AI threatens Philippine BPO industry’s dominance
MANILA, PHILIPPINES — The Philippine business process outsourcing (BPO) industry is facing a formidable challenge from artificial intelligence (AI).
The industry, which accounts for about 8% of the country’s economy, has been a beacon of growth since 2000, but AI advancements are now threatening to displace jobs and businesses.
Mylene Cabalona, president of the BPO Industry Employees Network, expressed her concerns, stating, “Software is being used to improve service, but it is costing people their jobs.”
The rise of AI brought about a shift in the industry, with low-level customer service roles becoming increasingly automated.
In a 2020 report, the International Labor Organization warned that about half of the IT and BPO roles in the Philippines are “low-skill jobs” vulnerable to AI automation.
Despite the looming threat, Arnold San Miguel, COO of outsourcing marketplace Outsource Accelerator, remains optimistic.
He believes that while robots may take over some jobs, they still require human oversight and maintenance.
San Miguel also emphasized the importance of diversifying and moving up the value chain, as areas like real estate appraisals and architectural design for new buildings demand expertise beyond what AI can currently offer.
However, Bloomberg Opinion columnist Daniel Moss said that the Philippines must confront another pressing issue in its BPO industry—the declining English proficiency among its youth, which has been a key factor in attracting foreign companies.
The country’s ranking in English proficiency dropped four spots to 22nd out of 111 nations in an index last 2022, raising concerns among investors and highlighting the need for urgent educational reforms.
As the BPO industry evolves, Moss said that the Philippines must adapt to maintain its competitive edge.
With other countries like South Africa making significant strides in the sector, the Philippines’ once unchallenged position is now at risk. The nation’s young, tech-savvy workforce and linguistic heritage could be its saving grace, but only if it can keep pace with the rapid changes brought about by AI and globalization.
