LAST month, the IT and Business Process Association of the Philippines (Ibpap) cut its 2028 revenue target for the country’s IT-BPM sector from $59 billion to a range of $43.3 billion to $50.5 billion. The workforce goal came down too, from 2.5 million jobs to somewhere between 1.85 million and 2.14 million.
Read as a headline, that looks like a sector losing altitude.
Read as a CEO who runs delivery floors in Manila every day, I see something different: a market recalibrating its scorecard, not losing its appetite for growth.
Demand is not shrinking, it is upgrading
The detail that got buried under the bigger number is the one that matters most. Ibpap left its 2026 targets almost untouched, at $42.3 billion in revenue and 1.96 million workers, up from roughly $40 billion and 1.9 million last year. If demand for Philippine outsourcing were actually collapsing, that near-term number would have moved too, but it didn’t. What moved was the multiyear curve running out to 2028, the same window in which AI is expected to gain traction to transition from a pilot project to a production tool. This tells a whole story altogether.
Here is what I mean by a “mix” problem. AI is very good at absorbing the transactional layer of outsourcing: repetitive tasks, entering data, following a script, answering the same 50 questions in the same order every time. That work compresses fast once a client turns on an AI agent, and it should. It was never where the value lived. Once an outsourcing relationship matures, the value shifts from transactions to judgment, ownership and execution.
Relationships are built in the nitty-gritty processes that companies have to navigate every day. Underwriting an exception a policy doesn’t clearly cover. Reviewing a financial close before it goes to an auditor. Drafting an ESG disclosure that has to withstand a regulator’s scrutiny. Triaging a cybersecurity alert that could be nothing or could be a breach, in either case requiring an intelligent assessment. Documenting engineering specs a client’s own team will build from.
None of that work disappears when AI arrives. If anything, it becomes more valuable because someone still has to exercise judgment, take ownership and make the call. Accountability sits with the company, and that’s what its customers expect from a business.
Leveraging differentiation
I have seen this evolution play out across the industry, and it is specifically relevant to our future growth plans. Outsourcing began with execution of transactional processes, standardized workflows and scale. The next phase is expertise, with KPO and Centers of Excellence bringing deeper domain knowledge, judgment and specialized capabilities into the equation. And now we are entering the phase of transformation, where AI is reshaping how that expertise is delivered.
The shift is not from outsourcing to AI. It is from capacity to capability, from people executing defined processes to people applying expertise, judgment and technology to solve more complex problems.
The client conversation is changing with it. The question is no longer simply, “How many people can you provide and at what rate?” It is increasingly, “What can your team do that technology alone cannot — and how can you combine people, process and AI to deliver a better outcome?”
This matters beyond any one company’s roadmap. Ibpap has pointed to Vietnam, Egypt, Poland, Colombia, Costa Rica and South Africa as competitors chasing the same volume the Philippines built its reputation on. If this country tries to defend that shrinking transactional pool on price, it will lose, because someone will always be cheaper. If it competes on judgment and expertise, on two decades of institutional fluency with Western clients, on English proficiency and cultural alignment that took a generation to build, it holds an edge none of those newer entrants can manufacture quickly.
The path forward
To move past the roadmap, operators like us have to stop measuring ourselves by seats filled and start measuring by expertise delivered, which means investing in reskilling frontline staff into judgment-heavy roles instead of only hiring specialists from outside. Schools and training providers need to update the pipeline so it produces people who can supervise an AI system and catch its mistakes, not just people who can staff a phone queue, because that queue is getting smaller every quarter. Workers coming into the industry should still see entry-level roles as a legitimate door in, but the career ladder now runs through specialization, not tenure alone.
The Philippine outsourcing industry did not get downgraded in July. Its old scorecard did. Revenue and headcount were always a proxy for something harder to measure: how much a client trusts you to make a call they cannot make themselves. Build that trust, and the mix will keep shifting in this industry’s favor long after 2028. Measure it, and the country’s outsourcing story will look very different from the one written in the headlines in the coming months.
Jasjit Singh Anand is the chief executive off Asiatel Outsourcing, a Philippine-founded business process outsourcing and knowledge process outsourcing company that provides customer service, back-office, accounting, IT support and other specialized services to clients. The company operates from the Philippines and has expanded its focus toward higher-value, technology-enabled outsourcing and AI-assisted services.