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Philippine BPO Industry Still Growing Despite AI Boom, But Future Targets Revised Down

The Economist reports that the Philippines' massive outsourcing industry continues to grow in both revenue and employment, as AI reshapes workers' roles rather than replacing them entirely.

The Economist reports in an analytical piece that the Philippines' outsourcing industry, known as BPO (business process outsourcing — hiring external companies to handle business tasks such as call centers, customer service, and administrative work), continues to grow better than many had predicted, even as AI technology becomes a major force in the global industry.

Figures for 2026 indicate the industry is expected to generate combined revenue of around US$42 billion and employ nearly 2 million people, making it one of the country's economic pillars. BPO has been seen as the industry most vulnerable to disruption by AI, since most of its work can be automated, but what has actually happened has turned out differently.

The report explains that AI is being used as an "intelligence multiplier" rather than a replacement for humans. In other words, AI helps employees perform complex tasks faster and with higher quality, rather than taking over their jobs wholesale, allowing each worker to handle more work and the industry as a whole to keep expanding.

However, the overall picture is not entirely rosy. The IT and Business Process Association of the Philippines (IBPAP) has revised down its 2028 revenue and employment targets from its original plan, now aiming for revenue of US$43–50 billion, citing the impact of AI, slowing investment, and intensifying competition from other countries.

The clearest risk lies in entry-level jobs, such as data entry and basic administrative work, which are highly likely to be replaced by automation, reducing opportunities for hiring new workers in this segment. Meanwhile, the World Bank's World Development Report 2026 also notes that the Philippines is among the countries most affected by AI, due to its heavy reliance on the BPO industry.