‘GenAI reshaping IT-BPM industry’

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January 4, 2026 | 12:00am

BSP warns of urgent need for reskilling

MANILA, Philippines — Generative artificial intelligence (GenAI) is expected to augment rather than displace jobs 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 an economic newsletter, the BSP said findings from consultation meetings with key stakeholders indicate that GenAI is reshaping business operations while underscoring the urgent need for workforce reskilling and upskilling to keep pace with rapidly evolving, 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 industry 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 share.

The sector continues to be a key source of foreign exchange, generating $32 billion in revenues in 2024, equivalent to 6.9 percent of gross domestic product, comparable to the $34.5 billion in cash remittances from overseas Filipinos or 7.5 percent of GDP.

The earnings of the Philippine business process outsourcing (BPO) sector also grew by 7.7 percent to around $32 billion in 2024 from $29.7 billion in 2023, while the IT-BPM workforce expanded by seven percent to 1.8 million full-time employees.

Of the total, 1.6 million workers or 88.5 percent were employed in contact center and business process services. In the first quarter of 2025, BPO earnings rose by 1.3 percent year-on-year to $7.2 billion.

Amid these gains, AI adoption is becoming increasingly widespread. A survey by the IT and Business Process Association of the Philippines (IBPAP) showed that 67 percent of IT-BPM member firms have incorporated AI tools into their operations. These include robotic process automation, AI-powered analytics, interactive chatbots and advanced voice systems that assist agents by summarizing interactions and recommending optimal responses.

Still, concerns persist over potential job displacement, particularly for roles reliant on repetitive or routinary tasks. But industry data suggest a more nuanced impact.

Another IBPAP survey in the fourth quarter of 2024 found that 29 percent of firms using AI tools did not experience any shift in work structure, implying that AI was used mainly for job augmentation.

While eight percent of firms reported a decrease in employment due to AI adoption, 13 percent recorded job gains driven by new roles such as AI fine-tuning, data annotation and GenAI content creation.

Despite the opportunities, challenges remain. The BSP noted a shortage of skilled professionals, particularly those with expertise in GenAI and data analytics, alongside high implementation costs, integration issues with legacy systems, data privacy concerns and regulatory uncertainty.

According to the Technical Education and Skills Development Authority, the IT-BPM sector had a supply gap of over one million unfilled jobs as of May 2025, mainly for specialized roles such as web developers, programmers, call center agents and virtual assistants.

While full-scale GenAI adoption is not expected within the next three years due to scaling and regulatory challenges, the BSP said GenAI should be seen as a partner that can enhance efficiency and streamline processes.

Proper investments in technology and human capital will be critical in allowing the IT-BPM industry to move up the value chain amid rapid technological change.