AI Labor Law in the Philippines: What Employers Need to Know in 2025

August 11, 2025

Artificial Intelligence (AI) is reshaping workplaces across the Philippines, driving efficiency and innovation while raising critical questions about labor rights, job security, and ethical implementation. As businesses increasingly adopt AI technologies, navigating the complex landscape of AI labor law in the Philippines is essential for employers to ensure compliance, protect workers, and mitigate risks. This article outlines key legal considerations, regulatory frameworks, and practical steps for employers in 2025, drawing on existing laws, proposed legislation, and government initiatives like the Department of Labor and Employment’s (DOLE) policies and the National AI Strategy Roadmap. With insights tailored to the Philippine context, it addresses how AI impacts employment, from job displacement concerns to data privacy obligations. It offers a comprehensive guide for businesses to align with evolving regulations.

Current Legal Framework Governing AI in the Philippine Workplace

Integrating AI into workplaces is governed by a patchwork of existing laws, as the Philippines lacks a comprehensive AI-specific statute as of 2025. Employers must align with these regulations to avoid legal pitfalls.

Labor Code of the Philippines: The Labor Code remains the cornerstone of employment law, emphasizing workers’ rights to security of tenure, fair wages, and humane working conditions. When AI automates roles, employers must comply with redundancy provisions, including providing due notice, separation pay, and notifying DOLE to avoid unfair dismissal claims.
Data Privacy Act of 2012 (Republic Act No. 10173): AI systems processing personal data must adhere to this act, which mandates transparency, consent, and security in data handling. The National Privacy Commission (NPC) requires registration of AI-driven data processing systems and prohibits fully automated decisions affecting data subjects without consent.
Philippine Digital Workforce Competitiveness Act (Republic Act No. 11930): Enacted to enhance digital skills, this law supports workforce reskilling to address AI-driven changes and encourages employers to invest in training programs to maintain competitiveness.
Anti-Online Sexual Abuse or Exploitation of Children Act (Republic Act No. 11390): This law addresses AI misuse, such as creating deepfake content, which could impact workplace policies on ethical AI use.
Department Order No. 174, Series of 2017 (DO 174-17): Regulates outsourcing arrangements, which are increasingly AI-driven. Employers must ensure compliance to avoid labor violations when contracting AI-related services.
Supreme Court Initiatives: The judiciary’s Strategic Plan for Judicial Innovations 2022–2027 promotes AI use in court operations, setting a precedent for ethical and transparent AI adoption in workplaces.

These laws collectively ensure that AI implementation respects workers’ rights while fostering innovation. Employers must stay vigilant to comply with these overlapping regulations.

Proposed AI Legislation and Its Implications for Employers

Several pending bills in the Philippine Congress aim to regulate AI, potentially reshaping employer obligations by mid-2025. These proposals reflect growing concerns about AI’s impact on labor.

House Bill No. 7396—Artificial Intelligence Development and Regulation Act: This bill proposes establishing the Artificial Intelligence Development Authority (AIDA) to oversee the national AI strategy, including workplace applications. It emphasizes ethical AI use and potentially requires employers to adopt governance frameworks.
House Bill No. 9448 – Protection of Labor Against AI Automation Act: Authored by Rep. Arjo Atayde, this bill prohibits using AI as the sole basis for hiring, assessing, or terminating employees, mandating human oversight. It also bans AI-driven displacement unless equivalent job opportunities are provided, aiming to protect workers in sectors like business process outsourcing (BPO).
House Bill No. 7913 – Artificial Intelligence Regulation Act: This proposes an “AI Bill of Rights,” including protections against algorithmic discrimination, privacy violations, and unsafe AI systems. Employers may need to ensure transparency and provide remedies for AI-related grievances.
Impact on Business Operations: If passed, these bills could impose stricter compliance requirements, such as mandatory AI impact assessments and employee retraining programs. Businesses in high-AI-exposure sectors like BPO and manufacturing must prepare for potential restrictions on automation.
Legislative Timeline: With the 19th Congress adjourning before the May 2025 midterm elections, these bills may need refiling, delaying implementation. However, employers should proactively align with their principles to mitigate future risks.
Self-Regulation Trends: In the absence of national laws, many enterprises are adopting self-regulatory measures, such as ethical AI guidelines and data privacy protocols, to preempt regulatory scrutiny.

These proposed laws signal a shift toward stricter AI governance, urging employers to monitor legislative developments closely to stay compliant.

DOLE’s AI Policy and Workforce Development in 2025

The Department of Labor and Employment (DOLE) plays a pivotal role in addressing AI’s impact on the labor market through policies and initiatives focused on workforce resilience and compliance.

DOLE’s 2023–2028 Labor and Employment Plan emphasizes adapting to AI-driven changes by promoting reskilling and upskilling. DOLE encourages employers to invest in training for AI-related roles to minimize job displacement.
Institute for Labor Studies (ILS) Findings: A 2024 ILS study found that AI has caused minimal job displacement but increased demand for AI-related occupations. Employers are encouraged to support displaced workers through retraining and alternative employment opportunities.
Workforce Development Programs: DOLE supports programs like the Academe-Industry Matching (AIM!) Programme, fostering collaboration between academia and industry to develop AI-relevant skills, particularly in high-risk sectors like BPO.
Labor Inspection Limitations: DOLE’s labor inspectors focus on local establishments, leaving Filipino workers in foreign AI firms vulnerable to exploitation, such as below-minimum-wage pay. Employers must ensure fair compensation to avoid reputational and legal risks.
Ethical AI Adoption: DOLE advocates for ethical AI use, urging employers to implement transparent AI systems and maintain human oversight to protect workers’ rights.
Support Mechanisms: DOLE guides the management of AI transitions, including support for displaced workers through government-enterprise partnerships, ensuring compliance with labor standards.

