Despite near-universal access to computers and the Internet, Philippine firms remain slow in adopting artificial intelligence (AI), according to a new study by the Philippine Institute for Development Studies (PIDS).
The study, “Readiness for AI Adoption of Philippine Business and Industry: The Government’s Role in Fostering Innovation- and AI-Driven Industrial Development,” found that only 14.9 percent of companies currently use AI tools.
Adoption is concentrated in large firms located in urban centers, particularly those in information and communications technology (ICT) and business process outsourcing (BPO), the report said.
Citing data from the Philippine Statistics Authority (PSA), researchers noted that while 90.8 percent of businesses own computers and 81 percent have internet access, AI adoption remains minimal — especially among micro, small, and medium enterprises (MSMEs).
The authors — PIDS senior research fellow Francis Mark A. Quimba, former supervising research specialist Neil Irwin S. Moreno, and former research analyst Alliah Mae C. Salazar — identified several barriers to AI uptake. These include weak digital infrastructure, limited awareness of emerging technologies, skills shortages, and scarce funding opportunities.
“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 study observed.
Geographic disparities also persist. AI adoption is highest in Metro Manila and Calabarzon, while rural areas continue to lag. By sector, adoption rates are at 6–7 percent for ICT and BPO and just 1.5 percent for agriculture, with overall industry-wide adoption averaging only 3 percent.
The report acknowledged ongoing government initiatives aimed at strengthening AI readiness. The Department of Trade and Industry (DTI) has rolled out the National AI Strategy Roadmap and plans to establish a Center for AI Research (CAIR) to promote research and innovation.
The Philippine Development Plan (2023–2028) also highlights the role of emerging technologies, including AI, in revitalizing industry and services. However, the study noted that many firms remain in the early stages of digital transformation.
To accelerate adoption, the authors recommended interventions in three areas: market facilitation, capability building, and ecosystem coordination. They called for coordinated action across government agencies, increased investment in digital infrastructure and education, and clear governance frameworks to guide AI integration.
“AI has the potential to drive significant economic growth by enhancing productivity, reducing operational costs, and enabling the development of new products and services,” the study emphasized.
