Boston, MA -- (SBWIRE) -- 05/24/2013 -- The Philippines IT market is forecast to grow by around 9.6% in 2013 to a value of PHP165.8bn. Over our five-year forecast period to 2017, the market should be a regional outperformer, growing at a CAGR of 9.1% in local currency terms to a total value of PHP234bn. Growth will be supported by proliferation of PC ownership as high specification, but affordable devices, becomes widely available. In this respect the Philippines has great potential via its low PC penetration, estimated at 10% in 2011, according to The Singapore Management University, particularly with support from government ICT programmes. Other contributory factors for growth include the outsourcing industry, cloud computing uptake by government and SMEs, and investment in IT in the education and healthcare sectors.
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Headline Expenditure Projections
Computer hardware sales: PHP92.2bn in 2012 to PHP99.2bn in 2013, +7.7% in local currency terms. Shipments dipped in Q412, but we expect the PC market to recover in 2013, with fundamentals remaining strong.
Software sales: PHP17bn in 2012 to PHP19bn in 2013, +11.8% in local currency terms. Our forecast factors in the momentum generated by the growing adoption of cloud solutions by the Philippines business process outsourcing (BPO) industry.
IT services sales: PHP42.1bn in 2012 to PHP47.6bn in 2013, +12.9% in local currency terms. We forecast services to outperform the other segments in medium-term growth, with software services outsourcing a key driver, notwithstanding the temporary downturn in growth during 2013.
Risk/Reward Ratings: The Philippines fell to ninth position even though its IT Rating score increased from 43.8 to 49.6 this quarter. It has potential to move up the table in the coming years due to rising PC penetration and the potential to move up the outsourcing value chain.
Key Trends And Developments
- The latest data show a drop off in PC shipments in Q412, with reports that the launch of Microsoft Windows 8 provided little boost to sales. Despite this drop-off in sales, we believe a number of factors will result in there still being significant opportunities in the Philippines. Regional differences in growth will be key, with demand from outside Manila continuing to drive market expansion. Cebu is seen as a gateway to provinces in Visayas and Mindanao. The city is ranked by the Financial Times among the top 10 cities of the future in the APAC region, while Tholons listed Cebu in the top ten of global BPO destinations. Tablets also offer a significant opportunity, with the price of devices falling in H212 and a wide range of higher quality Chinese OEM devices hitting the market in 2013. The popularity of tablets could, however, be detrimental to demand for desktops and notebooks.
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