The Philippines does not need to build AI to have an AI advantage

The Philippine IT-Business Process Management industry is projected to see growth, with an estimated 1.97 million workers and US$42 billion in revenue by 2026, according to IBPAP. As AI takes over more routine tasks, companies are shifting towards digital and complex work. This creates a challenge: can the Philippines maintain its outsourcing advantage, or will it find a new edge?

Rather than focusing on whether the Philippines can continue outsourcing work, the more pertinent question is: what kind of work will still require human judgment after AI handles more routine tasks? The answer may lie in the ability to identify when AI should stop and human judgment should begin.

AI can automate repetitive tasks, but it cannot handle the consequences of its actions. For instance, an automated customer service response may be suitable for a routine query, but when dealing with a disputed charge or an unusual case, human intervention is necessary. This distinction in skills sets - from tool usage to judgment - could provide the Philippines with a competitive advantage.

The key to this advantage lies in the Philippines' existing workforce, which operates across various sectors such as customer experience, healthcare, financial services, and software. These workers already possess experience in areas where exceptions are commonplace. The focus should shift from merely teaching them to use AI tools to training them on when to question an AI's output.

This concept extends beyond business processes in the Philippines. Across Asia, investors and founders are grappling with how AI impacts labor economics. While automation may reduce the need for routine execution, it often increases the importance of review, escalation, context, and responsibility. The real competition may not be based on labor costs but rather on developing a workforce capable of supervising increasingly automated work.

In practical terms, this could manifest in customer service, healthcare administration, finance, insurance, technical support, and compliance work. As AI handles more routine cases, humans will increasingly be involved in addressing the exceptions that arise. This transition from tool use to judgment is where the Philippines could gain a significant edge.