In late 2024, a business process outsourcing company in Bacolod — a southern Philippine city known for sugarcane and smiles — armed its contact center with cutting-edge AI solutions. Days later, over 120 workers were fired.

That cold jolt captured the fear now gripping the country’s prized cash cow: the BPO industry. This sector doesn’t just employ close to a million Filipinos — it injects $38 billion straight into the national economy every year.

For the past two years, BPO firms in the Philippines have chanted the mantra of “upskilling.” But talk is all it’s been, says Emmanuel D. David, co-convener of the Alliance of Call Center Workers. In a quote to BusinessWorld, he said companies have stopped training their staff altogether.

Now, the government is stepping in. “We’ve set aside enough funding to retrain 340,000 workers,” declared President Ferdinand Romualdez Marcos. But that’s just the start. The administration is aiming to upskill 1 million BPO workers by 2028.

The Philippines is home to 2,200 BPO of various size. They employ roughly 849,000 workers, each earning roughly ₱440,000 a year — about $7,800 in U.S. dollars.

The industry’s main lobby group, the IT and Business Process Association of the Philippines, says that 135,000 jobs were added in 2024 alone.

The Upskilling Dilemma

According to President Marcos, departments like DepEd and TESDA have been tasked with executing this strategy. Bootcamps and training programs are in the pipeline, aimed at helping workers transition into roles involving AI operation.

The government is even pushing to integrate AI and digital skills into the national curriculum. There’s talk of training new graduates in areas like cybersecurity, AI integration and data analytics.

But this is easier said than done. There is already a critical shortage of educators proficient in AI, as the technology is new to all.

Kaveh Vahdat, President of San Francisco-based RiseOpp, worked with several BPOs in the Philippines.

Kaveh Vahdat, president of San Francisco-based RiseOpp — which has partnered with several Philippine BPOs — calls this pivot logical. AI, he says, is rapidly eroding repetitive job roles.

Vahdat argues the Philippines has an edge over Latin America in this transition. “The Philippines boasts workforce adaptability, Western cultural alignment, and strong English proficiency — key advantages in an AI era where prompting, contextual grasp, and human-AI collaboration are essential.”

Vahdat suggests the country focus on upskilling in higher-value services — especially complex support, AI supervision and data interpretation. Prompt engineering and AI model interaction, he says, must be a priority.

“As AI systems increasingly depend on human input to refine relevance and quality, prompt engineering becomes the bridge between tech capability and user communication,” Vahdat said.

Still, he admitted: “The fear of AI taking away outsourcing jobs is real in the Philippines.”

That fear is rooted in hard truth. Chatbots, AI voice assistants, and self-service platforms have already replaced scores of frontline support roles, especially in basic query handling.

The BPO sector is clearly shifting — from labor-heavy to tech-driven.

In a recent webinar, a senior official from BMI (a Fitch Group unit) warned that the Philippine BPO sector may shrink as companies adopt AI. He also suggested AI could drive a wave of “reshoring” — bringing outsourced jobs back to developed countries at lower cost.

There’s no doubt AI will augment workers. But it’s unclear whether the current upskilling programs can preserve the sheer volume of BPO jobs.

Even if some workers rise into higher-value roles, overall demand for human labor in voice support and routine tasks is declining.

And “more complex” doesn’t mean “safe.” As AI advances, even mid-level tasks — summarizing feedback, resolving nuanced complaints — are at risk of automation.

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