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AI disrupts Philippine labor market as experts warn of ‘existential’ job crisis
GOOD, BAD NEWS
RETROSESOS | DREAMSTIME.COM
ON AI AND PHL JOBS
Proportion of Jobs Potentially Affected by Generative AI
RTIFICIAL intelligence (AI) is no longer a distant disruptor on the horizon. It is a present force, steadily transforming labor markets worldwide—and for the Philippines, that transformation may come at an overwhelming cost. Speaking at a recent forum organized by the University of the Philippines’ Center for Integrative and Development Studies, digital governance advocate Professor Emmanuel Lallana, Novare Technologies Chief Technology Officer Dr. William Emmanuel Yu, and UP President Angelo Jimenez said the Philippines must urgently retool its workforce. Otherwise, they warned, AI-driven job losses could erode national competitiveness— and viability. “This is not a hypothetical discussion,” said Yu. “There are three areas where, clearly, AI—or at least this generation of AI—has already displaced jobs.”
Displacement already under way
WITH advances in generative AI technologies, particularly those built on generative pre-trained transformers (GPT), machines can now autonomously generate outputs once reserved for human professionals. Citing International Labour Organization (ILO) data, Dr. Lallana said that 33 percent of jobs in the Philippines are highly exposed
to AI, and 14 percent face no complementarity with it. “That’s the built-in danger,” Lallana said. “Up to 14 percent of our total workforce could be automated out as AI becomes more integrated into the economy.” Yu cited the demise of rote research roles, once filled by entrylevel workers, now replaced by AI tools with “perfect recall” and data processing capabilities. Jimenez, a lawyer, remarked that even in legal work, libraries are considered “dinosaurs,” with solo practitioners already relying on AI for quick jurisprudence searches. “The AI does that well—it’s a very perceptive search engine,” Yu added. Creative fields are also being disrupted. Repetitive tasks in content and media production, such as concept page layouting and storyboard framing, are now easily handled by AI tools. “Those jobs are gone,” Yu said.
BPO industry in the crosshairs
THE Business Process Outsourcing (BPO) sector—one of the economy’s most critical engines—was
Occupational Al Exposure and Complementarity (In percent of employed) 35 30 25 20 15
BM Graphics: Ed Davad
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What is the most important impact of AI on jobs? Create new opportunities 18% Optimize job functions 43% Eliminate certain roles 19%
singled out as particularly vulnerable. While BPO workers comprise just 3 percent of the national workforce, they generated over $35 billion in revenue last year, or 7 percent of GDP. But that strength is under strain. “Post-call summaries, customer feedback logs, and even parts of customer service are now being handled by AI faster,” Yu said. “We estimate that 25 percent of callcenter activities are technically automated and those jobs obsolete.” Large BPO firms are also using AI to monitor call pitch, tone,
and use of positive language. Productivity pressures have intensified: where agents previously had 200 seconds to resolve a call, new benchmarks demand the same output in just 170 seconds. One major firm, Lallana noted, projects a net loss of 300,000 jobs in the BPO industry over the next five years—offset by only 100,000 new positions, many in lower-paying, short-term roles like algorithm training or AI moderation. More disruptive still is the rise of “agentic AI”—systems that can make decisions and act inde-
Reshape existing positions 20%
Source: Stage 4 Solutions, “AI and the Workforce: Perspectives on Job Impact”
pendently. Lallana explained that while chatbots tend to give general answers from limited databases, agentic AI draws from vast data sets to respond to more specific, individual concerns. “If agentic AI lives up to its potential, it could wipe out the callcenter agent industry in the Philippines,” he said.
es le s or s io ns t ure t r ad d sa p at e r at ic ul n u p r a c o g c s a e o hin v i ce le d ar y S er Sk i l ent M ac m e El Sources: Philippine Statistics Authority; and IMF staff calculations IMF Country Report No. 24/351
Gig work’s global downshift
THE forum also tackled the gig economy, where over 2 million Filipinos now work as virtual assistants, digital marketers, designers, and IT or customer support staff. AI has lowered barriers to entry, matching freelancers with global clients more efficiently. But it has also triggered a “race to the bottom” in wages, Lallana said. He cited how in 2017, Filipino freelancers could earn up to $200 a week. By 2021, when platforms expanded to India and Venezuela, project fees dropped from $10 to under $0.01. “International clients simply pick the lowest bidder,” he said. “This undermines income stability, quality, and career growth.” For full-time Filipino freelancers, the confluence of AI automation and global price competition presents an increasingly precarious future. Continued on A2
PESO EXCHANGE RATES n US 56.2810 n JAPAN 0.3883 n UK 76.8348 n HK 7.1727 n CHINA 7.8477 n SINGAPORE 44.1489 n AUSTRALIA 36.9822 n EU 66.1808 n KOREA 0.0414 n SAUDI ARABIA 15.0074 Source: BSP (July 4, 2025)