Artificial intelligence adoption among Philippine businesses grew 52% over the past year, with 32% of companies now using the technology, up from 21% in 2025, according to a study commissioned by Amazon Web Services (AWS).
The increase represents more than 396,000 Philippine businesses and exceeds the 50% growth rate recorded in the previous year’s report, according to the “Unlocking the Philippines’ AI Potential 2026” study.
Technology companies had the highest AI adoption rate at 49%, followed by financial services at 45% and professional services at 40%.
The study also found that businesses using AI reported higher productivity and revenue gains. About 74% of adopters said AI improved productivity, up from 70% in 2025, while 68% reported increased revenue, compared with 64% previously.
AI adopters recorded average revenue growth of 20%, exceeding the 15% projected in the previous report. Meanwhile, 83% of businesses using AI expected the technology to contribute to growth over the next 12 months.
Despite the increase in adoption, most businesses remain at an early stage of implementation.
About 70% of AI adopters primarily use basic applications, including public chatbots, productivity tools, and ready-made solutions. This was down from 78% in 2025.
Another 18% have integrated AI across multiple business functions, while 12% have reached more advanced levels of adoption involving custom systems, multiple AI models, agentic AI, or autonomous technologies. The latter figure rose from 8% last year.
Only 17% of businesses have a formal roadmap for expanding AI use across their operations, while 57% remain in the exploration or experimentation stage.
Nevertheless, 79% of respondents expect to increase their AI use over the next year, and 84% believe the technology will significantly transform their industries within five years.
Readiness for advanced AI technologies remains limited, with only 19% of companies considering themselves fully or very ready to adopt tools such as agentic AI.
The biggest obstacle is the shortage of AI and digital skills, cited by 47% of businesses. Other barriers include technical or data-related issues at 39%, insufficient financial resources at 36%, and limited workforce capacity at 33%.
Businesses estimated that only 31% of their employees were confident using advanced AI tools. Just 24% were confident in determining whether sensitive information could be processed by AI in compliance with applicable requirements.
However, 88% of respondents expected AI-related skills to become more important over the next five years.
AI governance also remains limited. Only 12% of Philippine businesses have a formal and comprehensive responsible AI framework, although 61% consider strong AI governance a competitive advantage.
The study also found that companies with formal responsible AI frameworks were more likely to report fully integrating AI into their operations.
The report identified government leadership as another factor in accelerating adoption. About 71% of businesses said public-sector leadership was crucial to expanding AI use, while 74% called for stronger collaboration between government and technology providers.
To support broader adoption, the report recommended that businesses improve data quality, integration, cloud infrastructure, and governance before deploying more advanced AI systems.
It also urged companies to establish measurable business outcomes for AI projects and use performance data to determine which initiatives should be expanded, refined, or discontinued.
The report called for AI literacy programs that extend beyond technical teams, along with investments in employees’ judgment and oversight skills. It also recommended clearer rules on when workers should trust, challenge, or override AI-generated outputs.
For the government, the report recommended wider use of AI in public services, incentives for adoption, clearer regulations, and collaboration with industry on sector-specific guidance identifying tasks suitable for automation and those that should remain under human control.
Strand Partners conducted the research for AWS, surveying 1,000 Philippine business leaders and 1,000 nationally representative members of the public.
