IN the early 2000s, the promise of the business process outsourcing (BPO) sector was simple: Filipinos could earn more without having the need to work in another country.
Companies based in the United States and the United Kingdom started moving their customer support and back-office operations to Manila, where English-speaking workers filled cubicles running on foreign time zones.
It was a different kind of overseas work. The contracts were offshore, but the workers stayed home. Soon, the model scaled fast.
By the mid-2000s, the Philippines was already emerging as one of the world’s call center capitals. What began as a handful of firms handling customer support for foreign clients had turned into a fast-growing industry that was reshaping the economy.
A 2006 study by the Philippine Institute for Development Studies noted that as early as 2004, the country had captured about 20 percent of the global market share in contact center services-a foothold that would later define its position in the global service economy.
The dominance is also reflected in its earnings, with its revenues climbing from $350 million in 2001 to $1.65 billion in 2004. According to the Asian Development Bank (ADB), the BPO sector accounted for just 0.075 percent of GDP in 2000, but its share had already expanded to 2.4 percent by 2005.
The industry was also generating jobs at a pace the government had never seen. The Arroyo government said that only 4,000 workers were employed in BPO in 2001. By the end of 2005, the figure soared to 163,000.
By then, the rewards were clear. Data from the BPO Industry Employees Network (BIEN) showed that average entry-level pay in 2005 ranged from P28,000 to P32,000-nearly triple the average salary of other private sector workers at the time.
The industry’s promise of higher pay and professional workspaces drew thousands of young Filipinos from all backgrounds, turning night shifts into symbols of upward mobility.
However, University of the Philippines-Diliman labor economist Virgel C. Binghay believes that the wage premium that fueled the industry’s rise has also exposed its limits.
‘The wage premium does create real mobility, but it is uneven and fragile. What we may be seeing is not sustainable upward mobility across generations, but more of a ‘holding pattern,’ Binghay told BusinessMirror.
‘Higher wages merely cover up systemic weaknesses: limited upgrading, inadequate labor protections, and the absence of equally attractive alternatives outside BPOs.’
The boom, Binghay said, was both a success story and a warning. The kind of growth that looked stable on paper but fragile up close.
Major shifts
AMONG those drawn to that promise was Alwyn, 47, not his real name, an accountancy graduate who turned to the night shift when the pay from his first jobs could no longer keep up with the needs of home.
‘The pay was low-around P7,000 a month. A friend introduced me to the call center and said the pay was higher. That was really the primary concern: higher pay. More than double, actually about 2.5 times, so I shifted from a normal organization to a night shift work,’ he recalled.
For Alwyn, it was about getting by. The promise of a stable income and a little more room to breathe was enough to leave behind the daylight routine he’d grown used to.
He joined the industry in 2002, when call centers were only starting to fill newly built towers in Ortigas and Makati. The city’s skyline was changing, and so were the rhythms of work.
‘It was really a boom. There was a premium on top of the salary, aside from the night differential. and even the break was paid.’
Back then, the graveyard shift meant something else entirely-a thin corridor of people who kept the night running: security guards pacing under shuttered establishment lights, clerks behind the counters of 24-hour stores, and sex workers trying to make a living in the streets.
But around the 2000s, the night belonged to others, too. To people like Alwyn, who learned to stay awake for a living, chasing quotas and foreign voices past midnight.
‘It’s hard at first . you have to sleep during the day, but sometimes you can’t fall asleep right away because you end up checking your phone or finding things to do,’ he said.
His shifts often ended when the sun was already up, forcing him to darken his room and block out the noise to get enough rest.
Weekends, too, became shorter. His body would still be catching up from the week’s night shifts, so Saturdays often disappeared into sleep.
By the time he felt rested enough to go out or see his family, Sunday had already arrived-and by nightfall, it was time to start another workweek.
For BPO workers, those adjustments were part of the deal. It was the hidden cost of the higher pay and the steady job that kept them home while the rest of the country slept.
Concerns
MANY say that working in the BPO industry requires a different kind of endurance-one that tests not just your English-speaking skills, but also the body’s limits.
For Alwyn, the price of that endurance became harder to ignore. Just eight years after he started working in BPO, he was already diagnosed with hypertension. The long hours, endless coffee, and constant pressure had begun to exhaust him.
‘Aside from that, your biological clock changes,’ he said. ‘Sometimes you end up sleeping in the office, and your rest isn’t a full eight hours. Either you drink coffee or make up for it with food.’
Over time, eating became both a comfort and a coping mechanism. Food runs and coffee deliveries became part of the rhythm of survival-a small relief amid the exhaustion of serving clients from another time zone.
‘It’s the easiest way to cope. That’s what managers and bosses use as an incentive, too, to keep us motivated,’ he admitted.
The experience of workers like Alwyn mirrors what global studies have long documented. A 2010 book by the International Labour Organization (ILO), titled Offshoring and Working Conditions in Remote Work, found that nearly half-or 42.6 percent-of Filipino call center agents work at night, a schedule ‘associated with occupational safety and health concerns.’
