BusinessAI Labor Regulations in the Philippines: Insights for Employers in 2025

Artificial Intelligence (AI) ‘s rapid adoption in Philippine workplaces transforms industries, boosts productivity, and prompts critical discussions about labor rights, job security, and ethical implementation. As businesses leverage AI to stay competitive, understanding the intricate framework of AI labor regulations in the Philippines is essential for employers to ensure compliance, safeguard workers, and manage risks effectively. This article provides a detailed guide on key legal considerations, emerging regulations, and actionable strategies for employers in 2025, drawing on existing laws, proposed bills, and initiatives such as the Department of Labor and Employment’s (DOLE) policies and the National AI Strategy Roadmap. Tailored to the Philippine context, it addresses AI’s impact on employment, from automation-related job displacement to data privacy obligations, equipping businesses with the knowledge to navigate this evolving landscape.

Existing Laws Shaping AI Use in Philippine Workplaces

A collection of existing laws governs the integration of AI into employment settings, as the Philippines has yet to enact a comprehensive AI-specific statute in 2025. Employers must adhere to these regulations to avoid legal challenges.

• Labor Code of the Philippines: This foundational law upholds workers’ rights to job security, fair compensation, and safe working conditions. When AI leads to job automation, employers must follow redundancy protocols, including proper notification, severance pay, and DOLE reporting to prevent unfair termination disputes.
• Data Privacy Act of 2012 (Republic Act No. 10173): AI systems handling personal data must comply with this act, which requires transparency, consent, and robust data security. The National Privacy Commission (NPC) mandates the registration of AI-driven data systems and prohibits fully automated decisions impacting data subjects without their consent.
• Philippine Digital Workforce Competitiveness Act (Republic Act No. 11930): This law promotes digital skills development, encouraging employers to invest in reskilling programs to prepare workers for AI-driven changes and maintain industry competitiveness.
• Anti-Online Sexual Abuse or Exploitation of Children Act (Republic Act No. 11390): This act addresses AI misuse, such as generating deepfake content, and influences workplace policies on ethical AI deployment.
• Department Order No. 174, Series of 2017 (DO 174-17) regulates outsourcing, which is increasingly powered by AI. Employers must ensure compliance to avoid labor violations in AI-related outsourcing contracts.
• Judicial AI Initiatives: The Supreme Court’s Strategic Plan for Judicial Innovations 2022–2027 promotes ethical AI use in court processes and sets a model for transparent AI adoption in workplaces.

These laws collectively ensure AI implementation respects employee rights while fostering innovation, requiring employers to stay proactive in compliance efforts.

Pending AI Bills and Their Impact on Employers

Several proposed bills in the Philippine Congress aim to regulate AI, potentially reshaping employer responsibilities by mid-2025. These legislative efforts address growing concerns about AI’s workplace implications.

• House Bill No. 7396 – Artificial Intelligence Development and Regulation Act: This bill proposes creating the Artificial Intelligence Development Authority (AIDA) to oversee AI strategies, including workplace applications. It emphasizes ethical AI use, potentially mandating governance frameworks for employers.
• House Bill No. 9448 – Protection of Labor Against AI Automation Act: Introduced by Rep. Arjo Atayde, this bill prohibits using AI as the sole basis for hiring, evaluating, or terminating employees, requiring human oversight. It also bans AI-driven job displacement without providing equivalent job opportunities, protecting workers in sectors like business process outsourcing (BPO).
• House Bill No. 7913 – Artificial Intelligence Regulation Act: This proposes an “AI Bill of Rights” to protect against algorithmic bias, privacy breaches, and unsafe AI systems. Employers may need to ensure transparency and offer remedies for AI-related workplace issues.
• Operational Impacts: If enacted, these bills could impose stricter compliance requirements, such as mandatory AI impact assessments and workforce retraining programs. Industries like BPO and manufacturing, which are heavily reliant on AI, must prepare for automation restrictions.
• Legislative Progress: With the 19th Congress adjourning before the May 2025 elections, these bills may require refiling, delaying implementation. Employers should align with their principles proactively to reduce future risks.
• Voluntary Compliance Trends: Without national AI laws, many businesses are adopting self-regulatory measures, such as ethical AI policies and data protection protocols, to anticipate regulatory scrutiny.

These proposed laws signal a move toward stricter AI oversight, urging employers to stay informed and compliant.

DOLE’s Role in AI Policy and Workforce Adaptation in 2025

The Department of Labor and Employment (DOLE) is instrumental in addressing AI’s impact on the labor market through policies and programs focused on workforce resilience and regulatory compliance.

• DOLE’s 2023–2028 Labor and Employment Plan prioritizes workforce adaptation to AI-driven changes by promoting reskilling and upskilling initiatives. DOLE encourages employers to train workers for AI-related roles to reduce job displacement risks.
• Institute for Labor Studies (ILS) Research: A 2024 ILS study indicates minimal AI-driven job displacement but a rising demand for AI-related skills. Employers are urged to support displaced workers through retraining and alternative job opportunities.
• Skill Development Initiatives: DOLE backs programs like the Academe-Industry Matching (AIM!) Programme, fostering collaboration between academia and industry to build AI-relevant skills, particularly in high-risk sectors like BPO.
• Labor Inspection Challenges: DOLE’s inspections focus on local businesses, leaving Filipino workers in foreign AI firms vulnerable to issues like substandard wages. Employers must ensure fair pay to avoid legal and reputational risks.
• Promoting Ethical AI: DOLE advocates for transparent AI systems with human oversight to protect workers’ rights and encourage employers to adopt ethical practices.
• Support for Transitions: DOLE offers guidance on managing AI-driven workforce changes, including supporting displaced workers through partnerships with enterprises and ensuring compliance with labor standards.