Employers aligning with DOLE’s policies can enhance workforce adaptability while maintaining compliance with AI labor regulations in 2025.

AI Job Displacement and Mitigation Strategies

AI’s potential to automate tasks raises concerns about job displacement, particularly in the Philippines’ BPO and manufacturing sectors. Employers must adopt strategies to balance efficiency with worker protection.

Scale of Displacement: An International Monetary Fund (IMF) study estimates that one-third of Philippine workers are highly exposed to AI. BPO faces the highest risk, potentially losing 15% of jobs (approximately 300,000). However, 60% of these roles are also highly complementary to AI, suggesting opportunities for productivity gains.
Sector-Specific Impacts: In BPO, AI automates routine tasks like customer support, while manufacturing sees increased use of robotics. Creative and nuanced roles remain less vulnerable, requiring human judgment.
Mitigation Through Reskilling: Employers can invest in training programs to transition workers to AI-related roles, such as data annotation or AI system management, as supported by the Philippine Digital Workforce Competitiveness Act.
Alternative Employment Opportunities: House Bill No. 9448 mandates providing equivalent jobs for displaced workers. Employers should explore redeployment within their organizations or partner with other industries.
Employee Well-Being: The ILS study notes AI’s positive impact on some workers’ mental well-being and career aspirations. Employers should foster a supportive environment to maintain morale during transitions.
Proactive Communication: Transparent communication about AI adoption plans can reduce worker anxiety and ensure trust and cooperation during technological shifts.

Employers can mitigate displacement risks by prioritizing reskilling and ethical AI use while leveraging AI’s benefits.

Employer Responsibilities Under AI Labor Regulation in 2025

Navigating AI labor regulation in 2025 requires employers to uphold legal and ethical standards, particularly in data privacy, transparency, and worker rights. The complexity of compliance underscores the need for expert guidance from firms like Triple i Consulting.

Data Privacy Compliance: Under the Data Privacy Act, employers must notify the NPC of AI systems processing personal data and ensure data subjects’ consent for automated decisions. Failure to comply risks penalties and reputational damage.
Transparency and Accountability: The NPC’s 2024 advisory mandates mechanisms for human intervention in AI decisions and the right for workers to contest automated outcomes. Employers must implement clear governance frameworks.
Fair Termination Practices: The Labor Code requires due process for redundancies caused by AI automation, including fair assessments, notice, and separation pay. Arbitrary dismissals could lead to legal challenges.
Ethical AI Guidelines: Employers should adopt ethical AI policies that ensure fairness, non-discrimination, and transparency, aligning with proposed bills like the Artificial Intelligence Regulation Act.
Liability for AI Errors: Employers are generally liable for AI system malfunctions under negligence or vicarious liability principles. Regular testing and monitoring of AI tools are essential to minimize risks.
Consulting Experts: The intricate interplay of labor laws, data privacy regulations, and proposed AI bills makes compliance challenging. Triple i Consulting, a trusted provider, offers tailored solutions to navigate these complexities, ensuring businesses remain compliant while optimizing AI integration.

Partnering with Triple i Consulting is critical to address the multifaceted legal landscape, safeguarding businesses from costly oversights.

Future Outlook: How AI Will Shape Labor Law in the Philippines

As AI adoption accelerates, the Philippine labor landscape will continue to evolve, driven by technological advancements and regulatory developments. Employers must prepare for these changes to stay competitive.

Emerging Regulatory Frameworks: The passage of bills like House Bill No. 7396 and No. 9448 could introduce stricter AI governance, requiring mandatory impact assessments and workforce protections by late 2025 or 2026.
Global and Regional Influences: The Philippines’ adoption of OECD AI principles and ASEAN AI governance guidelines suggests alignment with international standards, potentially influencing local regulations on ethical AI use.
Workforce Transformation: The National AI Strategy Roadmap emphasizes workforce development, with initiatives like the 2022 Strategic Investment Priority Plan incentivizing AI-related training and R&D, fostering a skilled labor force.
Sectoral Shifts: High-AI-exposure sectors like BPO will see continued automation. However, new roles in AI development and data analytics will emerge, requiring employers to adapt hiring and training strategies.
Public Awareness and Collaboration: Raising awareness of AI’s risks and opportunities, as highlighted in the NAISR, will encourage collaboration between government, industry, and academia, shaping future labor policies.
Proactive Adaptation: Employers who invest in reskilling, ethical AI practices, and compliance with evolving laws will gain a competitive edge, positioning the Philippines as an AI hub in ASEAN.

Employers can harness AI’s potential while ensuring compliance and worker welfare by staying ahead of these trends.

Final Insights

AI labor law in the Philippines is a dynamic and evolving field, blending existing labor and data privacy regulations with proposed AI-specific legislation. Employers must navigate the Labor Code, Data Privacy Act, and DOLE’s policies while preparing for bills like the Protection of Labor Against AI Automation Act and the Artificial Intelligence Regulation Act. These frameworks balance AI’s productivity benefits with worker protections, addressing job displacement, data privacy, and ethical concerns. As the Philippines strives to become an AI hub in ASEAN, businesses must prioritize compliance, reskilling, and transparency to thrive in 2025. By aligning with these principles, employers can mitigate risks and foster a resilient workforce.

Is Assistance Available?

Yes, Triple i Consulting can help. As a trusted provider, Triple i Consulting offers expert guidance to navigate the complex landscape of AI labor law in the Philippines, ensuring your business remains compliant and competitive. Contact us today to schedule an initial consultation with one of our experts: