AI adoption to mitigate impact of any slump in IT-BPM industry on broader economy — AMRO

THE information technology and business process management (IT-BPM) industry must embrace artificial intelligence (AI) to mitigate any impact of an industry slowdown on the broader Philippine economy, the ASEAN+3 Macroe-conomic Research Office (AMRO) said.

In a commentary issued Dec. 10, AMRO former associate economist Zhan Guo noted that the Philippine IT-BPM industry’s continued reliance on legacy outsourcing operations is a risk to Philippine employment, consumption and growth.

According to AMRO, contact center services accounted for 83% of industry revenue and 89% of its employment last year.

“Beyond potential job displacement, uneven AI adoption could exacerbate skill mismatches and labor market inequality, particularly between traditional business process outsourcing workers and higher-skilled professionals whose tasks are more complementary to AI application,” Ms. Guo said.

“Given the sector’s size and importance, such disruptions could have macro-critical spillovers on growth, employment, and consumption,” she added.

Still, she said the industry can integrate AI in data analytics and healthcare services to improve productivity and expand business opportunities.

“AI, therefore, is both a disruptor and a catalyst to the IT-BPM sector of the Philippines,” Ms. Guo said. “While it challenges the established business models, AI also opens the door to more complex, innova-tion-driven functions, provided that firms and workers can adapt swiftly.”

Ms. Guo added that IT-BPM should invest in human capital, infrastructure, innovation, and regulatory reform to ensure it does not lag its global competitors.

“Scaling up reskilling and upskilling programs, including those under the Trabaho Para sa Bayan Act, will be essential for short-term workforce adaptation,” she said. “Over the medium term, strengthening STEM and soft skills education will reinforce readiness for emerging roles.”

On infrastructure, Ms. Guo said the government must enhance broadband connectivity, lower utility costs, and broaden research and development initiatives between the industry and academia.

Since 2022, the industry has generated 450,000 jobs and $10.5 billion in revenue, according to IT & Business Process Outsourcing Association of the Philippines (IBPAP) President and Chief Executive Officer Jonathan R. Madrid.

IBPAP targets $42 billion in export revenue and staffing of 1.97 million next year. — Katherine K. Chan