AI to Reshape Philippines Labor Market, Making Retraining Urgent

MANILA, Philippines — Artificial intelligence (AI) is poised to displace far more jobs than it creates, making rapid workforce retraining imperative if the Philippines wants to minimize the technology’s disruptive impact, according to an expert. Taiwanese AI expert Kai-Fu Lee said the business process outsourcing (BPO) industry is not the only sector vulnerable to AI, as many digital and cognitive roles across various fields are also at risk. “Anything digital, anything in a closed environment, AI can do better than people. There’s not even room for humans in the loop because that human in the loop creates the inefficiency,” Lee told The STAR. Beyond BPO, he said rapid AI adoption would also affect industries such as banking, insurance, entertainment, software engineering, content creation and even news production. “On one hand, we can be encouraging people that there are opportunities here and there,” Lee stressed. “The reality is AI is getting so good, basically anything digital is going to be taken over by AI.” The accelerated adoption of AI has prompted the country’s information technology and business process management industry to lower its 2028 growth targets. The IT and Business Process Association of the Philippines (IBPAP) now expects the industry to generate between $43.3 billion and $50.5 billion in revenues and employ between 1.85 million and 2.14 million full-time workers by 2028. The revised outlook is significantly lower than IBPAP’s previous roadmap, which projected $59 billion in revenues and 2.5 million full-time employees over the same period. While industries prepare for an AI-driven shift, Lee said the Philippines remains well positioned to adapt and capture new opportunities in the AI era. He stressed that workers do not need advanced programming skills to thrive. Instead, they need to learn how to effectively direct AI systems, ask the right questions and oversee their outputs. “People hear about programming AI and they get scared. They think it requires an MIT (Massachusetts Institute of Technology) degree. It does not. It’s no different than talking to a chatbot,” Lee said. He said retraining would enable more Filipinos to build businesses, develop digital products and manage AI systems, creating opportunities for companies and small enterprises. Lee, however, warned that AI-related jobs are still unlikely to match the scale of those displaced by the technology. For Singapore-based private equity growth platform Ikhlas Capital, the rise of AI has changed how it identifies companies with the potential to scale and adapt. “I think one of the roles we see ourselves is potentially to invest in who drives AI transformation,” Ikhlas chairman and founding partner Nazir Razak told The STAR. “There’s no limit to businesses that can be transformed by AI. Every business has the opportunity,” he added. “It’s about identifying companies where this is the biggest.” Ikhlas, which invests in companies across Southeast Asia and counts former finance secretary Cesar Purisima as a founding partner, is exploring more investment opportunities in the Philippines, including AI-driven businesses.