PHL outsourcing industry ranked 5th in Ataraxis AI readiness index

THE Philippine outsourcing industry was ranked fifth in artificial intelligence (AI) readiness among all global outsourcing hubs, according to Ataraxis.

Ataraxis said the Philippine ranking was aided by  high workforce literacy and enterprise adoption, though concerns were raised about the talent pipeline due to the quality of the education system.

“The offshore outsourcing industry employs tens of millions of people. The Philippines alone has more than 1.7 million workers in IT-BPO. India’s technology services sector employs over 5 million. For both countries, and for dozens more, outsourcing is not an economic footnote, it is a foundational source of foreign exchange, employment, and middle-class formation,” Ataraxis said in its Global Outsourcing AI Readiness Index report.

The Philippine score on the index was 69.05 points, against India’s 84.55; Brazil’s 76.1; Malaysia’s 75.65; and Hungary’s 69.1.

Ataraxis’ index evaluated 25 leading outsourcing providers across four criteria — population adoption, workforce AI literacy, enterprise adoption, and education pipeline.

The Philippines performed strongest in workforce AI literacy with a score of 76 points, reflecting a high concentration of AI-skilled professionals and a demographic profile deemed ready to adapt to new technology.

For the enterprise adoption sub-index, the Philippines scored 71 points, indicating that companies in the outsourcing industry have integrated AI into their business operations. The score also reflects the degree of which firms are moving beyond pilots and experiments into production AI workflow.

In terms of population adoption, the Philippine score of 69 points reflects how broadly AI tools have penetrated daily life in the workforce. The sub-category also evaluates how many people are using AI, how fast that number is growing, and whether the underlying infrastructure exists to support continued growth.

The Philippines’ lowest marks were in the education pipeline sub-index, where it scored 52 points. The metric determines whether national institutions are producing the next generation of AI-capable workers through AI and generative AI training programs; the share of university students graduating with science, technology, engineering, and mathematics degrees; and the maturity of efforts to integrate AI into the country’s educational curriculum.

Ataraxis noted that while fears have been expressed about AI displacing offshore talent, destinations that are actively implementing AI are experiencing competitive differentiation rather than wholesale replacement.

“What the data show is that outsourcing destinations whose workforces are most actively integrating AI tools are not experiencing displacement. They are experiencing competitive differentiation. The risk is not that AI replaces offshore workers wholesale. The risk is that countries that do not build national AI capability lose ground to those that do in talent pipelines, in enterprise readiness, and in the depth of skills their workforce brings to the global market. This index measures exactly where each country stands in that race,” Ataraxis said.

The report accompanying the index also identified the seven largest buyer markets for global outsourcing, led by the US, which accounts for 36% of the world’s estimated $138.8-billion BPO spend; followed by the UK, France, Germany, Australia, Canada, and Japan.

Ataraxis relies on data from publicly available reports and internationally recognized sources on AI adoption, workforce development, enterprise transformation, and education trends. These sources may include Microsoft Corp., Cloudflare, Inc., OpenAI Group PBC, the Organisation for Economic Co-operation and Development, LinkedIn Corp., Coursera, Inc., and GitHub, Inc.

According to Ataraxis, a country may rank lower overall but still perform well for specific industries, language requirements, time-zone alignment, or cost profiles not captured in these four dimensions.

“This index does not predict whether AI will replace offshore workers. It does not assess individual worker productivity, small business competitiveness, or the near-term displacement probability of any specific job category. What it measures is national-level AI readiness for large-scale outsourcing industry positioning.” — Juliana Chloe A. Gonzales