Philippine BPOs face AI talent shortage amid rapid adoption
MANILA, PHILIPPINES — The Philippine information technology and business process management (IT-BPM) sector is grappling with a significant shortage of artificial intelligence (AI) talent despite a robust AI adoption rate exceeding 60%.
According to Dominic Vincent Ligot, founder of Cirrolytix Research Services and head of AI and research at the IT and Business Process Association of the Philippines (IBPAP), this talent gap poses a substantial challenge to the industry’s growth and competitiveness.
Speaking with BusinessWorld, Ligot said that the biggest hurdle the country needs to address is the lack of AI-equipped talent in the market.
Educational system fails to meet industry needs
The shortage is largely attributed to the lack of AI-knowledgeable educators in Philippine schools, which hinders the development of an AI-capable workforce.
Ligot pointed out that the current graduates do not meet industry requirements, particularly in the business process outsourcing (BPO) sector. This necessitates additional retraining and upskilling, which adds cost burdens to BPO firms.
Government and industry response
In response, the Philippine government announced initiatives to upskill the workforce in AI and cybersecurity.
Frederick Go, special assistant to the President for investment and economic affairs, stressed the importance of creating a niche in these fields.
The government and industry have also launched the Philippine Skills Framework (PSF) Initiative to align academic outputs with industry needs.
Ligot also noted that at least eight bills pending in Congress address various aspects of AI. These include proposals for establishing an AI Development Agency, a Private Sector Council on AI, a National Center for AI Research, and a GenAI in Education Council. Additionally, several bills focus on labor protection, governance, and the ethical implications of deep fakes in the AI era.
“These legislative efforts highlight the complexity of AI governance. It’s not just about fostering innovation; it’s about ensuring that this innovation benefits everyone while minimizing risks and protecting the most vulnerable in our society,” Ligot said in a separate speech.
AI’s dual Impact on employment
The rapid integration of AI tools in the BPO sector, particularly in call centers, is reshaping the industry. AI “copilots” are now assisting human agents with tasks like summarizing customer interactions and analyzing sentiments in real time. While this technology enhances efficiency, it also raises concerns about potential job losses.
Avasant, an outsourcing advisory firm, estimates that up to 300,000 BPO jobs in the Philippines could be lost to AI in the next five years, although AI could also create 100,000 new roles in areas like algorithm training and data curation.
Ligot added that AI resulted in a 14% productivity increase in call centers, with improvements of 30-40% among less skilled agents and a 43% boost in consultants’ performance. In the education sector, AI is significantly impacting outcomes, enabling less skilled students to achieve results two to three times better than before.
Emphasizing STEM education for future readiness
To address these challenges, industry experts like Michael Ricafort, chief economist at Rizal Commercial Banking Corp., advocate for making Science, Technology, Engineering, and Mathematics (STEM) courses more attractive to develop core IT skills.
The Philippine Chamber of Commerce and Industry has recommended enhancing STEM programs to increase the employability of graduates.
The IT & Business Process Association of the Philippines is promoting a framework known as the 4Es, which focuses on Education, Engineering, Enforcement, and Ethics.
Alberto Fenix, Jr., president of the Chamber’s Human Resource Development Foundation, emphasized the need for more data analysts, stating, “Even if there is AI, there is still a need for someone to check the data and analyze it.”
Meanwhile, Ligot stated that “the developments in AI in the Philippines present us with challenges but even more opportunities. The contrasting reports on our AI readiness remind us that while there is much work to be done, the enthusiasm and adaptability of our people give us a strong foundation to build on.”
As the Philippines aims to position itself as a leader in AI, addressing these educational and workforce challenges is crucial to ensuring sustainable growth in the IT-BPM sector.
