AI slowly taking over IT-BPM sector in Philippines

MANILA, Philippines — Over 60 percent of information technology-business process management (IT-BPM) firms in the country are already using artificial intelligence (AI) in their operations, but only eight percent have reported a decline in the workforce due to the use of the new technology, according to the Information Technology and Business Process Association of the Philippines (IBPAP).

Speaking at the International IT-BPM Summit 2024 yesterday, IBPAP president Jack Madrid said that based on the group’s survey conducted this year, 67 percent of their members are actively implementing AI initiatives in various functions including customer support, data entry and processing, workforce management and sales and marketing.

In terms of the impact of AI on jobs, he said eight percent reported a reduction in the workforce.

On the other hand, 13 percent reported headcount gains.

For the remainder of the respondents, Madrid said jobs have not been affected by AI.

While AI is expected to affect some jobs particularly those involving repetitive and routine tasks, he said the new technology is not negatively affecting the industry as what many may be expecting.

“The impact of AI on operations has been mostly positive, with companies reporting improvements in productivity, operational efficiency, service quality and revenue generation,” Madrid said.

In terms of the outlook, he said the IT-BPM industry is expected to end the year with $38 billion in revenues and a workforce count of 1.82 million.

While these projections surpass the baseline targets under the industry roadmap, Madrid said these are below the sector’s most ambitious goals.

The outlook represents a seven percent growth rate from the $35.5 billion worth of revenue and 1.7 million headcount in 2023.

The aggressive target is to generate $40 billion in revenues and increase the headcount to 1.84 million employees this year.

Madrid said the industry faces several key challenges with talent and skills gap being the most critical.

The group’s survey showed addressing the talent gap, especially in advanced digital skills like Al, data analytics and programming, remains the top concern as cited by 21 percent of the respondents.

Intensifying global competition is also a key challenge with countries like South Africa, Colombia, Egypt and Poland now rapidly advancing their IT-BPM industries.

Madrid said this puts pressure on the Philippines to innovate and maximize its strengths in language proficiency, cultural adaptability and technical expertise to maintain its competitive edge.

Madrid also cited high operational costs and the ease of doing business as challenges faced by the industry.

“Reducing healthcare expenses and streamlining other operational costs will be important in regaining competitiveness,” he said.

Despite challenges, Madrid expressed confidence in the industry’s ability to continue to innovate and adapt to new opportunities.

The IT-BPM roadmap has set an aggressive target of reaching 2.5 million jobs and $59 billion worth of revenues by 2028.

Madrid said the roadmap’s targets would be reviewed next year.