President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad


To FINEX members and friends,

PRESIDENT’S REPORT
November 2017 Issue

We are now on the final stretch of 2017. This year has been one of the busiest and exciting for both FINEX and the country.

Earlier this month, our country was once again placed in the limelight as we hosted this year’s ASEAN Summit. The summit provided us to showcase what our country can share to the world and the creativity of the Filipino people. Indeed, the recent hosting of the ASEAN summit placed our country

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Why AI is good for the BPO industry
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Mr. Reynaldo C. Lugtu, Jr.By Reynaldo C. Lugtu, Jr.

MANILA BULLETIN (Business Option)
December 12, 2017

Why AI is good for the BPO industry

Business Option is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Tuesday & Thursday in Manila Bulletin, business section.

“All the call center jobs will be gone in five years or less!” This I exclaimed in my August 16 article about the impact of artificial intelligence (AI) on the business process outsourcing (BPO) industry, an echo of the prognostication of all the tech industry experts I spoke with, foreign and local, if the country doesn’t do anything.

I think most are convinced now about this looming threat to the vital industry that employs more than 1.3 million, 900,000 of which are call center jobs likely to be displaced by AI. Luminaries from Silicon Valley icon Dado Banatao to Department of Trade and Industry Secretary Ramon Lopez all resound the urgent need of the industry to retrain and innovate to avert, if not cushion the effects of AI. Some BPOs are gearing up by upskilling their staff to learn analytics. Others are seeking to develop domestic and regional markets to target companies that still require human call center interaction.

But what has been sounded off again and again is the revenuecontribution of the industry and the economic costsof losing this and that of adjacent industries such as real estate. What has been quietly put under the rug are the social costs of repetitively answering phone calls during the unholy hours of the day, resulting in health issues and other social aberrations.

I first warned about this in a 2007 study I conducted on the “Ethical issues in BPO” which was published in a national daily. “One ethical issue that BPO firms need to contend with involves ensuring employee safety, health and welfare. The irregular working hours of BPO employees, specifically call-center agents, is taking a huge toll on their health, resulting in a condition known as shift-work-sleep disorder. This occurs when an employee’s work schedule requires him or her to work when the body wants to sleep, and then try to sleep when the body expects to be awake. The symptoms of this disorder are tiredness, difficulty in sleeping, and reduced level of alertness.”

The Department of Health cites the International Labor Organization Asia-Pacific study entitled in 2016 revealing “high levels of stress common in the BPO sector, particularly in contact centres.” Health problems that were often encountered by employees included headache, fatigue, eye strain, chest and back pain and voice problems.

The same paper said that the BPO sector had a higher incidence of HIV/AIDS than other sectors. It cited a 2010 study conducted by the University of the Philippines Population Institute (UPPI), that showed “Philippine workers in contact centres, compared to workers in other sectors, faced a higher probability of exposure to HIV/AIDS; the stress they experienced in the workplace, among other factors, could encourage risky sexual behaviour.”

A 2015 report also cites the Philippine General Hospital (PGH) account that “the number of Filipinos infected with HIV rose dramatically in the past months and now includes young urban professionals such as call center agents.”

There is no official study or estimates on the social costs of exacted by the certain working conditions in the BPO industry. But AI has the potential to automate repetitive tasks and reduce, if not eliminate these health and social costs.

While AI, indeed, can eliminate jobs, it becomes a forcing function to industry players and policy-makers to upgrade the skills of current and future employees. It can also augment the high value tasks that are in-demand globally in the areas of analytics and complex problem solving.

In fact, Banatao believes thatAI can help the industry rake in $80 to $120 billion in a few years through AI. We just have to develop these much needed skills – and it has to start now.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX.The author may be emailed at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The author is President of The Engage Philippines, a digital customer engagement solutions company, and Co-Founder of Caucus Inc, a data privacy consulting firm. He teaches strategic management in the MBA Program of De La Salle University. He is also an Adjunct Faculty of the Asian Institute of Management.

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