Philippine jobs ‘exposed’ to AI risks estimated at 35-37%

Between 35% and 37% of Philippine jobs are at risk of displacement to artificial intelligence (AI), the World Bank said.

“About 35% to 37% are exposed” to AI risks, World Bank Group Lead Economist and Program Leader for the Prosperity Unit for Brunei, Malaysia and the Philippines, Gonzalo Varela told a panel.

He also noted the high adoption of generative AI in the operations of the Information Technology Business Process Management industry.

The IT and Business Process Association of the Philippines in December reported that 67% of its surveyed members are already using AI in customer service, data entry, and quality assurance, though challenges persist.

However, 8% of its members surveyed reduced their workforce because of AI.

In a separate report in August, the bank said the Philippines ranked fourth in ChatGPT traffic as of March 2024.

The World Bank noted that five middle-income countries — Brazil, India, Indonesia, Mexico and the Philippines — showed “generative AI traffic levels significantly higher relative to the US than their other metrics would suggest.”

Bilal Khan Muhammad, social sector economist at the Asian Development Bank, noted that AI advancements are now impacting white-collar jobs, with many tasks being performed by AI tools.

“But then with the recent advancements in AI, we also see white-collar jobs have also been replaced by these AI tools where we are seeing a lot of tasks now can be performed by the AI itself.

You just ask the AI to help you with the representation or format a document or help you prepare a draft,” he said.

Mr. Varela said AI could be a “productivity shock” and provide opportunities for workers in the Philippines.

The government’s Trabaho Para Sa Bayan plan needs to explore how “to take advantage of the technological changes that are going to affect job creation,” he added.

At the same event, the departments of Economy, Planning, and Development (DEPDev), Trade and Industry and Labor and Employment, launched the Trabaho Para sa Bayan Plan 2025-2034.

The 10-year plan aims to strengthen and future-proof the workforce.

The plan includes a research agenda to gauge the impact of AI on labor demand across various industries, job roles, and skill levels, and identify vulnerable occupations.

Labor Secretary Bienvenido E. Laguesma said the government has yet to firm up a national policy on AI.

“We believe that AI can supplement, can complement, but cannot replace,” he told reporters. 

Mr. Laguesma noted that the National Innovation Council, chaired by President Ferdinand R. Marcos, Jr., approved the creation of a think tank which will create a roadmap for AI use.

The think tank, whose lead agency will be the Department of Science and Technology, will guide the drafting of AI policy.

“Protection does not mean retention. It could mean upgrading, looking for another job, facilitating their employment, and the provision of social safety nets. That’s where we are,” Mr. Laguesma said.

Meanwhile, DEPDev Undersecretary Rosemarie G. Edillon noted that the low exposure of AI stems from the overall low level of technology adoption in the Philippines.

“Underlying all this, especially on the part of data and then creating models, this is really where you will need this policy on ethics, on the use of AI,” she added.

Source: Business World

PHL fell four spots on the Human Development Index ranking

The Philippines fell four spots on the Human Development Index (HDI) rankings, coming in at 117th in the 2023 evaluation, despite posting improving scores, the United Nations Development Program (UNDP) said.

In a statement, the UNDP said the Philippine score improved to 0.720, up from 0.714 in 2022 and 0.690 in 2019.

The index gauges a country’s health, education and standard of living.

“The Philippines’ HDI value for the year 2023 climbed to 0.720, reflecting an increase of 1.4% from the 2022 level; however, it remains below the average HDI for the East Asia and Pacific region,” the UNDP said in a statement on Tuesday.

The Philippines scored below East Asia and the Pacific’s average of 0.775 and the global average of 0.756.

Among neighboring countries, human development levels were “very high” in Hong Kong (8th), Singapore (13th), and Brunei Darussalam (60th).

Scores for Philippines, Singapore and China

The Philippines had a “high” human development level, as did Malaysia (67th), Thailand (76th), Vietnam (93rd), Indonesia (113rd) and Timor-Leste (142nd).

On the other hand, human development was classified as “medium” in Laos (147th), Myanmar (150th), and Cambodia (151st).

“Instead of seeing sustained recovery following the period of exceptional crises of 2020-2021, the report reveals unexpectedly weak progress. Excluding those crisis years, the meagre rise in global human development projected in this year’s report is the smallest increase since 1990,” the UNDP said.

The report also found that while global development is decelerating at an alarming rate, inequalities continue to widen between rich and poor countries.

“As traditional paths to development are squeezed by global pressures, decisive action is needed to move the world away from prolonged stagnation,” it said.

