AI HITS PHILIPPINE BPO

The IT-BPM industry has just lowered its targets for 2028.

IBPAP now expects the industry to generate around $50.5 billion in revenue by 2028, down from its original target of $59 billion—a 14% reduction even under its best-case scenario.

According to IBPAP, the revised projections reflect the rapid adoption of artificial intelligence, changing client behavior and intensifying global competition.

Personally, I believe AI is the biggest concern. As I’ve mentioned before, I have a friend who was recently laid off from his SG job due to AI.

The last major downward revision of the industry’s targets came in 2020, when IBPAP lowered its forecasts because of COVID-19. That was an extraordinary—but ultimately temporary—economic shock. This time, the challenge is structural.

What does this have to do with real estate?

First, the BPO industry has long been one of the country’s largest sources of office demand. Slower headcount growth could mean fewer expansions, smaller office requirements and weaker demand for new office space.

Second, millions of employees rent or purchase homes near major business districts. If hiring slows, the effects could eventually be felt in the residential leasing and sales markets surrounding those employment centers.

Third, this is not a small industry. Philippine IT-BPM revenue reached approximately $40 billion in 2025, compared with around $35.6 billion in cash remittances from overseas Filipinos.

For years, remittances and IT-BPM sector have served as two of the strongest pillars supporting Philippine consumption, foreign-exchange inflows and real-estate demand.

Now, one of those pillars is facing its most serious structural challenge yet.

Everyone should pay attention. The prudent response is preparation. Tighten your belts.