Philippine BPO Sector Thrives Amid AI Boom, HSBC Reports Resilience

THE Philippine services industry is benefiting rather than suffering from the global artificial intelligence (AI) boom, with AI tools accelerating employment and productivity in the business process outsourcing (BPO) sector, HSBC Ltd. said. In theory, “other business services” such as those offered by the BPO sector should be vulnerable to AI automation, according to HSBC Chief Asia Economist and Co-head for Global Research Asia Frederic Neumann. However, he noted, there has so far been no recorded AI-driven collapse in the Philippines’ services sector. “(T)here has also been no “apocalypse” in services jobs in the Philippines — if anything, employment has accelerated,” Mr. Neumann said in a Sept. 4 report. Mr. Neumann said this resilience may be due to the lagged impact of AI, but may also be largely due to the support AI provides to the BPO industry. “What explains this service export resilience?” he said. “It might be, of course, that AI has yet to make an impact. But, it might also be that AI actually supports BPO to economies like India and the Philippines by making local workers more productive, quality control easier, and remote processing even more feasible.” Based on the report, Philippine export revenue from other business services, particularly the BPO sector, have risen steadily in recent years despite lower growth rates. “Here, too, export revenue from ‘other business services’, mainly from the BPO sector, rose steadily in recent years, with no collapse evident,” Mr. Neumann noted. “True, the growth rate since 2023 has been lower than in the run-up to the pandemic, but the sector is still expanding at a healthy clip — and not stumbling as some might have feared,” he added. The Philippine Statistics Authority reported that services exports rose 6.9% year on year in the second quarter, outpacing the 2.6% growth posted in the first quarter. The Bangko Sentral ng Pilipinas sees services exports growing 3% year on year to $53 billion in 2026, with BPO revenue projected to rise 2.5% to $34.3 billion. — Katherine K. Chan