs to over 530,000 employees in financial services, human resources, IT and software development, management services, engineering design, animation and other sectors.

Representing the Asian group, Ambassador Evan P. Garcia, Philippine permanent representative to the UN and other International Organizations in Geneva, said that three countries—India, the Philippines and China—accounted for approximately 65% of global export revenues related to IT-BPO services in 2009. In terms of licensing activity directed at developing markets, the region comprised almost 80% of the total, measured in terms of royalty payments in 2008.

Garcia said based on the 2011 World Investment Report, nonequity modes (NEMs) of production contribute to employment, capacity building, technology diffusion, exports and the overall gross domestic product of host countries including developing economies. At the same time, the report also identified social and environmental concerns over NEMs.

The NEMs category includes export and contractual agreements. He encouraged Unctad to continue its research to enable developing countries to maximize the benefits arising from these NEMs of international production, minimize risks and address other negative impacts associated with the integration of domestic firms into the NEMs networks of transnational corporations.

Panlilio said the outsourcing industry in the Philippines are mostly voice BPOs, non-voice BPO in finance, accounting, medical transcription and other areas.

The trade official said the BPO industry now accounts for 60% of the country’s total services exports.

Panlilio said the industry is expected to generate $11 billion in terms of services export revenues and provide jobs to 640,000 people.

If challenges are addressed, Panlilio said the IT-BPO road map forecasts will reach $25 billion in revenues and employ 1.3 million people by year 2016.