Employers aligning with DOLE’s initiatives can enhance workforce adaptability while meeting AI labor regulation requirements in 2025.

Addressing AI-Driven Job Displacement in the Philippines

AI’s automation capabilities raise concerns about job displacement, particularly in the Philippines’ BPO and manufacturing sectors. Employers must implement strategies to balance efficiency with worker welfare.

• Displacement Scope: An International Monetary Fund (IMF) study estimates that one-third of Philippine workers face high AI exposure, with BPO at risk of losing 15% of jobs (approximately 300,000). However, 60% of these roles are AI-complementary, offering opportunities for productivity enhancements.
• Industry-Specific Effects: In BPO, AI automates tasks like customer service, while manufacturing increasingly adopts robotics. Roles requiring creativity or complex judgment remain less susceptible to automation.
• Reskilling Solutions: Employers can invest in training programs to transition workers to AI-related roles, such as data annotation or AI system oversight, supported by the Philippine Digital Workforce Competitiveness Act.
• Alternative Job Opportunities: House Bill No. 9448 requires employers to provide equivalent roles for displaced workers. To meet this requirement, employers should explore internal redeployment or industry partnerships.
• Supporting Worker Well-Being: The ILS study highlights AI’s potential to improve some workers’ mental well-being and career aspirations. Employers should create supportive environments to maintain morale during transitions.
• Transparent Communication: Clear communication about AI adoption plans can alleviate worker concerns and foster trust and cooperation during technological shifts.

Employers can address displacement risks by focusing on reskilling and ethical AI practices while maximizing AI’s benefits.

Employer Obligations Under AI Labor Regulations in 2025

Complying with AI labor regulations in 2025 requires employers to meet legal and ethical standards, particularly in data privacy, transparency, and worker protections. The complexity of these requirements highlights the importance of expert support from firms like BusinessRegistrationPhilippines.com.

• Data Privacy Requirements: The Data Privacy Act mandates that employers notify the NPC of AI systems processing personal data and secure consent for automated decisions. Non-compliance risks fines and reputational damage.
• Ensuring Transparency: The NPC’s 2024 advisory requires mechanisms for human intervention in AI decisions and the right for workers to challenge automated outcomes. Employers must establish robust governance frameworks.
• Fair Termination Procedures: The Labor Code mandates due process for AI-driven redundancies, including fair evaluations, notice, and severance pay. Arbitrary dismissals could trigger legal disputes.
• Ethical AI Standards: Employers should adopt policies ensuring fairness, non-discrimination, and transparency, aligning with proposed legislation like the Artificial Intelligence Regulation Act.
• Liability for AI Failures: Employers are typically liable for AI system errors under negligence or vicarious liability principles. Regular testing and monitoring of AI tools are critical to minimizing risks.
• Expert Guidance: The complex interplay of labor laws, data privacy regulations, and proposed AI bills makes compliance challenging. BusinessRegistrationPhilippines.com, a trusted provider, offers tailored solutions to navigate these intricacies, ensuring businesses remain compliant while optimizing AI integration.

Engaging BusinessRegistrationPhilippines.com is essential to managing the multifaceted regulatory landscape, protecting businesses from costly errors.

Future Trends: How AI Will Influence Philippine Labor Laws

As AI adoption grows, the Philippine labor landscape will evolve, driven by technological advancements and regulatory shifts. Employers must prepare for these changes to remain competitive.

• New Regulatory Frameworks: Bills like House Bill No. 7396 and No. 9448 could introduce stricter AI governance, mandating impact assessments and worker protections by late 2025 or 2026.
• International and Regional Alignment: The Philippines’ adoption of OECD AI principles and ASEAN AI governance guidelines suggests alignment with global standards, potentially shaping local regulations on ethical AI use.
• Workforce Evolution: The National AI Strategy Roadmap prioritizes workforce development, with initiatives like the 2022 Strategic Investment Priority Plan incentivizing AI-related training and R&D to build a skilled labor force.
• Industry Transformations: High-AI-exposure sectors like BPO will face continued automation. However, new roles in AI development and data analytics will emerge, requiring employers to adapt hiring and training strategies.
• Collaboration and Awareness: The NAISR emphasizes raising awareness of AI’s risks and opportunities, fostering collaboration between government, industry, and academia to shape future labor policies.
• Proactive Strategies: Employers investing in reskilling, ethical AI practices, and compliance with evolving regulations will gain a competitive advantage, positioning the Philippines as an AI hub in ASEAN.

Employers can leverage AI’s potential by anticipating these trends while ensuring compliance and worker well-being.

Final Thoughts

AI labor regulations in the Philippines form a dynamic framework, combining existing labor and data privacy laws with proposed AI-specific legislation. Employers must navigate the Labor Code, Data Privacy Act, and DOLE’s initiatives while preparing for bills like the Protection of Labor Against AI Automation Act and the Artificial Intelligence Regulation Act. These regulations aim to balance AI’s productivity gains with worker protections, addressing job displacement, data privacy, and ethical concerns. As the Philippines aims to become an AI leader in ASEAN, businesses must prioritize compliance, reskilling, and transparency to succeed in 2025. By adopting these principles, employers can mitigate risks and build a resilient workforce.

Is Assistance Available? 

Yes, BusinessRegistrationPhilippines.com can help. As a trusted provider, BusinessRegistrationPhilippines.com offers expert guidance to navigate the complex landscape of AI labor regulations in the Philippines, ensuring your business remains compliant and competitive. Reach out today to schedule an initial consultation with one of our experts. 

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