How Rapid AI Adoption in the Philippines’ Call Centers Could Jeopardize Its Economy

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As a seasoned analyst with over two decades of experience observing global economic trends, I have witnessed firsthand the profound impact of technological advancements on industries and labor markets. The story of the Philippines’ BPO sector, as reported by Saritha Rai for Bloomberg News, resonates deeply with my professional journey.

As per a report by Saritha Rai for Bloomberg News, the Philippines is now grappling with the effects of Artificial Intelligence (AI) on employment, notably within its expansive business process outsourcing (BPO) sector. This sector, encompassing call centers and numerous other backend services, is projected to rake in more than $38 billion this year. The swift adoption of AI technology across the sector is primarily fueled by the same cost-saving motivations that previously prompted job outsourcing to the Philippines, and it’s starting to significantly transform the industry.

According to the data, AI “assistants” have been widely adopted in numerous Business Process Outsourcing (BPO) companies recently, especially within call centers. These AI systems aid human operators by carrying out tasks like summarizing customer conversations, processing information, and instantly evaluating emotions. This tech is mainly employed for customer service positions but signifies a wider shift happening throughout the entire BPO sector.

Nevertheless, Bloomberg emphasizes that this transformation has been disconcerting for some employees. For instance, Christopher Bautista, a 47-year-old call center veteran with close to two decades in tech support, found himself on an unpaid “floating status” when his company lost a contract. He believes this was due to the advancement of AI. Eventually, he left the industry and moved into sales. However, Bautista remains firm in his belief that AI will soon eliminate many jobs within the Business Process Outsourcing (BPO) sector.

In essence, while instances similar to Bautista’s are currently rare, there is a concern that they could become more frequent. A company called Avasant, often referenced in Bloomberg, predicts that around 300,000 call center jobs in the Philippines, many of which belong to the Business Process Outsourcing (BPO) sector, could be replaced by AI within the next five years. However, this shift might also generate approximately 100,000 new roles focused on areas like algorithm training and data management. This double-edged effect presents both a potential threat and an opportunity for the entire Philippine BPO industry as a whole.

Bloomberg emphasizes the crucial role of Business Process Outsourcing (BPO), specifically call centers, in the Philippine economy, being its largest private sector employer and a substantial contributor to the country’s GDP. For numerous Filipinos and Filipinas, jobs in BPO provide a good income without demanding a university degree or overseas work. Bloomberg highlights that the government anticipated this sector would assist in elevating more citizens into the middle class and foster the growth of additional white-collar positions. However, the emergence of AI poses a risk to these plans.

In spite of these hurdles, Bloomberg indicates that the Philippines is embracing AI rather than avoiding it. Already a trial site for numerous innovative AI technologies, the government has set up an AI research center and initiated several training programs to enhance the skills of the industry’s 1.7 million workforce.

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2024-08-28 09:28