IDC forecasts IT spending of the Philippines to grow at a 10.4% CAGR over the next five years

Auguts 01, 2006

Manila, Philippines, August 01, 2006 – IDC publishes its latest study under the Philippine ICT Market report series program entitled Philippine IT Spending User Segmentation 2006-2010 Forecast and Analysis which presents the latest comprehensive IT spending forecast for the Philippines, based on research completed in March 2006. This is a "databook" on the Philippine IT product and services spending segmented by vertical and user size spending, offering a profile of the IT market in the country. This study presents an analysis of end-user IT spending and market opportunities across 17 vertical segments, as well as company sizes in the Philippines.

2005 saw major shifts in IT spending level in the Philippines, with the industry growing by 20% to reach US$1.4 billion, after finally hitting the US$1 billion mark in 2004. Although the economy did not grow as high as in 2004, positive business sentiment brought about renewed commitments from the end-user community to particularly zero in on key IT investments. These IT investments allowed companies to achieve business efficiency, as well as provided addressable opportunities for IT vendors and service providers

Philippines Overall IT Spending, 2005

n = US$1.4 billion
Source: IDC Black Book, May 2006

IDC expects the country to maintain the momentum in IT spending in 2006 and beyond, expanding by a 10.4% compound annual growth rate (CAGR) through 2010. The country is seen to lean toward hardware centricity, owing to the fact that a large proportion of the population has yet to adopt or fully implement IT. The hardware segment will account for 67% of the IT market in 2006, with PCs, networking hardware, printers, and smart handheld devices (SHDs) topping the demand. Services is expected to account for 22% of the total market, while the software segment will garner 11%. Spending on these two segments will be driven by the rapidly growing IT infrastructure requirements for information and data security, as well as on more complex IT management processes. All in all, companies want to achieve a higher level of business efficiency in order to be able to offer product innovation and ultimately remain competitive. Furthermore, demand from the communications and media, banking, and discrete manufacturing verticals will still heavily shape the IT spending landscape in the country.

"The relative under penetration of the country bodes well for IT vendors and service providers in the Philippines. IT spending is seen to grow at a 10.4% compound annual growth rate (CAGR) over the next five years, providing room for business growth and addressable opportunity. Capturing requirements from specific verticals and user size segment will greatly depend on vendors' inroads in improving products, customer service, partnering strategies and thorough understanding of end-user wants, needs and peculiarities," says Jubert Daniel Alberto, Senior Analyst, IDC Philippines.

For more information about purchasing the research, please contact Hazmi at +603-2169-7526 or hyusof@idc.com. For press enquiries, please contact Stephen Chong at +603-2169-7521 or ckchong@idc.com.

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