Philippine enterprises are increasingly turning to artificial intelligence (AI) to develop new products and business opportunities, although data security and implementation costs remain major obstacles, according to a survey commissioned by Alibaba Cloud.
The survey found that 91% of Philippine respondents had a positive view of AI adoption, including 57% who said they were actively exploring or implementing the technology.
About 74% said they had already migrated all or most of their IT infrastructure to the cloud, providing a foundation for deploying AI applications and services.
Driving innovation and developing new business opportunities emerged as the leading AI objective among Philippine respondents at 68%. This was followed by cost savings and operational efficiency at 54%, improving customer experience at 51%, gaining a competitive advantage at 50%, and generating revenue growth at 39%.
However, 51% identified data privacy and security as the biggest barrier to wider AI adoption, while 41% cited high implementation costs.
“The pace of AI adoption in the Philippines is driven by two factors: large enterprises are pursuing AI initiatives as part of their top-level strategic digital transformation, while small and medium-sized enterprises (SMEs) are adopting software to meet their operational needs for cost reduction and efficiency improvement,” said Grant Gong, head of solutions architect at Alibaba Cloud Philippines.
Gong said businesses in the Philippine financial and retail sectors showed particularly strong interest in adopting AI.
Across the eight Asian markets covered by the survey, 90% of respondents said their organizations were optimistic about AI. Around 75% described the technology as indispensable to their business operations, while only 1% said AI was not a priority.
Spending plans reflected that interest. About 95% of the companies surveyed said they intended to increase investment in AI products. More than half planned to raise budgets by over 20% across infrastructure-as-a-service, platform-as-a-service, and model-as-a-service products.
Infrastructure remained the largest investment priority, with 69% planning to increase spending on computing, storage, and networking by more than 20%. Similar increases were planned by 61% for platform tools and 58% for model services.
Data analysis and decision-making was the most frequently cited AI application at 66%, followed by customer-service tools such as chatbots at 64%. Marketing and content creation accounted for 58%, product development and coding for 55%, and human resources operations for 38%.
Regional respondents nevertheless reported similar adoption problems. Data privacy and security concerns led the list at 48%, followed by implementation costs at 42% and insufficient internal expertise at 37%.
Regulatory and ethical concerns were cited by 31%, particularly among respondents in financial services, education, and the public sector. Other issues included system integration, limited access to suitable products, uncertain returns on investment, and the lack of clear business cases.
The findings also showed demand for AI systems tailored to particular industries. About 54% wanted more customized solutions, while 49% called for greater access to skilled workers and 45% sought more affordable products.
Dr. Feifei Li, chief technology officer and president of international business at Alibaba Cloud Intelligence Group, said: “The research findings reinforce Alibaba Cloud’s belief that AI, delivered on top of scalable, secure cloud infrastructure and models, will be the defining technology platform for the next decade.
“As we enter the agentic AI era, our focus is shifting from producing efficient tokens to enabling actionable outcomes. By building a comprehensive agentic cloud, we provide the critical infrastructure — such as runtime sandboxes and orchestration — that empowers enterprises to build the agent-native products of tomorrow seamlessly.”
The survey was conducted by NielsenIQ for Alibaba Cloud in mid-2025. It covered 1,000 IT decision-makers distributed evenly across Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, and Thailand.
