Key Takeaways
- Over 1.9 million people in the Philippines are employed in the outsourcing industry, which generates $40bn in revenues annually.
- The industry is disproportionately vulnerable to the impact of AI, with 12.7 million Filipinos employed in occupations exposed to generative AI.
- Many roles in the industry are at risk of automation, but some experts say affected workers have been redeployed within the same organisations.
- The government and private sector are promoting retraining and upskilling efforts to prepare workers for the changing job market.
The Philippines' outsourcing industry has been one of the country's biggest economic success stories, with over two decades of growth and expansion. However, the industry is facing a new challenge with the increasing adoption of artificial intelligence (AI) technology.
Experts say that AI has the potential to automate many roles in the industry, which employs roughly 1.9 million people and generates $40bn in revenues every year. The International Labour Organization estimates that 12.7 million Filipinos are employed in occupations exposed to generative AI, the highest share in South East Asia.
Background & Context
The outsourcing industry in the Philippines began to grow in the early 2000s, when the country was promoted as an English-speaking alternative to India for business process outsourcing (BPO). Successive governments offered tax incentives, invested in infrastructure, and encouraged multinational companies to set up large operations in the country.
Today, the industry is dominated by multinational companies such as Accenture, Concentrix, and Teleperformance, which have built sprawling campuses and employ hundreds of thousands of Filipinos. However, the industry is facing a new challenge with the increasing adoption of AI technology.
Key Findings
Studies have shown that the outsourcing industry is disproportionately vulnerable to the impact of AI. The International Labour Organization estimates that 12.7 million Filipinos are employed in occupations exposed to generative AI, the highest share in South East Asia.
According to experts, the types of service jobs that people do in the Philippines make it particularly at risk. Jack Madrid, president of the IT and Business Process Association of the Philippines (IBPAP), admits that AI is being adopted by the sector, and more than two-thirds of IBPAP's members are already running AI pilots.
Broader Implications
The impact of AI on the outsourcing industry has broader implications for the Philippine economy and society. The industry's growth and expansion have been driven by the skills and talents of Filipino workers, and the industry has been a key driver of economic growth and poverty reduction.
However, the adoption of AI technology raises concerns about job displacement and the need for retraining and upskilling efforts. The government and private sector are promoting retraining and upskilling efforts to prepare workers for the changing job market.
Looking Ahead
The future of the outsourcing industry in the Philippines will depend on how it adapts to the changing job market driven by AI technology. The industry's growth and expansion have been driven by the skills and talents of Filipino workers, and the industry has been a key driver of economic growth and poverty reduction.
The government and private sector are promoting retraining and upskilling efforts to prepare workers for the changing job market. However, the industry's future will depend on how it adapts to the changing job market driven by AI technology.
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