Robotics, AI and our future

There was disturbing news from abroad that could impact on the only two legs of our economy, OFWs and BPOs. Robotics and AI are very real threats we must prepare for, or we will face serious consequences in the near future.

There was this news that China just used robots to construct a 157.79-km stretch of the Beijing-Hong Kong-Macao Expressway. They completed the project using fully autonomous machines, with no human hands directly involved in the work.

The project deployed a 20-meter-wide unmanned paver, six double-drum rollers and three rubber-wheel rollers – all working in a perfectly synchronized formation. Every move was guided by AI algorithms and China’s Beidou satellite system, delivering centimeter-level precision throughout.

The machines made thousands of independent decisions per second while human engineers monitored the entire paving operation in real-time from nearby control rooms. This project demonstrated how automation can slash labor costs and improve overall road construction quality.

The machines handled everything – compacting, laying asphalt and finishing – in a single pass, with accuracy that surpasses traditional human-operated construction. This is not a test run. It was deployed on one of China’s busiest highways.

On the other hand, The Financial Times reported last weekend that hedge funds are betting against the shares and debt of outsourcing companies providing call centers, telemarketing and other services, in the belief that they will be decimated by the rapid growth of AI.

Among those targeted for short selling are shares of Paris-listed Teleperformance, the world’s largest customer service company and Nasdaq-listed TTEC Holdings. Teleperformance has become one of the most shorted stocks in Europe.

“Essentially, you have a service which is just selling human time to handle repetitive tasks,” according to Kasper Elmgreen, chief investment officer for fixed income and equities at an asset management firm. Call centers and other so-called customer experience companies are “a very, very clean AI disruption case,” he told FT. Our BPOs must move up the value chain.

How are we responding to these challenges? Not with the urgency called for.

“We’ve been focused on lower-level skills,” according to Dr. Karol Mark Yee, EDCOM 2 executive director.

Dr. Yee warns that 90 percent of local tech-voc training remains stuck in basic certificates like driving and baking. Because the local system fails to teach higher-level specialized skills, the country is left with a workforce that cannot even compete within ASEAN.

Did a bit of Google search and found out that the Middle East construction market is actively pursuing automation to meet ambitious efficiency targets. Dubai wants to hit 70 percent construction automation.

Louie Ferrer of Megawide told me that they have seen a lot of this robotics and automation in construction abroad.

Technologies like rebar-tying robots, autonomous site scanners and 3D printing are increasingly used for repetitive, dangerous or standardized tasks.

We are screwed. We are trapped in a “low-skill dependency loop,” where the Philippines remains a top supplier of raw human labor while global demands are fast turning toward tech-literate workforces.

Since the first Marcos Sr. era, we have used migration as a relief valve for the failures of Philippine education; a high school dropout could still earn a decent living as a construction laborer or helper in the Gulf.

But as automation and robotic construction scale up internationally, our do-nothing strategy is coming to an end. Low-skilled manual workers cannot directly compete against technologies that do not sleep, require no visas and carry declining operational costs over time.

It isn’t just construction. Robotics is also starting to displace humans in domestic services. AI is accelerating the shift toward multi-purpose domestic robots, with systems like the Hayat and NEO entering Gulf households to help manage chores.

Of course, we will say that nothing compares to the personal touch of a Filipina yaya or caregiver. That’s true but robots will still force the reduction in our deployment of domestic workers.

For now, technology is only fundamentally changing the composition of the deployment pool.

Annual OFW deployments will likely keep growing because the aging population in the rich countries is causing labor shortages. But future deployment growth will favor digitally skilled professionals over low-skilled manual laborers.

Our dismal domestic education system and a high concentration of low-skill OFW jobs present a serious structural vulnerability for the Philippine economy. I am not even sure if our government can shape up to deliver results soon enough.

Our economy’s OFW engine will not collapse overnight. But the future of this economic pillar depends entirely on whether TESDA’s short-term technical training can outrun the systemic failures of the broader educational pipeline.

The Philippine Statistics Authority classifies low-skill laborers (such as domestic helpers, clean-up crews and manual construction laborers) under “Elementary Occupations.” Low-skill deployments account for approximately 20 to 22 percent of total annual cash remittances sent to the Philippines, PSA data shows.

While this may seem surprisingly low, low-skilled workers represent roughly 40 to 44 percent of the total deployed OFW population. This major economic disparity is dangerous. The low-skill deployments dominate in raw headcount but contribute significantly less to the financial bottom line, PIDS, the government economic think tank observed.

Total annual cash remittances are historically at roughly $34 to $38 billion. This means low-skill deployments contribute roughly $7 to $8 billion to the national economy each year. The sea-based professionals, health care workers and tech-driven fields contributing the bulk of OFW remittances are the actual economic engine fueling the country’s GDP.

The Philippines will lose this social safety net – absorbing millions of under-educated, unemployed citizens. Once automation begins replacing those elementary occupations, our country will face a massive humanitarian and unemployment crisis. Our badly educated workforce does not have the skills to work abroad. And there are no jobs here.

Are we ready to face this potential social and economic catastrophe? I don’t think so.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco