The old adage ‘nothing is certain except death and taxes’ is going to be the banner statement in tech for 2026. I’m referring to the death of jobs in the BPO sector and the huge “AI tax” on consumer electronics due to the overall increase in demand for RAM for data centers.
Since 2024, I’ve been covering the BPO sector from a macroscrope. The motherhood statement by Jimmy Go, President and CEO of VST ECS was that globally, AI is poised to replace 85 million jobs. But it will also create 70 million jobs. I asked myself where does the Philippines stand in the 15 million deficit. The answer came swiftly: Jack Madrid, President and CEO of IBPAP said that despite the revenue growth of the IT-BPM sector by roughly 8.8% since 2023, he admits that there is a skill gap, a reskilling issue that has contributed to the loss of several roles in the BPO sector. The Philippines has always had the competitive advantage of being an English as a first language country (at least compared to many of its ASEAN neighbors), giving it a head start when it comes to support desk roles. This may change. At a Concentrix event earlier this year I was made witness to an AI tool they were deploying on the floor that, in real time, removed accents and dialect speech patterns when on a call. This was great for agents who were having a hard time adjusting to English, but it also meant the language barrier may no longer be a factor to consider. As Madrid said in a previous interview, The Philippine IT-BPM industry is experiencing strong demand. In 2024, we are expecting to reach 1.82 million FTE and USD 38 billion in revenue. It is not a matter of a demand problem but a supply challenge.”
A supply challenge. We aren’t upskilling agents fast enough.
Now, when it comes to the ‘AI tax’ this one hits all of us directly. I’ve spoken to several sources within the consumer electronics field and there is worry for the entry level smartphone market. These are the phones you see being sold at P5,000 and below on TikTok. The margins for these phones are too small and revenue is derived by sheer volume. The industry predicts at least a 30% price increase across the board which means saying goodbye to “budget” phones released in 2026. Your P5,000 phone will now cost P7,500 and your P10,000 phone will cost somewhere below P15,000. Here’s some advice: if you are holding off buying a phone, now would be a good time to buy a 2024 model. The huge increase in price is due to global manufacturers shifting production to enterprise-grade HBM or “high bandwidth memory” – the RAM used to power data centers specifically for AI. Video cards, RAM modules (both DDR4 and DDR5), and really any sort of memory you find in a Nintendo Switch, gaming console, desktop, smartphone – expect a drastic increase in price.
How long will this last? Unlike the bitcoin mining rush during the pandemic, this trend may seem to last longer than a year. Some analysts are predicting 2-3 years max which means if you are in need of a desktop computer, you may want to buy pre-assembled ones from earlier this year as the DIY route will be roadblocked by expensive RAM. Companies like Crucial have already shuttered their consumer line of business, opting instead to manufacture high-margin RAM for the hyperscalers.
How ironic that the ChatGPT and Gemini we use on our phones contributed to these devices ultimately becoming more expensive. And how they may ultimately contribute to replacing jobs.
At the end of the day, sad to say, death and taxes – well, it’s all just business.