The report also linked the job to sleep disorders, fatigue, eye strain, neck, shoulder, and back pain, and even voice problems.
Beyond the physical toll, the ILO study warned of psychological strain among workers who operate under constant surveillance.
BPO employees, it noted, often face heavy workloads, rigid procedures, and electronic monitoring-conditions that limit their autonomy and create high levels of work-related stress.
That kind of pressure was familiar to Erwin Alcober, now 47, who entered the industry in 2007.
By then, he already had a young family to feed and a child about to start school.
His job at a small internet café barely paid minimum wage-just enough to keep the lights on.
‘My wife and I already had two kids by then,’ he said. ‘She actually sent my résumé to a call center without telling me . that was the best source of income at the time.’
Without a college diploma, his options were limited. But call centers were hiring people who could speak English and learn quickly.
For Erwin, the P21,000 salary was more than just a pay raise-it was stability, something his family never had before.
Still, that stability came at a cost. ‘Targets kept changing. Average handling time used to be 20 minutes, then they’d bring it down to 15. It became toxic.’
Average handling time (AHT) is one of the key performance metrics in the BPO industry. It measures how fast an agent resolves customer concerns, often down to the last second.
Every call, pause, and note entry is tracked by software. The shorter the time, the better the score.
But for workers like Erwin, every second saved on a call came at the expense of rest and health. A trade-off is built into the system itself.
The sleepless nights piled up, and so did the stress. After two years, he, too, developed hypertension.
‘The stress is different.. If you don’t meet the metrics [in AHT], they’ll coach you. The whole process wears you down,’ Erwin added.
Struggles
FOR Lean Porquia, founder of BIEN, the struggles of BPO workers also reveal a deeper neglect in workplace health and safety.
‘One of the leading illnesses among call center workers is urinary tract infection.. That’s because restroom breaks are controlled and regulated to some extent.. Breaks are plotted based on the volume of incoming calls. If there’s a high call volume, you’re not allowed to take a break,’ he explained to BusinessMirror.
Porquia said the system has made workers so tightly monitored that even basic bodily needs are treated as a matter of productivity. The result, he added, is a workforce that continues to deliver under conditions most people wouldn’t consider humane.
Porquia recalled that at the height of the pandemic, even visibly sick agents were told not to go home.
‘There was a time when an agent was already complaining about not feeling well. The team leader told the agent, ‘Don’t go home, just sleep here,” he said. ‘Later, the agent suddenly collapsed and, unfortunately, died. The company covered it up.’
Health hazards, he added, extend beyond infection control.
‘It’s very common in call centers to share headsets,’ he said. ‘Whatever headset was used by the previous agent, that’s the same one you’ll use. So, what if that person had pneumonia or tuberculosis? You’ll end up getting their illness too.’
He said these problems persist because the industry’s occupational safety and health system remains largely self-regulated, with companies given leeway to stage-manage compliance.
Under the current framework of the Philippine Economic Zone Authority (Peza), companies operating inside ecozones-including many BPO firms-enjoy wide administrative autonomy. Porquia said this setup has made labor inspections ‘limited and largely procedural,’ instead of random and independent.
The result, he added, is an illusion of compliance where workers appear protected on paper, but continue to face unsafe and unhealthy conditions in practice.
Fragile climb
THE personal anecdotes of BPO workers echo a deeper pattern in what was once called a sunrise industry.
Binghay explained that while the BPO sector still offers relatively higher wages, its early advantage has faded over time.
‘BPO wages are still competitive relative to the wider Philippine labor market, but the advantage has weakened significantly,’ he said. ‘What was once a strong draw is now a thinner cushion, and unless reinforced by better job quality, stronger protections, and career pathways, the sector risks losing its attractiveness to the next generation of workers.’
Data from BIEN showed that as employment in the sector grew, entry-level pay steadily declined.
From an average of P28,000 to P32,000 in 2005, starting salaries dropped to P18,000 to P30,000 by 2010, and further to P15,000 to P30,000 in 2015.
By 2020, new hires were earning between P13,000 and P28,000-a roughly 32 percent decrease over 15 years, even if record employment and export revenues were achieved by the industry.
Binghay said this drop shows that wages are no longer the main reason Filipinos choose or remain in BPO jobs. The post-pandemic landscape, he added, has also reshaped worker motivations.
‘Post-pandemic and amid rapid tech change, workers are also seeking security, wellbeing, purpose, and digital empowerment-things that sometimes weigh even more when it comes to retention,’ he said.
Binghay also cautioned that the industry’s current model remains ‘fragile’ unless it adapts to the changing needs of its workforce.
Higher wages, he said, can only go so far when health risks and job insecurity persist.
‘The gaps lie in the lack of sector-specific [occupational safety and health] standards, very rigid scheduling, inadequate preventive care, weak enforcement, and limited worker voice. Unless these are addressed, the industry risks trading short-term wage gains for pangmatagalang [long-term] worker health costs-a cycle that undermines both productivity and retention.’
The sharp decline in starting pay, according to Porquia, also reflects how the Philippines is slowly losing its cost advantage to emerging competitors.
