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Manila Bulletin devider Business devider The Economy devider AI threatens call center jobs despite Philippines' global success—World Bank

AI threatens call center jobs despite Philippines' global success—World Bank

Country emerges as global leader in digital delivered services amid growing AI adoption

Published Dec 1, 2025 12:00 am
Amid emerging risks from growing artificial intelligence (AI) adoption, especially on jobs, the Philippines has solidified its position as a major global hub for digitally delivered services (DDS), according to a World Bank Group (WBG) report.
In a case study of its Digital Progress and Trends Report 2025 titled “Co-worker, Coach, or Competitor? How AI Is Transforming the Future of Digital Delivered Services,” the WBG noted that the Philippines is a “mature lower-skilled exporter,” with DDS exports soaring from $4.2 billion in 2005 to $29.4 billion in 2023, driven by foreign direct investment (FDI)-friendly policies and strong demand from the United States (US).
“The sector employs about 1.82 million workers—around 3.7 percent of all jobs in the Philippines—with 1.6 million in contact centers, representing roughly 40 percent of the global customer experience management workforce,” read the report published on Nov. 26.
In the Philippines, the report noted that most contact center companies are foreign owned, with many successful local firms eventually acquired by foreign investors. The strong foreign presence has been driven by long-standing policies such as the Special Economic Zone Act of 1995, which offers tax incentives, and the Foreign Investments Act of 1991, which has allowed 100-percent foreign ownership in certain domestic enterprises since the 1990s.
While this has boosted FDI and supported skills development and global competitiveness, the report warned it also limits local reinvestment as profits are sent abroad, reduces domestic control over business decisions, and makes the industry more vulnerable to policy and global economic changes due to its heavy reliance on the US market.
“A smaller share of jobs is found in higher-skilled, higher-value-added segments such as specialized services, IT [information technology] services, and creative digital services,” the report said, noting that in the 1980s, international companies set up captive centers in the Philippines, creating jobs in back-office support, healthcare services, and IT development. The country has also attracted advanced roles.
The report highlighted that GenAI adoption in the Philippines outpaces many of its regional peers, making the country more exposed to AI-driven job displacement, particularly in the services sector. As of March 2024, ChatGPT usage in the Philippines averaged 1.67 monthly visits per internet user—nearly four times the global average.
“This figure places the Philippines closer to global GenAI leaders such as Singapore (2.2), highlighting its strong engagement with AI tools. Moreover, more than 40 percent of employment in the Philippines consists of routine cognitive and manual tasks vulnerable to automation. Among East Asian peers, the country sits in the middle to upper range for such routine-intensive work, with the second-largest share of routine workers in the service sector after Malaysia,” the report added.
The report stressed that the Philippines faces a higher-than-expected risk of AI-driven job displacement for its income level, despite being a middle-income country.
“Two-thirds of digital services exporting firms in the Philippines report actively implementing AI, but just one-quarter say they have observed a shift in jobs structure,” the report said.
“To accelerate responsible AI adoption that preserves jobs and keeps more value creation in the Philippines, firms say they need rapid reskilling support and clearer data and AI governance,” it added.
The report further stressed that the Philippines is a global leader in the contact center and business process management (BPM) industry, accounting for around 75 percent of clients based in the US, while the rest are evenly distributed across Europe and the Asia-Pacific region. The sector said it employs approximately 1.6 million people and generated around $32 billion in revenue in 2024.
“The most mature services are voice- and non-voice-based contact center functions, which include customer support hotlines, technical and IT support help desks, and telemarketing and sales calls. Emerging services include HR [human resource] management and finance and accounting support,” it said, noting that some leading firms in the Philippines are TTEC, Concentrix, Cognizant, Teleperformance, Alorica, Accenture, and Wipro.
The report said contact centers are using AI to train agents faster and reduce turnover, boosting efficiency and client engagement.
However, “increased reliance on software over human labor improves cost competitiveness but risks moving businesses away from the Philippines to more established software development hubs,” it said.
It further said that while the Philippines’ contact center industry is boosting competitiveness by adopting AI and software solutions that cut costs, if these technologies are developed or hosted abroad, much of the economic value could flow out of the country, limiting the local benefits of outsourcing revenue.
For a “mature, lower-skilled exporter... such as the Philippines,” the WBG recommended investing in efforts to build a comparative advantage in higher-skilled services. It urged the government to tap the network of global firms operating in the country to identify potential high-skill subsectors within digital DDS, provide incentives for companies to develop capabilities in these areas, and ensure sustained worker upskilling to meet industry needs.
The report also urged the Philippines to build local AI capabilities and improve workforce adaptability. It recommended investing in AI training for workers, developer programs, and research to strengthen the country’s capacity to support DDS exports. In the short term, it called for strengthening high school curricula to develop basic logic skills and familiarity with AI tools, laying the foundation for future upskilling into higher-skilled, AI-enabled jobs.
The WBG also called on the Philippines to strengthen its digital infrastructure by improving connectivity and the overall business environment. These measures, the report said, are essential to attract investments in higher-skilled DDS and to reduce reliance on low-value exports.
(Ricardo M. Austria)
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