AI seen as ‘significant but manageable’ threat to Philippine BPO industry

By Justine Irish D. Tabile, Senior Reporter

ARTIFICIAL INTELLIGENCE (AI) could slow employment growth in the Philippine business process outsourcing (BPO) industry, as companies automate routine tasks and hire fewer entry-level workers, experts said.

Philippine AI Business Association Director for AI Ethics and Data Governance Dominic Vincent D. Ligot said AI poses a “significant but manageable” threat to the Philippine industry.

“The immediate danger is not the disappearance of the sector, but the automation of routine tasks, fewer entry-level positions, and growth in revenues without comparable growth in employment,” he told BusinessWorld. “The outcome will depend on how quickly we respond.”

Mr. Ligot said the most vulnerable services include basic customer inquiries, password resets, data entry, transcription, appointment scheduling and templated chat and e-mail support as these tasks are repetitive, rules-based and highly standardized.

Simple claims processing, billing and first-line technical support are also exposed to automation, he added.

“By contrast, work requiring judgment, accountability, empathy, domain expertise, and complex problem-solving will remain more resilient,” Mr. Ligot said.

The IT and Business Process Association of the Philippines (IBPAP) said basic customer service, simple back-office processing, data entry and other transactional functions face the greatest exposure.

“AI is not simply eliminating work. It is fundamentally changing the kind of work that clients value,” the industry group told BusinessWorld.

IBPAP said AI is accelerating the Philippine information technology and business process management industry’s transition “from capacity to capability and from volume to value.”

“As routine work becomes increasingly automated, demand is growing for higher-value services that combine AI with human judgment, domain expertise, critical thinking, creativity, empathy, and complex customer engagement,” it added.

These assessments echo the World Bank’s warning that AI could weaken demand for workers in the Philippines’ BPO industry as companies in advanced economies automate more office and knowledge-based tasks.

In its World Development Report 2026: The Promise of Artificial Intelligence, the multilateral lender said economies that rely heavily on call centers and back-office services face growing pressure from automation.

Stratpoint Technologies, Inc. Head of Cloud and Data Business Zosimo Richard S. Carlos III said the impact would vary across the BPO industry.

Higher-tier services such as software development, data analytics and technology consulting are relatively more resilient because workers in these fields are more accustomed to learning and adopting new technologies, he said.

“At least from our specific BPO within the higher tier industry in software, we’re more secure because the tech adaptability of our people is naturally higher and inclined to learn all this new stuff,” Mr. Carlos told BusinessWorld in an interview.

Contact center companies are also incorporating AI as a supplemental tool for their employees rather than treating it solely as a replacement for human workers, the Stratpoint Technologies executive said.

However, human agents would likely remain necessary when customers have complex or sensitive concerns, particularly those involving financial matters, he added.

Meanwhile, Analytics & Artificial Intelligence Association of the Philippines President Michelle Alarcon said it would be misleading to treat the BPO industry as a single category because software development, voice services, back-office operations and creative work face different degrees of exposure.

“There is high exposure for some of these traditional jobs because of AI,” she said, citing data encoding and medical transcription as services that have already been transformed by technology.

Although certain roles may disappear, workers could still be retained and retrained for new functions as companies shift toward technical support and other higher-value services, Ms. Alarcon said.

Large BPO companies may be better positioned to manage the transition because they have the resources and support from their global headquarters to retrain employees, she said.

Also, smaller providers, particularly those with 1,000 seats or fewer, may have to pivot to different services to remain competitive. Some are considering moving into technical support, which would require agents to acquire more advanced technical skills, Ms. Alarcon added.

MOVING UP THE VALUE CHAIN
IBPAP said the priority should not be to resist AI but to make the Philippines one of the world’s best BPO destinations with an AI-enabled workforce.

One of its priorities is to attract more global capability centers by positioning the Philippines as a strategic hub for technology, finance, analytics, cybersecurity, engineering and other knowledge-intensive functions.

The industry should also expand AI-enabled and specialized services in customer experience, healthcare, information technology, finance and accounting, and human resources.

IBPAP also called for deepening the country’s competitive advantage in healthcare and financial services, where specialized expertise commands higher value.

“[We should also] diversify our markets by expanding beyond traditional sources of demand and attracting new investors across Europe, Japan, the Middle East, and the broader Asia-Pacific region,” it said.

IBPAP said it aims to build a pool of two million AI-enabled Digital Filipino Workers equipped with AI fluency, digital skills, industry knowledge, problem-solving ability, communication skills and adaptability.

“The future does not belong to people who compete with AI. It belongs to people who know how to work with it,” it said.

IBPAP recently revised its 2028 workforce forecast to between 1.85 million and 2.14 million full-time employees, from its previous target of 2.5 million.

It also cut its 2028 revenue forecast to between $43.3 billion and $50.5 billion from the previous target of $59 billion.

However, Mr. Ligot said upskilling alone would not be sufficient because employers typically train workers for their existing roles rather than preparing them for entirely new careers.

“The government must therefore support genuine reskilling through portable credentials, updated Technical Education and Skills Development Authority and university curricula, apprenticeships, job matching, and transition assistance,” he said.

“Investment incentives should also reward research, local intellectual property, advanced services, and innovation, not merely headcount,” he added.

BPO companies should identify automatable tasks early, redesign jobs and give employees paid opportunities to acquire skills in AI, data, process design and specialized industries, Mr. Ligot said.

“With agentic AI, career value will increasingly shift from execution to orchestration,” Mr. Ligot said. “The valuable worker will be someone who can define objectives, direct AI systems, verify their output, manage exceptions, and remain accountable for results.”

“The Philippines cannot prevent AI from automating BPO work,” he added. “Its choice is whether to remain a source of low-cost task execution or become a center for AI-enabled expertise, business ownership, and innovation.”