Philippine BPOs slash growth goals on AI shift
Philippine information technology and business process management (IT-BPM) firms are bracing for slower revenue growth until 2028, in part due to the rise of artificial intelligence (AI), even as they expect demand for Filipino workers to remain resilient.
At a briefing on Tuesday, the Information Technology and Business Process Association of the Philippines (IBPAP) said it now expects industry revenues to reach between $43.3 billion and $50.5 billion by 2028.
These projections mark a sharp downgrade from the $59-billion target set when the industry association launched its six-year roadmap in 2022. Under that original plan, the IT-BPM sector was also expected to employ 2.5 million workers by 2028.
After midterm review of the roadmap, however, IBPAP also lowered its employment projections to between 1.85 million and 2.14 million workers. These employees must also be “AI-enabled,” the group said.
IBPAP president and CEO Jack Madrid said the revised projections reflect a more “honest” assessment of where the industry is headed.
Explaining the changes, he said the association had to undertake a “roadmap refresh” midway through its six-year plan as rapid advances in AI, slower investment decisions and intensifying competition from other outsourcing destinations reshape the industry.
“In the past three years, the world around us changed. This thing called AI emerged,” Madrid said. “The future of the industry remains promising, but how we continue to grow will change.”
Despite the lower targets, Madrid said AI has yet to trigger the widespread job losses many had feared.
“I think AI is a real development, but I think we have not really seen it scale yet,” he said. “It has affected some jobs, but based on all the members we’ve talked to, the entry-level jobs that some of the AI trials have affected, those employees have been able to be redeployed.”
Madrid said that while the Philippines remains the world’s second-largest IT-BPM destination behind India, it now faces stiffer competition from countries such as South Africa, Egypt, Poland, Colombia, Costa Rica and Vietnam.
And while investor interest in the Philippines remains strong, geopolitical uncertainties have prompted companies to take longer before deciding where to expand, he added.
“All the macroeconomics, all the geopolitics caused many of our buyers and investors not to stop, but it made them make their decisions slower on where to make the investments,” Madrid said.
Even with those headwinds, IBPAP expects the industry to post another year of growth, projecting revenues of $42.3 billion and employment of 1.96 million workers by the end of 2026. By comparison, the sector closed 2025 with more than $40 billion in revenues and 1.9 million workers.
