Hello and good morning po.

The area my team has been working on is focused on the socio-

economic implications of artificial intelligence (ai) and automation of works in the Philippine
service sector. But before I begin, I would like to point out three focus areas from our research
poster:

Three focus areas:

a. The first focus area would be the Philippine Inclusive Innovation Industrial Strategy
(i³S).
b. Economic impact of automation and AI
c. Country’s standing with the coming of the 4th industrial revolution.

How we could see this as an issue that would concern the accounting field is that
accountancy is in itself part of the service sector among other occupations that have contributed
greater than 50% of the country’s GDP for more a decade. In order to create a balance between the
service sector, manufacturing sector and agricultural sector, the government funded the (i³S). This
government policy allowed for a joint competition between the said sectors, promoting distributed
employment within each sector to fully maximize economic productivity of the country.

What seemed problematic is that in 2020, the Asian Development Bank Institute reported
that a shift in automation resulted to a net positive employment impact that was only evident in the
manufacturing sector, whereas service forms of occupations had an overall net job loss in the
country as many businesses adapted to either partial or full automation in 2020, which is the year
when the pandemic had begun to change the country’s economic climate. What’s alarming is the
tendency for most firms to choose this form of investment rather than relying on human capital
considering the fact that machineries have proven to outperform what humans can do in certain
areas.

With more than 50% of employed Filipinos belonging to the service sector, many may lose
their jobs if the government is not prepared to create a balance between machinery and human
capital.

Moving over to the implications of the study, Oxford Economics in 2018 wrote that as
productivity increases through AI, a decline in traditional occupations shall occur by 2028 in
ASEAN countries. The problem is that although it is studied that automation and AI have the

作成した/終わった: 03-06-2021
Alcera, Vincent Luigil C.
potential to both replace while at the same time create new jobs, the Philippines may not be ready
to cover for unexpected shifts from traditional to automated labor when the government fully puts
its attention to technological change rather than an equilibrium between human labor and
machinery. The dependence on automation could even potentially narrow opportunities for Small-
Medium Enterprises (SMEs) to operate and grow, theoretically leading to a surge of criminal
activities due to possible increases in unemployment rates.

If no effort is done to balance the change between AI and employment, the government’s
effort in investing on the i³S would only be of waste. Here we have a graph from the Global
Innovation Index where the Philippines was ranked 3 rd out of 125 countries in high-tech imports.
However, we are only ranked 86 th in both human capital (ability to perform labor) and market
sophistication (awareness of the marketplace) while 114 th in education. This basically proves how
unprepared we are for such change as a developing nation.

We know that investing in automated technologies would result to higher economic

productivity, which would lead to a tendency for firms to prefer this type of set-up rather than
depending on human capital alone (as seen in Asian Development Bank’s findings in 2020). That is
why my team suggested that a policy must be set in order to identify new skills and jobs if the
country is to compete among its developed and developing neighbors. Failure to do so would result
to complications with regards to subsidies in order to cover for potential surges in the country’s
unemployment. Relying on developed countries to cover for this would not benefit the Philippines
considering our ten (10) trillion-peso debt incurred in 2020. I mean, we’ve already read Birdsall’s
perspective on international aid, right?

Overall, the improvements in automation and artificial intelligence through research on

human and software linkage is only but inevitable. If no effort is done to balance the change
between AI and employment in the labor force, the government’s effort in investing on the i³S
would only hinder the country’s development in years to come.

作成した/終わった: 03-06-2021
Alcera, Vincent Luigil C.