The Philippines ranked fifth among 25 major outsourcing destinations in artificial intelligence readiness, supported by high workforce AI literacy but held back by weaknesses in education and talent development, according to a new industry index.
The 2026 Global Outsourcing AI Readiness Index released by management consulting firm Ataraxis gave the Philippines a composite score of 69.05 out of 100.
The country trailed India, which scored 84.55; Brazil, 76.1; Malaysia, 75.65; and Hungary, 69.1. Hungary edged the Philippines by just 0.05 point.
The index assessed outsourcing destinations based on population AI adoption, workforce AI literacy, enterprise AI adoption, and the AI education pipeline. The four sub-index scores were averaged to determine each country’s overall ranking.
Workforce AI literacy emerged as the Philippines’ strongest area. The country scored 76 and tied Brazil for second place, behind only India. Ataraxis said the Philippines and Brazil were the only countries outside India to score above 70 in this category.
The Philippines also outperformed Hungary in workforce AI literacy, 76 against 54, and enterprise AI adoption, 71 against 67. Hungary’s narrow lead in the overall ranking was largely driven by its higher population AI adoption score of 86, compared with the Philippines’ 69.
However, the Philippines scored only 52 in the AI education pipeline, placing 15th among the 25 outsourcing destinations and last among the five highest-ranked countries.
Malaysia scored 84 in the category, followed by India at 83, while Brazil and Hungary both received 69. The results placed the Philippines at least 17 points behind every other country in the top five, raising questions about whether its supply of AI-skilled workers can keep pace with demand.
“The Philippines has already proven it can staff the AI era — its workforce AI literacy rivals countries with far larger tech sectors. The open question is whether the education pipeline catches up quickly enough to keep that talent pool growing at the pace enterprise demand will require,” Ataraxis CEO and founder George Atuahene said.
Within Southeast Asia, the Philippines ranked second behind Malaysia, with a gap of 6.6 points. It was eight points ahead of Indonesia, which scored 61.05.
Ataraxis said the scores are relative to the 25 outsourcing destinations covered by the index and should not be interpreted as percentages of an absolute AI-readiness benchmark.
