- The Philippines is the fastest-growing digital economy in Southeast Asia, because of its strong workforce, government initiatives, and high market confidence.
- The demand for specialized skills in manufacturing and IT-BPM is driving growth in local recruitment solutions, including onshore RPO.
- Some key trends in onshore RPO include AI-powered recruitment, enhanced candidate experience, and secure and ethical hiring.
The lingering inflation, trade barriers, and economic uncertainty in 2025 put global businesses under increasing pressure to cut costs and improve hiring efficiency, without compromising talent quality.
That’s why more companies are turning to RPO for talent acquisition. As a result, the industry is on track to reach $33.6 billion by 2030, expanding at a 17.5% compound annual growth rate (CAGR).
Meanwhile, RPO, specifically onshore RPO, is gaining traction in the Philippines since industries like manufacturing and Information Technology-Business Process Management (IT-BPM) are facing a growing demand for specific analytical skills.
This article will dive into the current local business market conditions and the emerging trends in onshore RPO that you should look out for.
Today’s Philippine Business Climate
Despite global challenges last year, the country showed resilience and remained a key player in Southeast Asia.
In fact, a 2024 study by Google, Temasek, and Bain and Company claimed that the Philippines is the fastest-growing digital economy in the region, driven by rapid expansion in e-commerce and digital payments.
Let’s take a closer look at the factors that shaped the country’s momentum.
1. A Stable Labor Market and Expanding Employment Opportunities
The country continues to experience a stable labor market, with the unemployment rate decreasing to 4.3% in January 2025, down from 4.5% in January 2024. The Philippine Statistics Authority (PSA) noted that most Filipinos are employed in the services (61.6%), agriculture (21.1%), and industrial (17.2%) sectors.
Additionally, the national government’s focus on job creation and skills development—aligned with the Philippine Development Plan (PDP) 2023-2028—has further strengthened employment opportunities across the country.
2. Increased Government Spending and Pro-Business Policies
The ₱6.33 trillion national budget for 2025, a 10% increase from the previous year, shows the government’s commitment to support economic growth and improve public services. Moreover, there’s a fiscal program focused on reducing the debt-to-GDP ratio from 60.2% in 2023 to 55.9% by 2028.
To attract more foreign investments, the government has also implemented pro-business economic policies. For example, the Foreign Investment Act (FIA). allows 100% foreign ownership in sectors not listed in the Foreign Investment Negative List, creating a more open and competitive investment environment.
3. Growing Household Spending and Economic Resilience
According to BMI, a Fitch Solutions unit, consumer spending is expected to increase from 5.0% in 2024 to 5.3% in 2025. Household spending is also projected to reach PHP 13.2 trillion in 2025, thanks to the country’s higher wages and stronger labor market.
The Philippine economy is forecast to grow by 6.3% in 2025, supported by easing inflation and higher purchasing power. The World Bank even estimates an average GDP growth rate of 6.0% from 2024 to 2026, highlighting the effectiveness of ongoing economic policies.
Key Trends in Onshore RPO for 2025
With strong labor market performance, pro-investment policies, and increasing consumer confidence, the Philippines is well-positioned for sustained economic growth in 2025 and beyond.
However, as more foreign brands expand their operations in the country this year, local businesses may struggle to attract and retain highly skilled professionals. That’s why organizations adopt onshore RPO to access top talent, streamline hiring, and enhance workforce agility.
Here are some onshore RPO trends today:
1. AI-Powered and Data-Driven Recruitment
About one in four organizations use artificial intelligence (AI) to support human resource-related activities. This number is expected to rise since 92% of executives plan to increase AI investments in the next three years.
By embracing AI-powered recruitment tools, businesses can significantly reduce the 23 hours typically spent screening resumes and scheduling interviews, allowing recruiters to focus on engaging top talent and making strategic hiring decisions.
Pros:
- Faster Candidate Screening: AI quickly filters resumes to identify the best-fit candidates.
- Automated Interview Scheduling: Reduces administrative workload and streamlines the hiring process.
- Improved Hiring Accuracy: Predictive analytics help match candidates with the right roles.
Cons:
- Risk of Bias in Algorithms: AI may unintentionally favor certain candidates if not properly monitored.
- High Implementation Costs: Investing in AI technology can be expensive for smaller businesses.
- Dependence on Data Quality: AI effectiveness relies on accurate and diverse data sets.
2. Enhanced Candidate Engagement and Employer Branding
Timely and effective communication can make or break the hiring process. However, many employers fall short in this area since only 4% of job seekers hear back within one day, while the majority (44%) receive a response within a couple of weeks.
This lack of responsiveness can significantly impact employer branding because 72% of candidates report a negative interview experience that affects their perception of the company, even if they don’t get hired.
Pros:
- Proactive Communication: Regular updates keep candidates engaged and informed.
- Stronger Employer Reputation: Positive candidate experiences enhance brand perception.
- Higher Offer Acceptance Rates: Engaged candidates are more likely to accept job offers.
Cons:
- Time-intensive for Recruiters: Maintaining consistent communication requires effort.
- Negative Reviews Spread Quickly: A poor hiring experience can harm employer branding.
- Unrealistic Candidate Expectations: Over-promising during the hiring process can lead to dissatisfaction.
3. Secure and Ethical Hiring
Although AI systems are 200% more effective in meeting hiring goals, businesses must ensure compliance with labor laws and data privacy regulations. The Philippines’ stricter labor laws and data protection policies, such as the Data Privacy Act, emphasize the need for transparency and security in recruitment processes.
However, the rise of AI in hiring also presents challenges. If not properly managed, these recruitment systems can unintentionally reinforce biases, affecting diversity and fairness. Notably, 32% of job seekers say they would avoid working for a company that lacks a clear commitment to diversity, equity, and inclusion (DEI).
Pros:
- Regulatory Compliance: Helps avoid penalties and legal issues by adhering to labor laws and data privacy regulations.
- Ethical AI Use: Reduces hiring bias through responsible AI implementation.
- Stronger Employer Brand: A clear DEI commitment enhances candidate trust and company reputation.
Cons:
- Complex Compliance Requirements: Adapting to new labor laws and privacy regulations can be challenging.
- Potential for AI Bias: AI must be monitored to prevent discriminatory hiring practices.
- Data Security Risks: Protecting candidate information requires strict cybersecurity measures.
Stay Ahead with Sysgen RPO’s Onshore RPO Solutions
As the job market evolves, companies in the Philippines need smarter, more efficient hiring solutions to stay ahead. Onshore RPO helps businesses leverage AI-driven tools, enhance candidate experience, and ensure compliance with labor laws.
Sysgen RPO specializes in finding the right talent quickly and efficiently. With over three decades of experience, we offer recruitment solutions to help businesses reduce hiring costs by 40%-60% while ensuring access to highly skilled local talent.
Whether you need skilled professionals, leadership hires, or scalable recruitment solutions, we’ve got you covered.
Are you ready to optimize your local recruitment strategy? Partner with us today and let’s build your dream team together!
