Key facts
- Workers in the Philippines' outsourcing sector are being made redundant as companies adopt AI.
- Employees who trained AI systems for their employers are among those losing their jobs.
- The outsourcing industry employs approximately 1.9 million people in the Philippines and generates $40 billion annually.
- Experts estimate over one in four Filipino workers are in occupations exposed to generative AI.
- Companies cite pressure from foreign clients and the need for cost-cutting as drivers for AI adoption.
- The Philippine government plans to upskill over 300,000 outsourcing workers.
Workers in the Philippines' vital business process outsourcing (BPO) sector are facing job displacement as artificial intelligence is increasingly integrated into their roles. Many employees, like former content writer Lisa, found themselves redundant after using their skills to train AI systems that ultimately replaced them. This trend is raising significant concerns about the future of an industry that has been a major economic success story for the Philippines, employing around 1.9 million people and contributing about 10% to the national GDP.
Experts warn that the Philippines' BPO sector is particularly vulnerable, with the International Labour Organization estimating that over one in four Filipino workers are in occupations exposed to generative AI. While industry leaders like Jack Madrid of IBPAP acknowledge the automation potential, they also highlight efforts to redeploy affected workers and the critical importance of reskilling. However, the pressure from foreign clients to adopt AI for cost-cutting and productivity gains is immense, often overriding concerns about domestic workforce displacement.
Some workers, like Mary, experienced increased workloads due to the need for more editing and fact-checking of AI-generated content. Companies such as Teleperformance and Accenture state their intention to use AI to augment rather than replace their workforce, with plans for retraining. However, concerns persist among some Filipino managers about the pace of AI adoption and its impact on employment. Paul Quintos from the University of the Philippines-Diliman notes that "AI washing" can occur, where layoffs are attributed to AI when they may be driven by weaker economic demand.
Existing labor laws in the Philippines offer limited guidance on how companies should introduce AI or consult employees, and the sector is largely non-unionized. The government, represented by officials like Leandro Aguirre of the Department of Information and Communications Technology, acknowledges the need to accelerate efforts in upskilling and potentially rethink the economic model that heavily relies on foreign direct investment. The ambition is to foster local AI companies and ensure the workforce can thrive in the evolving AI landscape.