The Asean Economic Community (AEC) that will take place at end-2015 will hasten the role of Southeast Asia to become a global hub for manufacturing and services, with the Philippines and Malaysia leading the region in information technology-business process outsourcing (IT-BPO) industry.
IHS, a United States-based think tank, said on Friday that the full implementation of AEC this year will accelerate the region’s growth in sectors of manufacturing and services, in which the 10 member-states have their own share on the rise of Asean economy.
IHS East Asia Pacific chief economist Rajiv Biswas said the Philippines and Malaysia will be the major global hubs for IT-BPO industry due to the large pool of university-educated and strong English-language skills of the work force of both countries.
Biswas highlighted the strong IT-BPO in the region, as export revenue of the sector grew more than double between 2008 and 2014, employing over a million personnel.
For the Philippines, the industry posted an 18.7-percent revenue growth in 2014 to $18.4 billion.
The country is also projected to have 1.3 million employees by 2016.
“The rapid growth of this industry is also driving economic development in a number of cities across the Philippines, with Manila and Cebu now ranked among the world’s leading IT-BPO hubs,” Biswas said.
He mentioned that there is also a rapid growth of the IT-BPO sector in Malaysia, with Kuala Lumpur and Penang being developed as major IT-BPO hubs.
“A new IT-BPO Park is being built in Penang, which is expected to create around 21,000 new IT-BPO jobs by 2020,” he added.
Meanwhile, the IHC economist said the Greater Mekong Subregion—composed of Vietnam, Myanmar, Thailand, Cambodia and Lao PDR—is set to become the next manufacturing hub for Asean.
Vietnam, in particular, is seen as the electronics manufacturing hub in the region with multinational electronics firms repositioning their production in the said country. Thailand and Indonesia are still the top destinations for automotive and parts production, while Singapore remains the leading hub for maintenance, repair and overhaul industry.
“The Asean region is already experiencing rapid economic growth, and further economic liberalization and integration of the Asean economies is poised to trigger more rapid economic development,” Biswas noted.
By Kris M. Crismundo | Philippines News Agency