By Wu Hsiang-yuan 吳象元 / The News Lens – AI illustration image.
TAIPEI — Artificial intelligence is poised to significantly reshape the Philippines’ call center industry, with experts warning that automation could replace a large share of routine customer service jobs within the next decade.
In a recent column published in the Philippine Star, Brian Poe Llamanzares cautioned that without a clear national AI strategy and workforce transition plan, the country risks rising unemployment and declining competitiveness—particularly in its globally dominant business process outsourcing (BPO) sector.
The Philippines became a major outsourcing hub between 2000 and 2010, leveraging widespread English proficiency and familiarity with Western markets. At its peak, the country hosted around 2,200 outsourcing firms providing services such as customer support and data processing.
However, a February report by the International Labour Organization (ILO) found that approximately 12.7 million jobs in the Philippines—more than a quarter of total employment—could be affected by AI, the highest proportion among ASEAN countries. Some firms in the knowledge process outsourcing (KPO) and BPO sectors have already shut down amid automation pressures.
Research firm Gartner estimates that by 2029, AI will autonomously handle up to 80% of common customer service inquiries, raising concerns about the long-term viability of traditional call centers.
Ralf Ellspermann, a senior consultant with experience in the Philippine outsourcing sector, said the industry is undergoing structural transformation. While early call centers relied on employees reading scripted responses, he expects that by 2030, AI will be able to handle up to 85% of routine interactions, leaving only complex or emotionally sensitive cases for human workers.
“These roles will shift toward AI-augmented specialists,” Ellspermann said, adding that while the traditional model may decline, higher-value roles are likely to emerge.
The Philippines’ IT and business process management (IT-BPM) sector remains a major pillar of the economy, generating US$38 billion in 2024 — about 8% of GDP — and employing 1.8 million people, or 3.8% of the workforce. Output is expected to reach US$40 billion in 2025.
To address the impact of AI, in February, the Philippine Senate introduced measures aimed at strengthening the sector, particularly by shifting demand toward higher-value skills as labor-intensive roles decline.
Senator Risa Hontiveros said technological change would have broad social impacts, stressing the need to redefine the role of workers. “They are not replacements for machines, but essential managers of them,” she said.
As AI systems increasingly handle frontline customer interactions, traditional call center roles may evolve into positions such as AI data annotators and quality analysts, supporting the development and oversight of automated systems.
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