Talent shortage may hamper adoption of AI among Philippine BPO firms

By Justine Irish D. Tabile, Reporter

INFORMATION TECHNOLOGY and business process management (IT-BPM) companies in the Philippines face a shortage in artificial intelligence (AI)-equipped talent despite the industry’s AI adoption rate of more than 60%, according to an industry group.

While six of 10 members of the IT and Business Process Association of the Philippines (IBPAP) have started use cases for AI, many of them are still concerned about security and talent shortage, Dominic Vincent D. Ligot, founder of Cirrolytix Research Services, told BusinessWorld on Thursday.

“There are lingering concerns about data privacy, security and integration with legacy systems,” Mr. Ligot, who is also head of AI and research at IBPAP, said in a Viber message. “The biggest hurdle we need to address is the lack of AI-equipped talent in the market.”

He noted that Philippine schools have a “massive shortage” of AI-knowledgeable teachers. This scarcity is a key bottleneck to producing an AI-capable workforce, he added.

Frederick D. Go, special assistant to the President for investment and economic affairs, earlier said the country should create a niche in the global market for cybersecurity and AI, while leveraging its competitiveness in the IT-BPM sector.

To achieve this, the Philippines should first address its labor mismatch, Mr. Ligot said. “The graduates we are producing are not cookie-cut to the requirements of the industry, even in business process outsourcing (BPO),” he said.

“Additional retraining and upskilling are needed to make them job-ready, and this is an additional cost friction that BPOs have to hurdle,” he added.

Mr. Ligot said addressing these challenges is vital to position the country as an AI hub, noting that the Philippines would have to compete with other emerging countries for outsourcing.

“There are other emerging countries that may adopt AI faster, making them serious contenders cost- and skills-wise for outsourcing work,” he said.

Mr. Go has said the Philippine government would pursue upskilling initiatives to train the Filipino workforce in AI and cybersecurity.

“We also note that the government and industry have launched a Philippine Skills Framework, and this is important for aligning the outputs of academia to the inputs of the private sector in terms of labor,” Mr. Ligot said.

ATTRACTIVE STEM
“However, we should also be conscious that the framework documents the jobs only as we see them today. There will be new jobs that the AI shift will bring, and we need to be ready for those,” he added.

Artificial intelligence has a transformative impact on the future of jobs due to AI-driven automation, IBPAP in a statement, citing a Bloomberg article, as it announced an international IT-BPM summit in Manila in October.

“The IT-BPM industry is navigating a complex landscape marked by rapid advancements in technology, shifting global dynamics and evolving workforce needs,” IBPAP President and Chief Executive Officer Jack Madrid said in the statement.

To mitigate potential job losses, IBPAP said there should be effective AI governance based on education, engineering, enforcement and ethics.

It added AI literacy initiatives should be prioritized to equip Filipinos with the knowledge needed to navigate AI advancements.

Access to resources should be democratized and a systematic process of incentives and penalties for AI use should be established, it added.

“A culture of accountability is essential to uphold ethical AI implementation, ensuring that AI innovation benefits all members of society and aligns with ethical principles,” the group said.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said initiatives should be put in place to make Science, Technology, Engineering, and Mathematics (STEM) courses attractive.

“It is very important to have more people take STEM courses for them to have core IT skills, which will make them nimble to adapt to AI and other technological advances and innovation,” he said via Viber.

Last month, the Philippine Chamber of Commerce and Industry recommended the enhancement of STEM programs to increase the employability of Filipino graduates.

Alberto P. Fenix, Jr., president of the Philippine Chamber of Commerce and Industry Human Resource Development Foundation, Inc. said education outcomes should be aligned with industry demands to address the skill mismatch.

On the topic of AI, he said that the first step is for the country to produce more data analysts.

“Even if there is AI, there is still a need for someone to check the date and analyze it, and that is where you will need higher-level skills,” he said by telephone.

“Even some existing companies do not have data analysts, so I think that should be the first step. The next is for us to learn how to program the machine,” he added.