AI threatens 36% of Philippine jobs, IMF warns of widespread displacement and automation impact

PHILIPPINES: The rise of artificial intelligence (AI) is poised to reshape the Philippine labour market, with nearly four out of 10 jobs highly exposed to AI, according to a recent report by the International Monetary Fund (IMF) published by the Asia News Network.

The Washington-based institution, in its country report published on Dec 20, highlighted both the potential for AI to displace workers and the opportunity to enhance productivity across various sectors.

The IMF estimates that 36% of jobs in the Philippines are “highly exposed” to AI. While this technology may replace certain human roles, it also holds the potential to complement workers’ tasks, boosting efficiency and productivity.

Interestingly, more than half of the jobs exposed to AI were categorized as “highly complementary,” meaning AI could augment rather than replace the tasks performed.

However, the risks are significant. The IMF warned that approximately 14% of the Philippine workforce is at risk of being replaced by AI, with the business process outsourcing (BPO) sector particularly vulnerable to disruption due to the rise of AI-driven tools like chatbots and virtual assistants handling customer service tasks.

Roles in technical support, sales, and clerical work face the highest exposure to automation, with many of these jobs at risk of being fully replaced by AI, given the low potential for AI to simply support these roles.

Conversely, opportunities exist for AI to augment tasks for professionals, managers, and machine operators, while workers in craft and trade, agriculture, and elementary occupations are less likely to be impacted by technology.

The report also noted gender disparities in AI exposure. Nearly half of women’s jobs are highly exposed to AI, compared to just a quarter of men’s jobs.

This difference is largely due to the higher number of women employed in clerical support, service, and sales, while men are more likely to work in fields like trades, agriculture, and machine operations, which are less vulnerable to automation.

The IMF’s findings come amid growing optimism about the Philippines’ vibrant IT and BPO sectors. The Bangko Sentral ng Pilipinas (BSP) projects BPO revenues to grow 6% to $31.4 billion this year, outperforming other key dollar sources such as remittances.

The IT and Business Process Association of the Philippines anticipates even higher revenue growth, projecting $37.5 billion and an increase in the workforce to 1.82 million by year-end.

To ensure the benefits of AI are widely distributed, the IMF emphasized the need for the Philippine government to invest in digital infrastructure and education. It also called for strengthening the social safety net for workers displaced by AI.

In particular, the IMF recommended modernizing educational curricula and increasing training for teachers to equip the future workforce with the necessary skills to thrive in an AI-driven economy.

Globally, the IMF’s report notes that AI could impact as much as 40% of global employment. While AI’s potential to enhance productivity is significant, it also presents risks, particularly in advanced economies where up to 60% of jobs may be affected.

In emerging markets like the Philippines, while AI exposure is lower, the challenge remains to ensure that these countries can harness the benefits of AI without exacerbating global inequality.

The IMF concluded by warning that while AI’s rise will likely create new opportunities, the transition will require careful management to ensure that workers are not left behind, particularly in emerging economies like the Philippines.