Philippine IT-BPM industry firm in facing AI challenges

by John Joseph Basijan / September 26, 2024

The rapid pace of advancements in the field of generative artificial intelligence (AI) has caused concerns on job security, leaving one question in the minds of many: Will my job be replaced by AI? 

Earlier this year, the International Monetary Fund estimated that around 40 percent of jobs will be affected by AI. A separate study by Duke University and the Federal Reserve Banks of Atlanta and Richmond revealed that more than half of the biggest firms in the US are planning to automate tasks that are previously handled by human employees.

While it has yet to be determined whether these predictions have come to fruition, another worrying prediction hits closer to home. A Bloomberg report estimates that around 300,000 jobs in business process outsourcing will be lost to AI in the next five years.

Should the Philippines worry about this estimate, given that the country’s IT and Business Process Management (IT-BPM) industry is one of the biggest contributors to the economy?

Allaying AI-related fears

Some companies have, in fact, begun to integrate AI into their customer service interactions—interactions that are equivalent to the work of hundreds of full-time agents.

One notable application of AI is a “copilot,” an algorithm that utilizes advanced speech recognition technology, content processing, and data and sentiment analysis to summarize a customer’s previous contact with the company in real time. This would theoretically spare companies the need for a lengthy conversation with their customers and, by extension, the need for call center agents.

This is merely a glimpse as to how AI can take over tasks that might be deemed mundane by organizations and subsequently cost the jobs of call center agents in the Philippines. In fact, the Association of Southeast Asian Nations (Asean)+3 Macro Research Office or Amro has named Filipino BPO workers as more at risk of losing their jobs to AI in the region, unless the country can shift to delivering knowledge-based services that will require human intelligence and skills.

The Information Technology and Business Process Association of the Philippines or IBPAP, however, has been steadfast in allaying fears on AI and job security. Reacting to the Bloomberg report, IBPAP has reiterated that AI will serve as a way to augment the current jobs in the industry.

“We don’t subscribe to the 300,000 number of potential job losses cited. On the contrary, we expect to continue to grow between 5 to 7 percent in 2025. IBPAP believes the primary impact of AI will be in the form of job augmentation rather than job loss. Our current assumption is that 80 to 90 percent of the AI impact will lead to job transformation, with only 10 to 20 percent potentially affected by automation,” IBPAP said in a statement.

IBPAP has previously created an AI Advisory Council, which aims to upskill Filipino BPO workers and make them adept with generative AI. Through this council, IBPAP has established partnerships with the academe and other industry associations to enhance the workforce’s skills in programming, data science, data analytics, and AI ethics.

Navigating an AI-driven future

IBPAP remains confident that the industry will be able to achieve its goals this year, with over 1.82 million full-time employees bringing $38 billion in industry revenue. However, IBPAP President and CEO Jack Madrid recognized the need to take another look at how emerging technologies like generative AI will affect the industry in the next few years.

“The IT-BPM industry is navigating a complex landscape marked by rapid advancements in technology, shifting global dynamics, and evolving workforce needs,” Madrid said.

For IBPAP, mitigating the potential job losses brought by generative AI will require effective AI governance using a holistic approach centered on four key pillars: Education, Engineering, Enforcement, and Ethics. 

This approach, called the “4E Framework,” hinges on a strong collaboration among industry, the academe, and the government to establish AI literacy initiatives, democratize access to AI resources, and uphold ethical AI implementation.

Addressing the challenges brought by the increasing adoption of generative AI is expected to be the highlight of this year’s International IT-BPM Summit (IIS), which will be held at the Okada Manila on October 2 and 3, 2024. The summit will also tackle other pressing matters for the IT-BPM industry, including talent and skills gaps, cybersecurity threats, and geopolitical uncertainties. 

“At this year’s summit, we are committed to addressing these challenges head-on, from harnessing the potential of AI, to bridging the skills gap, and fortifying our cybersecurity measures,” Madrid emphasized.

Together with industry leaders, policymakers, and stakeholders, this year’s IIS will open discussions on how to overcome these issues and leverage opportunities to keep the Philippines at the forefront of global IT-BPM excellence. EVD

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