Investments in artificial intelligence and other emerging technologies must be accompanied by spending on skills, data systems and governance if the Philippines is to translate digital transformation into higher productivity, according to the Philippine Institute for Development Studies (PIDS).
PIDS said technology alone would not deliver sustained economic gains without institutions capable of coordinating, implementing, evaluating and maintaining digital initiatives.
The issue was raised during the kickoff press conference for the 24th Development Policy Research Month, which carries the theme “Building Strong Institutions, Unlocking Human Capital Potential.”
Panelists said digital transformation should not be treated simply as the acquisition of new hardware, software or platforms. Its benefits also depend on whether government agencies, workers and businesses have the skills and organizational capacity to adopt and use the technology effectively.
They also stressed that AI investments should be supported by capable workers, reliable data systems and appropriate governance mechanisms as emerging technologies reshape workplace skills and operations.
The discussion reflected the findings of the PIDS paper, “Reshaping Economic Institutions for Transformational Partnerships in Human Capital Development,” which examined why reforms and spending in education, health, social protection and skills development have not consistently translated into productivity and economic transformation.
“The Philippine development challenge is not the absence of reform,” the paper said, pointing instead to constraints in how investments are “coordinated, implemented, sustained, and evaluated.”
The paper identified four institutional problems: fragmented programs and poor coordination, uneven implementation capacity, short policy horizons and weak government commitment, and shortcomings in institutional learning and incentives.
PIDS said these weaknesses are reflected in continuing gaps in education outcomes, health-system integration, skills matching, business participation and productivity despite reforms and increased human capital spending.
The state think tank called for government agencies and other institutions to coordinate around common human capital targets, make credible long-term commitments, improve information and evaluation systems, and align incentives for public and private investment.
It also advocated a shift from a program-centered approach to an institution-centered model connecting education, health, workforce training, labor-market opportunities, innovation and productive enterprises.
The Development Policy Research Month will run throughout September, with policymakers, researchers and other stakeholders expected to discuss how institutional reforms could improve the economic returns from investments in people and technology.
