How is the Philippines Upskilling its BPO Workforce for AI in 2026? Transforming Disruption into Business Value

The Philippine information technology and business process management (IT-BPM) industry must confront the immediate threat of artificial intelligence (AI) to maintain its global edge.

This requires leveraging the strength of its workforce while implementing comprehensive structural reforms and diversification strategies.

The Global IT services outsourcing market is valued at about $462.10 billion in 2026, based on a March 2026 report by Coherent Market Insights. The offshore outsourcing segment is expected to hold the largest share of the market in 2026, leveraging Asia-Pacific talent and cost efficiency for global IT delivery.

“I don’t have a crystal ball. I’m just seeing what my clients and what companies are already doing,” said Jeff J. Hunter, founder of VA Staffer, which fields Filipino virtual assistants (VAs) to individuals and businesses from overseas that need them.

One AI agent can answer 1,800 concurrent calls with perfect English, he said on December 2025.

“The price of AI interference [AI encroachment on traditional labor] is going down dramatically,” he said over Zoom. “Right now, people are saying, ‘Do I really need to hire a person, or can we make Joey from Accounting – whose job is being taken over by AI – do something else?’”

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Humans amplify outcomes in the age of AI.

"AI success ultimately depends on people, but most organizations are still investing primarily in the technology," Byron Beebe, CEO of Human Capital for AON, a global professional services firm.

"That disconnect is where opportunity is lost," he said in a 2026 AON study on human capital trends.

The Philippines’ services exports reached $51.98 billion, and its services imports $37.40 billion, netting a services trade surplus of about $14.58 billion, according to 2024 data from the United Nations Trade & Development. Other services like business process outsourcing (BPO) made up 64.8% of the total services exports category in the same year.

The largest adopters of IT-BPM services, of which BPO is a part, are North America at 37-41%, Europe at 35-39%, and Asia Pacific at 16-20%.

The International Monetary Fund (2025) said about 3% of Philippine workers are in BPO roles where low AI complementarity—meaning the technology replaces rather than assists the human—poses a displacement risk.

The BPO sector's contribution to the economy accounted for 8% of the Gross Domestic Product in 2025, which means “changes within this industry are macro-critical and may have spillover effects on the broader economy.”

The industry is equipping both current and future IT-BPM professionals with stronger capabilities to position the workforce for higher complexity, AI-enabled roles, according to Jack R. Madrid, president and CEO of the IT and Business Process Assocation of the Philippines (IBPAP), the main association of the country’s IT-BPM sector. 

Investments in skills development increase as companies embed AI into workflows and strengthen core competencies across their organizations. 

Among these efforts is Project UNLAD (Uplifting National Labor through Advanced Digital Upskilling), a P740-million initiative developed in partnership with the Department of Information and Communications Technology and the Technical Education and Skills Development Authority (TESDA) to equip industry talent with future-ready skills. 

IBPAP also works with the Commission on Higher Education and the Department of Education to scale upskilling efforts across the broader talent pipeline, Madrid said in an April 30 email.

Maintaining the country’s competitiveness in services requires upskilling its manpower to become AI-fluent, said Philippine Economic Zone Authority (PEZA) Director General Tereso O. Panga.

The government agency's AI Tech Academy launched in Cebu in January 16, 2026. Founded in partnership with tech talent platform StackTrek and IBPAP, it is the first TESDA-accredited AI facility.

The academy ensures Filipinos are not displaced by technology but empowered by it, Panga emailed on April 28.

"PEZA envisions ecozones where factories become smart factories; BPOs evolve into KPOs [Knowledge Process Outsourcing of high-value, specialized expertise] and digital services hubs; and where startups, locators, and innovators collaborate to build next-generation solutions anchored on Filipino excellence,” he said.

PEZA will likewise initiate a multipartite agreement with TESDA, StackTrek, and IBPAP for the academy's nationwide roll-out, in partnership with ecozone-hosting local governments, Knowledge, Innovation, Science, and Technology (KIST) park developers, and colleges and universities.

This is to ensure the steady flow of AI-proficient workforce for the ecozone industry.

Hunter, who started his business in 2014 by outsourcing some of his job responsibilities to a VA, said the Philippines has a labor population that’s “undervalued, but has the ability and capacity to learn.”

“There’s a massive opportunity with the Internet and AI now,” he said. “Why not use AI as a tool to give you the ability to do more than you previously could?”

His company is retraining its staff to become AI virtual assistants, to make them more valuable to clients.

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Beyond employee training is the need to strengthen education in schools, especially in the fields of science, technology, engineering, and mathematics (STEM), said Erik M. Nielsen, president of A. Magsaysay Inc., the outsourcing arm of the Magsaysay Group of Companies.

He said the drivers behind the Philippines’ success in the BPO and IT-BPM industry have been its young, IT-savvy, English-fluent population with an aptitude for customer service and a willingness to learn new skills.