AI threatens Philippine BPO workers, IMF report warns
MANILA, PHILIPPINES — The Philippine business process outsourcing (BPO) industry faces significant challenges as artificial intelligence (AI) advances, potentially displacing workers in one of the country’s key economic sectors.
A recent International Monetary Fund (IMF) working paper highlights the risks and opportunities presented by AI in the Philippine labor market, particularly for BPO workers.
AI’s impact on the Philippine BPO sector
The IMF report reveals that around one-third of jobs in the Philippines are highly exposed to AI. This means that AI can perform many of the tasks in these occupations.
The BPO industry accounts for 7.4% of the country’s GDP in 2023 and is particularly vulnerable to AI-driven changes.
“The Philippines, with its large BPO sector, faces unique challenges and opportunities. The BPO industry, a significant contributor to the country’s economy, might experience shifts as AI-driven chatbots and virtual assistants handle more customer service tasks,” the IMF stated in its working paper.
Potential job displacement and opportunities
While the BPO sector only accounts for about 3% of the workforce, these workers are considered highly exposed to AI with low complementarity. This makes them susceptible to displacement. Data from the International Labor Organization shows that 89% of the BPO workforce faces a high risk of automation.
However, the IMF also notes that 61% of the highly exposed jobs are considered highly complementary, meaning AI technologies are “likely to support rather than replace the worker, potentially increasing their productivity.”
Preparing Philippine BPO workers for the AI transition
Experts emphasize the need for proactive measures to address the challenges posed by AI. Benjamin Velasco, Assistant Professor at the University of the Philippines Diliman School of Labor and Industrial Relations, suggests that AI can generate new job opportunities.
“AI will replace some forms of work, but it can also create other kinds of jobs. Upskilling is one way to deal with the ‘creative destruction’ effect of AI,” he told BusinessWorld.
Jose Sonny Matula, President of the Federation of Free Workers, calls for aligning AI training with development objectives and promoting fair wages.
“AI should be developed to help realize agro-industrial development, to mechanize and digitalize farms for greater productivity and contribute to national food security,” he stated.
As the Philippines navigates this technological transition, the government and industry stakeholders must focus on upskilling the workforce, developing ethical AI frameworks, and ensuring that AI serves as a tool to enhance human labor rather than displace workers. The country’s ability to adapt to these changes will be crucial in maintaining its competitive edge in the global BPO market and fostering economic growth in the AI era.
