The advance of artificial intelligence (AI) is threatening business process outsourcing (BPO) companies in the Philippines, with low-skilled workers predicted to be most affected.

The Philippines economy relies heavily on the BPO industry. These companies employ 1.14m Filipinos, and contribute significantly to export revenues – US$5.5bn in the first quarter of 2017, according to data from the Bangko Sentral ng Pilipinas, which is the equivalent of almost half the value of the country’s total goods exports in the same period.

Jon Goldstein, regional director, Asia, of Page Outsourcing, the Recruitment Process Outsourcing (RPO) arm of PageGroup, predicted that BPOs will lose jobs at the lower end while adding jobs at the higher end as a response to the rise of AI.

In an interview with People Management, he said a substantial share of transactional administrative work – where a human element is not necessary – will be taken away over the next three to four years, whereas jobs for people with the skills to set up and maintain automation centers and create AI algorithms will be added.

“That said, a CV can be sifted through by an algorithm for the sourcing of candidates, but a human analyst will be needed for many years to come for the analysis of it,” Goldstein said.

John Forbes, a senior advisor to the American Chamber of Commerce in the Philippines, also said there is scope for people to move into higher-skilled areas such as data analytics.

"How quickly Filipinos obtain skills to perform those tasks will be key to BPO growth going forward,” he said in an interview with FT Confidential Research, a research service from the Financial Times.

There are some signs that the government is beginning to take the matter seriously, with ministers and undersecretaries frequently commenting to local media that BPOs will have to spend more on training and development programmes.

In July this year, secretary of science and technology Fortunato de la Peña said AI was a top priority in the government’s research and development agenda.

The recent emergence of mobile apps that are used for customer service are a pressing development to watch for the Philippines’ BPO sector, added Goldstein. For example, those made by US-based Zendesk can now do much of what call centers do, such as answering customers’ queries with fast and sophisticated text responses that appear in pop-up windows on smartphones.

“There are many startups with new AI technologies emerging, and we as an HR company must keep up with that,” he added.

Last month, People Management reported on the rise of artificial intelligence and chatbots in HR roles, and the challenges and opportunities this posed for HR practice across the world, including in Asia.