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Philippines AI & BPO Policy Tracker: Key Laws 2026

A guide to the Philippine government's 2026 AI and BPO policies, covering new connectivity laws, CREATE MORE tax incentives, and the pending national AI bill.

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Philippines AI & BPO Policy Tracker: Key Laws 2026

The past twelve months have produced a significant stack of policy changes affecting the Philippine BPO industry. A connectivity law took effect without a presidential signature, the tax incentives code was rewritten, a work-from-home rule was reinforced, and the country's first serious national AI bill is still moving through Congress. Each development shifts the operating environment for BPO companies and, in several cases, the job security picture for the workers they employ.

This article draws on the BPOAI.ai Philippine BPO Policy Tracker, verified against official sources including Lawphil statute text, FIRB releases, and Philippine news outlets as of 6 August 2026.

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What Philippine BPO Companies Need to Know About 2026 Policy Changes

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The Konektadong Pinoy Act Opens the Connectivity Market

Republic Act No. 12234, the Konektadong Pinoy Act, lapsed into law on 24 August 2025 after the President took no action on the enrolled bill. Implementing rules followed on 5 November 2025. The core change is structural: data transmission providers no longer need a congressional franchise to operate. Registration with the National Telecommunications Commission is now sufficient to enter the market.

For BPO operators, especially those running provincial delivery sites, this matters for two reasons: redundancy and price. Sites that have long relied on a single provider now face a market where new entrants face a lower barrier to entry. The implementing rules also mandate infrastructure sharing on fair and non-discriminatory terms, with administrative fines ranging from PHP 50,000 to PHP 5,000,000 per violation. The Philippine Chamber of Telecommunications Operators opposed the law, so early implementation may see friction. The first wave of NTC registrations will be the real indicator of how quickly competition develops.

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CREATE MORE Sets the Tax Baseline for Registered BPOs

Republic Act No. 12066, the CREATE MORE Act, was signed on 8 November 2024 and remains the tax foundation for registered BPO and outsourcing firms. Key figures under the current rules include:

  • BPO companies may place up to 90% of their registered-project workforce on work-from-home arrangements without losing incentives.
  • A 100% additional deduction applies to power expenses used for registered activity.
  • The gross income tax rate sits at 2%.
  • Firms may shift up to 50% of their workforce without triggering incentive penalties.

As of mid-2026, over 440 companies had applied to transfer registration to the Board of Investments under the new framework, signaling that the incentive structure is actively reshaping where and how outsourcing companies register their operations.

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The AI Bill and What Comes Next

The Philippines does not yet have a national AI law. The most advanced legislative attempt as of August 2026 is still pending in Congress, making the Philippines a late mover compared to some regional peers. For BPO companies and BPO industry news watchers, the bill's progress matters: it is expected to define liability standards, data governance obligations, and potentially create new compliance requirements for AI call center and AI-assisted service operations.

Until the bill passes, companies operating AI-enabled services in the Philippines are working under a patchwork of existing data privacy rules and sector-specific guidance. Tracking the bill's committee stage is now standard due diligence for any firm building AI into its Philippine outsourcing operations.

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