Digitalization and AI: A Double-Edged Sword for Filipino Workers

MANILA: The rapid advancement of digitalization and artificial intelligence (AI) is posing a significant challenge to skilled workers in the Philippines, particularly affecting the overseas Filipino workers (OFWs) who have returned in the past eight years. This technological shift, if not managed well, could lead to substantial changes in the country’s labor landscape.

Key Insights:

Threat to Skilled Workers: HSBC economist Aris Dacanay highlights that digitalization and AI could replace skilled Filipino workers, especially the half a million OFWs who have returned since 2015.

Shift to the Gig Economy: Many returnees, unable to find traditional employment, have turned to the digital or gig economy, which includes a range of jobs from food stall vendors to online resellers and content creators.

Economic Implications: The lack of formal sector employment for these workers could widen the Philippines’ current account deficit. In 2022, the deficit was recorded at $18.1 billion, with a projection of narrowing to $15.1 billion in 2023 and $11.1 billion in 2024.

Opportunity for Upward Mobility: While digitalization presents risks, Dacanay notes that it also offers the Philippines an opportunity to leverage AI and digitalization to move its predominant services industry up the global value chain.

Need for Reskilling: Dacanay stresses the importance of reskilling and investment to ensure that digitalization acts as an opportunity rather than a liability for the Filipino workforce.

The situation underscores the need for strategic planning and adaptability in the face of technological advancements to safeguard the employment prospects of skilled workers in the Philippines.