The 2021 Transformation Summit organized by the Cebu IT BPM Organization (CIB.O) showcased the strategies and actions taken by the IT/BPM industry to accelerate digital transformation and help thrive with the future especially with the COVID – 19 pandemic going on. The virtual summit took place from July 12 until July 15.
One of the key highlights on the first day is the National Economic Forecast discussed by the Economics Professor from Ateneo de Manila University, Dr. Alvin Ang.
Ang tackled the state of the economy in the last 1.5 years, sustaining recovery from the economic recession, and the contributions of the BPO industry.
According to Ang, the pre-pandemic economic structure during 2019 was strongly household-based with strong investments and the government is just a moderate player in the Philippine economy. Agriculture is also at its weak point but the biggest contributor to our growth are the services such as the wholesale and retail trade, construction, finance, and more importantly, the BPO sectors.
Compared to the 2009 crisis, construction and finance boosted the economy, but because of the 2020 pandemic, construction was replaced by ICT.
Today, with the government spending much more than what is being earned, the deficit is close to 8% of our Gross Domestic Product (GDP) and borrowed money domestically to finance the deficit.
Meanwhile, the BPO sector still flourished despite the pandemic. Though it had setbacks, it was still able to provide foreign exchange for the country.
On the other hand, as people stayed in their homes, physical retail stores shifted to online ventures. Compared to 2019, some of the 2020 expenditures have significantly declined such as restaurants and hotels from 9% to 6% and transportation from 12% to 8%. Contrastingly, as behavioral households have shifted, the food consumption increased from 34% to 38%, indicating that people have resorted to dining at home and ordering food online.
In terms of employment, it is already increasing compared to last year. But still, there is a worry of the quality of work falling as many of these jobs are informal or short-term.
Early this year, there was also an increase in prices of goods and services but as Ang said, “the inflation is still high at 4% but it is not really high (because) it is within the target of government so that should make us feel better.”
As the threat of the virus remains, economic activity will remain depressed thus, the government has to improve its public health defense. One of the most important contributions to the economy is the shift to telehealth in which it uses digital information and technologies to access health care services.
On top of that, domestic tourism and agriculture is expanded and improved to sustain the economy.
There is also significant progress in the use of InstaPay, PESONet, and online shopping compared to the previous years. Savings have increased as well as money supply reaches 80% of GDP. This is primarily due to people staying at home with less traveling and eating outs.
We will be out of recession as the next quarter finishes and will continue to grow by 7% in the second half of the year. In view of growth,, the Information and Communication Technology (ICT) and Financial and Insurance sectors are growing steadily as the pandemic did not have much effect on it. As we continue to battle against pandemic, the World Bank estimates that our economy will fully recover at the end of 2022.