Philippines outsourcing industry faces crisis from generative AI

The Philippine outsourcing industry, a vital economic pillar employing approximately 1.9 million people and generating $40 billion in annual revenue, is facing significant structural pressure due to the rapid rise of generative artificial intelligence.

According to the International Labour Organization (ILO), an estimated 12.7 million workers in the Philippines—over a quarter of the workforce—hold positions vulnerable to AI automation, particularly in customer service, accounting, software development, and marketing. Some workers report being laid off after being tasked with editing AI-generated content to train the very systems intended to replace them, with one worker lamenting, "It is we who are personally training the AI that will replace us."

The IT and Business Process Association of the Philippines (IBPAP) noted that over two-thirds of its member companies are currently conducting AI pilot programs. While major multinational firms like Accenture and Teleperformance suggest AI will act as an "assistant" requiring human supervision, labor groups warn that foreign clients are pushing for AI integration to reduce costs.

In response, the Philippine government, through the Department of Information and Communications Technology (DICT), has pledged to assist over 300,000 employees with reskilling initiatives and aims to foster a local AI industry to create higher-value job opportunities.