Life expectancy at birth is at 69.8 years in the Philippines, according to the Human Development Index. The expected years of schooling for Filipinos is 12.8, with the mean years of school is 10.

The Philippines also ranked 92nd in the gender inequality index with a score of 0.351, while its gender development score stood at 0.966.

The report also found that half of respondents worldwide think their jobs can be automated.

“An even larger share — six in ten — expect AI to impact their employment positively, creating opportunities in jobs that may not even exist today,” she said.

Around 13% of survey respondents fear artificial intelligence (AI) could lead to job losses while in low- and medium-HDI countries, 70% expect AI to increase their productivity.

Two-thirds anticipate using AI in education, health, or work within the next year.

“The choices we make in the coming years will define the legacy of this technological transition for human development,” Pedro Conceição, director of UNDP’s Human Development Report Office, said.

“With the right policies and focus on people, AI can be a crucial bridge to new knowledge, skills, and ideas that can empower everyone from farmers to small business owners.”

Source: Business World

Financial sustainability of mass transit

One of the large challenges on the horizon is how existing and future mass transit in the Philippines can remain financially viable so that services can be placed on a stable footing, and adequate operation and maintenance will be applied. This is of significant concern, especially because there are several major mass transit projects coming on stream over the medium term. The Metro Rail Transit Line 7 (MRT 7) is expected to be operational in the next one to two years. By 2032, the Metro Manila Subway and the North-South Commuter Railway are also expected to be online.

Financial sustainability of public transport operations is a natural challenge for any national agency or local government because of the expectation that fares should be kept affordable. There is likely to be constant political pressure to keep public transport fares as low as possible. For this reason, the revenue from railway fares is unlikely to cover the full cost of delivering the service. This implies that a continuing subsidy will be required so that operations do not suffer even if fare revenues fall below expenditures over a prolonged period.

If a continuing subsidy is required, the subsidy should not be dependent on the annual budget appropriated by Congress, as this could become unreliable and subject to political whim. There is therefore a need to find stable and reliable non-fare revenue sources and to earmark these for mass transit (in the same way that 'sin taxes' on alcohol and tobacco are channeled into funding vital and continuing health services). There are three substantial sources of revenue that can help to fund the possible financial deficits of mass transit operations: parking levies; congestion charging/congestion pricing; and traffic violation fines.

Parking levies: Free or very low-cost nonresidential parking spaces in urban centers are "magnets" for traffic; they attract increased motor vehicle use. In busy urban centers, there is a need to manage the demand for parking spaces as well as to compensate the rest of society for the added road congestion due to the availability of these spaces. There is ample justification for introducing a daily levy or tax on each nonresidential parking space in a crowded urban area, to be collected whether or not the parking space is used.

In Greater Manila, where there are over a million nonresidential parking spaces available, the revenue potential from a parking levy is considerable. A million nonresidential parking spaces, each subject to a daily levy of P100 would generate P100 million per day, enough to subsidize several million public transport trips daily.

Congestion pricing, whereby vehicles are charged a fee (collected like a toll) for entering the center of a city or a busy corridor or district, can help to reduce the demand for private vehicle use while providing a revenue stream that can support public transport development and operations.

The experience of New York City is instructive. In an article (found in www.curbed.com) titled "How Well Is Congestion Pricing Doing? Very," these were the highlights for the first 100 days of congestion pricing: complaints about car honking dropped 70 percent; rush-hour delays at the Holland Tunnel dropped 65 percent and travel time through it fell 48 percent; the number of cars entering Lower Manhattan fell by 6 million compared to a year earlier; traffic-related injuries in the congestion zone dropped by half; Metro-North ridership rose by 8 percent; and visitor counts in business improvement districts increased by 1.5 million year over year.

Clearly, congestion pricing offers an effective mechanism for curbing the demand for use of motor vehicles while providing a steady revenue stream that can support mass transit operations.

Fines and penalties for traffic violations are another rich source of additional revenue that could help keep public transport financially viable while maintaining affordable fares. The key is to bring back the camera-based no-contact apprehension system and fix any remaining legal and technical constraints. Cameras at every busy intersection or street corner will pay for themselves many times over, while altering driver behavior for the better. This mechanism will provide another meaningful stream of funds to support reliable and adequate public transport while keeping driver behavior in check.

Just as important as setting up the infrastructure for modern mass transit schemes is the establishment of funding mechanisms to ensure that public transportation will not be a burden on the national budget. This means, early on, putting in place the additional sources of revenue — parking levies, congestion pricing and fines from traffic violations — that will provide a steady, predictable stream of funding to cover the likely operating deficit.

Source: Manila Times