MANILA — Generative artificial intelligence (GenAI) is expected to enhance rather than displace employment in the Philippine information technology and business process management (IT-BPM) industry in the near term, according to a report by the Bangko Sentral ng Pilipinas (BSP).

In its economic newsletter, the BSP cited consultations with key stakeholders indicating that GenAI is reshaping business operations while highlighting the urgent need for workforce reskilling and upskilling to keep pace with AI-driven demands.

“Amid fears of job replacement and obsolescence, GenAI should be viewed as a tool and a partner that offers infinite potential in enhancing the efficiency of current systems and streamlining processes, providing opportunities for employees and businesses to move up the value chain,” the BSP said.

The IT-BPM sector remains a major pillar of the Philippine economy. As of end-2024, the country held the second-largest share in the global IT-BPM market at 18 percent, behind India’s 40 percent. The industry generated $32 billion in revenues in 2024, accounting for 6.9 percent of GDP, comparable to $34.5 billion in cash remittances from overseas Filipinos (7.5 percent of GDP).

The Philippine BPO workforce grew by seven percent to 1.8 million full-time employees, with 88.5 percent employed in contact center and business process services. BPO earnings rose 1.3 percent year-on-year to $7.2 billion in the first quarter of 2025.

AI adoption is becoming widespread in the sector. A survey by the IT and Business Process Association of the Philippines (IBPAP) showed 67 percent of member firms have incorporated AI tools, including robotic process automation, AI-powered analytics, interactive chatbots, and advanced voice systems that assist agents by summarizing interactions and recommending optimal responses.

Despite concerns over job displacement in repetitive roles, industry data suggest a nuanced impact. Another IBPAP survey in Q4 2024 found 29 percent of AI-using firms experienced no work structure changes, implying AI was used mainly for job augmentation. While 8 percent reported a reduction in employment, 13 percent recorded job gains in areas such as AI fine-tuning, data annotation, and GenAI content creation.

Challenges remain, including a shortage of skilled professionals in GenAI and data analytics, high implementation costs, integration issues with legacy systems, data privacy concerns, and regulatory uncertainty. According to the Technical Education and Skills Development Authority, over one million IT-BPM jobs were unfilled as of May 2025, mostly for web developers, programmers, call center agents, and virtual assistants.

The BSP noted that full-scale GenAI adoption is not expected within the next three years due to scaling and regulatory challenges but emphasized that proper investment in technology and human capital will be critical for the sector to move up the value chain.