Philippines businesses remain slow in adopting AI – study

MANILA, Philippines — Philippine businesses have been slow in adopting artificial intelligence (AI) with only 14.9 percent using the technology despite widespread internet access, according to the Philippine Institute for Development Studies (PIDS).

This was among the findings of the study titled Readiness for AI Adoption of Philippine Business and Industry: The Government’s Role in Fostering Innovation- and AI-Driven Industrial Development authored by PIDS senior research fellow Francis Mark Quimba, former supervising research specialist Neil Irwin Moreno and former research analyst Alliah Mae Salazar.

The study found that AI adoption in the country is concentrated in large companies in urban centers.

Sectors with the highest AI adoption were the information and communications technology at 7.19 percent and business process outsourcing at 5.94 percent.

AI use in the country has been limited even as data from the Philippine Statistics Authority showed that 90.8 percent of establishments in the country own computers and 81 percent have internet access.

The authors said key barriers to AI use include limited digital infrastructure, low awareness of Al technologies, skills gaps and insufficient funding opportunities.

“The overall awareness of AI and other Fourth Industrial Revolution technologies remains notably low among Philippine firms, with only about one in five firms being cognizant of these technologies,” the authors said.

These challenges are further compounded by regional disparities in digital infrastructure and business activity, leading to less developed regions to fall further behind in terms of technological adoption.

While the government has implemented strategies to promote AI adoption through the Department of Trade and Industry’s launch of the National AI Strategy Roadmap and the Center for AI Research, the authors said several barriers remain, particularly for micro, small and medium enterprises.

As such, the study recommends a strong focus by the government on infrastructure development, particularly by prioritizing the expansion of broadband connectivity especially in underserved areas.

The study said investments also need to be made in data centers and cloud computing facilities to support growing data needs.

In addition, the study cited the need to focus on human capital development by setting clear metrics for measuring AI talent development outcomes and offering upskilling programs.

The study also recommends working on regulatory frameworks, promoting public-private partnerships and crafting guidelines for the responsible use of AI.

“These roles should be implemented through coordinated action across government agencies,” the authors said.