The outsourcing industry in the Philippines, a key driver of the nation’s economy, is confronting a major technological shift. As AI tools become more sophisticated, the very jobs that helped build the country’s global reputation for back-office services are at risk.

AI is automating many customer support and tech roles once performed by humans, raising concerns about the future of these jobs in the next few years.

With the country’s business process outsourcing (BPO) sector projected to surpass $38 billion in revenue this year, both opportunities and challenges arise as AI takes on greater responsibility. While industry leaders foresee job creation in new roles such as data annotation and algorithm training, the potential loss of up to 300,000 jobs looms large over the coming decade.

Why It Matters: The Philippines’ BPO sector provides millions of jobs and constitutes a vital part of the national economy. The deployment of AI technology in this industry signals a shift toward automation, posing risks to employment as well as economic stability. As AI capabilities grow, the future of human workers in customer service roles remains uncertain.

• AI in Call Centers: Many BPO companies in the Philippines have implemented AI tools to automate customer interactions. These systems handle initial inquiries, summarize interactions, and assist human agents in real-time, which has already begun to reduce the need for live support personnel.

• Job Loss Projections: Outsourcing advisory firm Avasant estimates that AI could lead to the loss of up to 300,000 BPO jobs in the next five years. However, the technology may also create around 100,000 new jobs in areas such as algorithm training and data curation.

• Industry Response: The Philippines is responding to the AI wave by investing in training and upskilling initiatives, with the government establishing an AI research center to help BPO workers adapt. Still, uncertainty remains about how prepared the country is for a fully AI-integrated industry.

• Economic Impact: As AI technologies become cheaper and more efficient, companies may look to other low-cost outsourcing destinations, such as Egypt and Ghana, potentially undermining the Philippines’ competitive advantage in the global market.

Go Deeper -> The World’s Call Center Capital Is Gripped by AI Fever — and Fear – Bloomberg