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The IT market in the Philippines is forecast to accelerate slightly in local currency terms in 2025, with a more significant improvement in US dollar terms because of expected peso appreciation. The core scenario for the medium term is an extended period of elevated IT market growth rates as the private and public sector continues to invest in digital projects, driven by growth opportunities and pressures to modernise operations. The cloud and AI ecosystem is an area of rapid development, and investments in digital infrastructure such as telecoms networks and data centres will be a foundation for the medium-term IT market growth trend. Advances in AI could also lower software project costs and accelerate digitilisation, but there is a threat posed to the business process and IT outsourcing industry from digital automation.