He explained that as technology advances, what once set Filipino BPO workers apart-especially their ability to speak with a clear, neutral accent-no longer guarantees an edge in the global market.
Porquia pointed to a new software called Sanas, which can neutralize a person’s accent in real time.
‘So, if you have someone with a very pronounced, strong accent, like many Indians, it can modify that so that when you hear them on the other end of the line, it sounds like you’re talking to an American with a natural, neutral accent. That will change the market because of that,’ he said.
‘Right now, India dominates the non-voice sector. With this technology, they can take over voice accounts, too. And when that happens, foreign investors may start to pressure Philippine companies to lower wages even further to stay competitive.’
Impact of automation
EVEN before technologies like Sanas entered the market, BPO workers had already begun to feel the pressure of automation.
A 2016 study by the ILO found that nearly 89 percent of Filipino workers in the outsourcing sector were at risk of automation.
The report presented the danger stemmed largely from ‘software automation,’ in which algorithms perform routine and repetitive tasks such as data entry, ticket processing, and customer response routing-functions that make up the bulk of call center and back-office work.
The ILO warned that unless the sector diversified into higher-value services, technology would eventually erode its labor advantage.
Almost a decade later, that early warning has become more urgent.
A 2025 working paper by the International Monetary Fund (IMF) identified the Philippine BPO industry as among the most at risk from artificial intelligence (AI).
The IMF said the industry’s focus on routine, rule-based roles-such as handling customer calls and processing transactions-makes it especially vulnerable to large-scale disruptions.
Overall, the IMF study found that about one-third of all jobs in the Philippines are highly exposed to AI.
Of these, 61 percent are in occupations where AI could complement human work by improving productivity. Meanwhile, 14 percent of the total workforce holds low-complementarity jobs that are far more likely to be displaced.
Among those highly exposed with low complementarity are customer service representatives, telemarketers, accountants, auditors, and administrative clerks-many of whom make up the country’s BPO workforce.
In contrast, roles such as managers, teachers, lawyers, and engineers fall under high exposure but high complementarity, where AI can enhance, but not replace, human judgment.
For Binghay, these findings underscore an urgent need for foresight.
‘Yes, there is a real risk of displacement. But that doesn’t mean job loss is inevitable. With retraining, just-transition policies, and a shift toward higher-value services, the BPO industry can evolve rather than collapse under AI pressure,’ he said.
Jun M. Roy, chairman of the Philippine Society for Talent Development (PSTD), agreed that AI will change how work is done-but not what makes workers indispensable.
‘I don’t think empathy in terms of answering or responding to calls can be replaced; the friendliness, I don’t think it can be substituted by AI.That’s something unique, uniquely human, that still cannot be copied by an AI,’ he told BusinessMirror.
Beyond empathy, he stressed that leadership remains the strongest defense against automation.
‘Leadership skills are very much essential and critical. You don’t look at AI leading a team of humans. Wisdom is also still needed,’ Roy said.
In 2024, the IT and Business Process Association of the Philippines (IBPAP) reported the sector closed the year with 1.82 million jobs and $38 billion in revenue.
IBPAP expects the sector to sustain its growth trajectory, projecting its workforce to reach 2.5 million and revenues to expand to $59 billion by 2028.
Closing the gap
WHILE new technology threatens to upend the industry, Asian Institute of Management economist Jamil Paolo S. Francisco said the deeper challenge lies in human capital.
The long-term competitiveness of the BPO sector, he explained, depends not only on keeping pace with technology but also on improving what he called the country’s ‘human capital infrastructure.’
‘Even more important than physical infrastructure is the human capital infrastructure, the education,’ Francisco said. ‘And that is really the only way we can ensure that our IT-BPO sector will be competitive in the future, and also how we can achieve prosperity.’
He said that although the outsourcing sector continues to fuel growth, the benefits remain concentrated in major cities where education and digital resources are stronger.
Outside Metro Manila, Cebu, and Davao, workers face fewer opportunities to enter or move up in the industry.
‘If there’s no development outside that IT-BPO sector, how can we have the shared prosperity and trickle-down effect that we’re talking about? So, it all boils down again to education,’ Francisco said.
That uneven access, said University of the Philippines Diliman visiting professor and economist Maria Reinaruth D. Carlos, also reveals a deeper kind of skills mismatch.
‘Evidently, there is de-skilling. You study other courses-say, nursing-and then end up working in a call center or the BPO industry,’ Carlos said.
She noted that while the industry has absorbed many college graduates, it has also created a cycle where workers are overqualified for entry-level positions yet face few chances for advancement.
‘With that kind of work, there’s no real career progression. that’s the problem,’ Carlos said.
Francisco added that unless the Philippines strengthens its human capital base, even this form of employment may become less secure.
The stagnation in education quality, he warned, is already eroding the very advantage that once defined Filipino labor.
He emphasized that reforms must be systemic-stretching from basic education to specialized, technical, and managerial training that can prepare Filipinos for a digital economy.
‘We need one big push. from basic to specialized, vocational, technical training, to managerial skills.’