The Philippine BPO Industry and the Middle Class

[] What will be the impact of TRAIN-TRABAHO to the growth of the middle class?

Rey Untal, President-CEO, Information Technology and Business Process Association of the Philippines (IBPAP)


“This industry, in fact, is the largest creator of jobs and as such, it is very critical to the economy… But what not a lot of people know is that the industry is instrumental in creating the large middle class. And this large middle class is going to be critical in our desire and aspiration to, in fact, improve the lives of Filipinos.”

IBPAP maintains a positive attitude despite the current challenges being faced by the Philippine BPO industry, such as Duterte’s TRAIN law whose second package (aka the Tax Reform for Attracting Better and High-Quality Opportunities, “TRABAHO”) aims to lessen or remove the financial perks awarded by all investment promotion agencies (IPAs), including the Philippine Economic Zone Authority (PEZA), to foreign investors.

Hope in Senator Gatchalian?

Most BPOs go through PEZA in order to take advantage of the 5% gross income earned (GIE) tax incentive. But under the second package of TRAIN-TRABAHO, the Department of Finance has announced its intention to completely remove this 5% perk.

Senator Sherwin Gatchalian on the other hand, has openly declared that the Senate committee on economic affairs may push to keep the 5% GIE tax incentive intact under the TRABAHO Bill. As per the good senator, BPO’s combined with the electronics and semiconductor industry, contributes around 20% to the country’s gross domestic product (GDP).