MANILA—The Philippine services sector has been growing dramatically over the past years, narrowing the employment gap while pushing export growth.

Citing the latest Bangko Sentral ng Pilipinas data, Trade Undersecretary Adrian S. Cristobal Jr. said moving up the value chain in the services industry will sustain the momentum it has gained over the years.

The Philippine services industry, such as information technology (IT), business-process outsourcing (BPO), as well as tourism and transport services, grew by 20 percent in 2010 and generated $13.2 billion and 1.6 million jobs last year.

“One of the urgent tasks for the country is to develop human capital needed to fill the hundreds of thousands of jobs that the services sector will need every year. The demand for skilled workers, supervisors, middle managers, and a wide array of knowledge workers in various disciplines and complex services will continue to rise,” Cristobal said during a recent Trade in Services Conference organized by the World Bank, in partnership with the Ayala Foundation and the Business Processing Association of the Philippines.

According to a World Bank report to be published, titled “Exporting Services: A Developing Country Perspective,” the Philippines is one of the best performers in the services sector worldwide.

BPO, in particular, showed impressive performance in the past decade, catapulting the Philippines to No. 3 in the world with a 15-percent share of the global BPO market, after India (37 percent) and Canada (27 percent).

The success of the Philippine services industry, specifically in IT-BPO, has been attributed to several basic factors, which taken together, gives the Philippines a competitive advantage.

These include: a large pool of highly qualified, English proficient work force; vibrant telecommunications infrastructure; policy and regulatory environment conducive for growth; organized and aggressive private sector willing to work with government; and deliberate government intervention in support of the sector from investment incentive policies to marketing and promotions through the  Department of Trade and Industry’s  Foreign Trade Service Corps.

A decade ago, services exports contributed only 9 percent of total Philippine exports and in 2010 rose to 28 percent.

During this period, services sector grew at annual average of 12 percent—thrice as fast as the country’s merchandize (goods) exports. From about 5,000 work force in 2001, the industry employed close to 526,000 people and generated $11-billion revenues in 2010.

Since 2006 the Philippines has been a net exporter of services, an accomplishment very few developing countries have matched.