ASEAN
06 September 2026
Artificial intelligence and the Philippines
The Philippines faces distinct challenges from Artificial Intelligence.
The Philippine economy is somewhat different from Asian economies of similar levels of development. It is dominated by services which account for some 60 percent of employment, while agriculture and industry represent around 20 percent each of national employment.
Within the service sector is business process outsourcing (BPO) which includes services for call and other contact centres, back office, data transcription animation, software development, engineering, and digital content. The Philippines holds a significant portion of the global outsourcing market, estimated at 15 percent.
While BPO sector employees only make up about 3 percent of the total workforce, the size of its revenues is important at 7.4 percent of GDP, similar in magnitude to migrants’ remittances. Accenture and Concentrix are the industry giants for the Filipino BPO sector.
Research by the International Monetary Fund (IMF) suggests that the BPO sector is the most exposed sector of the economy to the impact of Artificial intelligence (AI). Further, the nature of work will also be impacted by AI.
Looking more broadly at the economy, the IMF estimates that a substantial proportion of the Philippine labor force will be impacted by AI. Around one-third of workers are highly exposed to AI with around sixty percent of those also rated highly complementary, indicating potential productivity gains. The IMF also finds that college-educated, young, urban, female, and well-paid workers in the service sector are most exposed.
To harness the opportunities and mitigate the risks presented by the rollout of AI, the IMF offers a number of recommendations. First, more investment in digital infrastructure, as the quality and reach of the digital infrastructure are uneven. Second, enhancing human capital through education and training programs is essential by including AI and related subjects, and focussing on upskilling the current workforce. Third, strengthening social protection systems to support workers during transitions, such as unemployment insurance.
The Philippine government recognises the transformative potential of AI, and has a National AI Strategy Roadmap which outlines a strategic vision for integrating AI across various sectors to boost competitiveness, foster R&D collaboration, and prepare the workforce for future jobs while ensuring responsible AI governance.
Nonetheless, “challenges persist, including regulatory gaps, inadequate infrastructure, workforce reskilling needs, and limited AI adoption due to cost concerns”. Addressing these issues will be crucial for the Philippines to fully leverage AI's economic and societal benefits.
Within the service sector is business process outsourcing (BPO) which includes services for call and other contact centres, back office, data transcription animation, software development, engineering, and digital content. The Philippines holds a significant portion of the global outsourcing market, estimated at 15 percent.
While BPO sector employees only make up about 3 percent of the total workforce, the size of its revenues is important at 7.4 percent of GDP, similar in magnitude to migrants’ remittances. Accenture and Concentrix are the industry giants for the Filipino BPO sector.
Research by the International Monetary Fund (IMF) suggests that the BPO sector is the most exposed sector of the economy to the impact of Artificial intelligence (AI). Further, the nature of work will also be impacted by AI.
Looking more broadly at the economy, the IMF estimates that a substantial proportion of the Philippine labor force will be impacted by AI. Around one-third of workers are highly exposed to AI with around sixty percent of those also rated highly complementary, indicating potential productivity gains. The IMF also finds that college-educated, young, urban, female, and well-paid workers in the service sector are most exposed.
To harness the opportunities and mitigate the risks presented by the rollout of AI, the IMF offers a number of recommendations. First, more investment in digital infrastructure, as the quality and reach of the digital infrastructure are uneven. Second, enhancing human capital through education and training programs is essential by including AI and related subjects, and focussing on upskilling the current workforce. Third, strengthening social protection systems to support workers during transitions, such as unemployment insurance.
The Philippine government recognises the transformative potential of AI, and has a National AI Strategy Roadmap which outlines a strategic vision for integrating AI across various sectors to boost competitiveness, foster R&D collaboration, and prepare the workforce for future jobs while ensuring responsible AI governance.
Nonetheless, “challenges persist, including regulatory gaps, inadequate infrastructure, workforce reskilling needs, and limited AI adoption due to cost concerns”. Addressing these issues will be crucial for the Philippines to fully leverage AI's economic and societal benefits.