Are we losing our edge?

(Conclusion)

The IT and Business Process Association of the Philippines (IBPAP) last week presented a preview of the Philippine IT-BPM Roadmap 2028 during the International IT-BPM Summit held at Okada Hotel in Parañaque, ahead of the roadmap’s complete unveiling in October.

The preview outlined the strategic priorities that will guide the industry as it shifts from capacity to capability and works toward the upper end of its projected growth.

With roughly two years remaining, Roadmap 2028 shows what coordinated action by industry, government and academe can achieve.

Under its accelerated scenario, the sector could reach $50.5 billion in revenues and 2.14 million full-time employees by 2028.

However, the revised roadmap acknowledges that in a slower-growth scenario, revenue would just reach $43.3 billion and employment could ease from 1.89 million to 1.85 million.

Clearly, IBPAP is aware of the Philippines’ vulnerability in terms of competition from our neighboring ASEAN competitors who even now are already outperforming us in terms of their AI-enhanced technology exports.

According to a Philippines Artificial Intelligence Readiness Assessment Report published by UNESCO in its UNESDCOC Digital Library, the Philippines aspires to join the ranks of upper middle-income economies and is banking on the transformative benefits of AI.

AI adoption, the report said, can boost the country’s gross domestic product by up to P2.8 trillion ($50.7 billion) by 2030, with key economic growth drivers — information technology, business process management, retail, manufacturing, and financial services — all well-positioned to harness AI in driving innovation to further develop the country’s digital economy.

However, the report noted that in leaping into the AI revolution, the Philippines has yet to fully get its “house in order” to maximize its true potential in AI adoption. Prevailing structural issues like poor digital infrastructure, siloed policymaking, bureaucratic inertia, lagging investments in national research and development, outdated legal and regulatory frameworks and guidelines, and fluctuating mobilization of public and private partnerships continue to undermine the Philippines’ velocity in the current scope and pace of digital transformation.

The report further acknowledged that while AI promises tremendous opportunities, it also brings uncertainties that could exacerbate digital inequities, posing risks to critical industries – from agriculture, manufacturing, and mining, to creatives, IT and business process outsourcing, including micro, small and medium enterprises or MSMEs.

The report said that many are bracing for the likelihood of job displacements and supply-chain disruptions. Others fear that AI may further inflame the increasing political polarization due to AI-generated content like deep fakes and bots.

On the other hand, the report cited positive signs as Philippine AI policymaking bodies, namely, the Department of Trade and Industry (DTI), Department of Science and Technology and the Department of Information and Communications Technology (DICT), vow to accelerate the Philippines’ digital ambitions with the release of various AI national strategies and roadmaps.

They also observed that there is a vibrant and entrepreneurial trifecta of industry-academia-civil society emerging, advocating for structural and bureaucratic reforms, supporting and facilitating multisectoral and cross-sectoral discussions on AI policymaking, and even augmenting technical, legal and policy capacity across the public and private sectors.

The report warned though that given the gargantuan challenges the Philippines confronts, it needs more willing and trusted partners to truly realize its AI policy into practice. Unlocking the Philippines’ full potential and allaying anxiety and skepticism surrounding AI-enabled tools, the report said, necessitates a seismic shift towards its approach to proactive and ethical AI policymaking.

The IBPAP, for its part, is urging the need to invest now in scalable talent development programs and moving to higher-value services while improving competitiveness to achieve continued revenue growth and generate more jobs.

The IBPAP›s Enterprise-Based Education and Training framework, in partnership with the Technical Education and Skills Development Authority and the DICT, is intended to help upskill Filipino IT-BPM workers.

According to Celeste Ilagan, president and CEO-designate and ESG champion of IBPAP: “We are entering the most decisive stretch of this roadmap. The foundations are in place, and this is the point where our strategy must become shared, everyday action on the ground.”

She said: “The upper end of our 2028 outlook is completely within reach, but only if industry, government, and academe move together with real urgency.”

Actions that should be taken, she said, include “investing in scalable talent development, accelerating the shift to higher-value services, and strengthening our competitiveness, creating meaningful, sustainable opportunities for Filipinos, and ensuring that our country strengthens its position as a premier destination and a trusted partner for IT-BPM services.”

AI adoption, Ilagan continued, is underway across much of the industry, with many enterprises deploying AI in selected functions while continuing to pilot and evaluate broader use cases.

However, she acknowledged, enterprise-wide adoption remains relatively limited, constrained by talent readiness, integration with legacy systems, data quality and governance, security considerations, and the need to demonstrate clear returns on investment.

And that is exactly where our IT-BPM sector’s vulnerability is, our inability to create our own AI technology that would allow us to better compete with our ASEAN neighbors and global competitors who are similarly racing to improve their AI capabilities as the US and China already take the lead.

The whole point of why the US and other markets turn to outsourcing their business process management requirements to us and other countries is because we are able to provide them with the services at a cheaper price.

AI, unfortunately, is now ready to take over that work at a much more efficient level, and that may result in less reliance on foreign-based workers and companies.

And even if there is still some need, competition from our neighbors with more advanced AI technologies are now ready to grab our market share.