Working paper · July 2026 draft
Early Signs of the Generative AI Labor Market Shock in the Global South: Evidence from Philippine Business Process Outsourcing
Nico Ravanilla
In brief
Generative AI can do the work the Philippine outsourcing industry sells. Using the Anthropic Economic Index and Philippine labor force data, this paper shows employment growth is already slowing in the most AI-exposed provinces, industries, and municipalities, while wages and hours have not yet moved.
Abstract
Business process outsourcing is among the developing world's largest employers, and generative AI performs the tasks it sells. I examine the Philippines, the economy most dependent on it. I construct a sub-national exposure index from pre-ChatGPT occupational composition and observed usage in the Anthropic Economic Index, and trace employment as US clients adopt AI and automate what they bought. Employment growth slows in exposed provinces, industries, and municipalities, while wages and hours remain unchanged. Would-be workers remain unemployed, not yet absorbed at home or abroad. Displacement is beginning at the hiring margin — early, measurable, and concentrated where exposure is highest.
Cite
@misc{ravanilla_ai_bpo,
title = {Early Signs of the Generative AI Labor Market Shock in the Global South: Evidence from Philippine Business Process Outsourcing},
author = {Nico Ravanilla},
howpublished = {Working paper},
}