The Philippines can capture a larger share of the global artificial intelligence (AI) boom by capitalizing on its established semiconductor hardware sector amid tight global capacity, according to British banking giant HSBC.

Frederic Neumann, HSBC chief Asia economist and co-head of global research for Asia, said global semiconductor supply chains are currently running at full capacity, leaving ample room for the domestic chip sector to expand.

“There is, in fact, not enough capacity globally for any type of semiconductors at the moment. So testing, assembly, and packaging—all of that needs to expand quite aggressively. And there’s an opportunity there for the Philippines to grab a bigger share,” Neumann said during a media roundtable on Tuesday, Aug. 18.

Building on this foothold in hardware manufacturing, HSBC pointed to the domestic economy’s services sector as a key anchor for benefiting from the global AI cycle. Neumann pushed back on the likelihood of automation fully displacing workers.

“Everybody talks about AI and how it is dominating the world economy, how it is a dominant force behind United States (US) growth, regional supply chains, and semiconductors,” Neumann said.

“It’s interesting to think about what this means for the Philippines. Our sense is that, actually, the business process outsourcing (BPO) industry is holding up very, very well in the face of AI,” he added, noting that the local industry is “reinventing itself” as a bright spot for job creation.

HSBC Philippines President and Chief Executive Officer (CEO) Sandeep Uppal echoed this optimistic outlook for services, emphasizing a shift toward high-value roles. Global capability centers, he noted, are expanding across the market to offer value-added innovation.

“What surprises me is that [global capability centers] are not the traditional BPOs. They’re here for your more value-added innovation, marketing, and analytics. So that gives a lot of hope,” Uppal said.

Uppal also stressed the importance of keeping humans “in the loop” of AI workflows, adding that the goal is to ensure those workers are Filipinos.

His remarks come amid discussions surrounding the proposed Pax Silica Initiative’s mega AI industrial hub in New Clark City. Infrastructure of this scale requires localized data centers—what Neumann described as “enabling infrastructure” that allows BPOs to integrate AI models without operational delays.

On output, Neumann expressed confidence that AI could serve as a sustained growth engine. “AI may actually offer opportunities to grow faster. And so, we see AI as an opportunity even for the Philippine economy in the coming years,” he said.

Over the last six months, HSBC assesses that domestic economic expansion remains intact.

“While growth rates may have come off, fundamentally, there’s nothing wrong with the economy. It’s gone through a stress test in the last six months. So that aspect, I think, is very important for everyone to grasp,” Uppal said.

Gross domestic product (GDP) growth averaged 2.6 percent in the first half of 2026 after plunging to its weakest post-pandemic pace in the second quarter. HSBC expects the local economy to reach 4.8 percent in 2027, trailing the government's minimum target of five percent.