Widening Skills Gap and AI Leaps Put Philippines BPO Industry at a Crossroads

The Philippines’ business process outsourcing (BPO) industry is losing its edge as the country’s skilled workforce dwindles at a time when AI-powered bots are threatening to take over call center jobs.

If the Asian country fails to resolve the crisis quickly, it could lose market share to Colombia, Costa Rica or newcomers like South Africa, Egypt,and Poland, according to a report by Bloomberg.

The BPO industry, which accounts for 8% of the country’s GDP, is expected to create 800,000 jobs over the next five years, but the national BPO lobby group is increasingly losing hope of reaching that goal largely because of the poor education system.

“The most common challenge I hear is comprehension. I think they fail at a more basic level,” Jack Madrid, head of the country’s main BPO trade group, told Bloomberg.

The proportion of people in the Philippines who are fluent in English is dwindling by the year. According to the World Bank, almost 90% of Filipino children around the age of 10 aren’t able to read a simple English text clearly.

A recent survey by the IT and Business Process Association of the Philippines found that only 10% of BPO job applicants in the country have the specific skills and knowledge that employers are looking for.

This poses a major threat to the industry as AI is already automating many tasks such as customer service and data entry, the BPO domains that make up the majority of the Philippine service portfolio.