AI and Philippine's economic strategic directions

THE economist Joseph Schumpeter observed that especially capitalist economies climbed to the next stage of development by adopting new technologies.

- By Cesar Polvorosa, Jr.

The process is necessarily disruptive as in the process of creating the new, the old is destroyed and thus, the term "Creative Destruction." Historically, this incessant process of development encompasses diverse products, from railroads to smartphones to electric cars etc. The latest, and potentially the most transformative in decades, is Artificial Intelligence or AI.

AI is reconfiguring global economic structures with the speed and force of a truly revolutionary technology that transforms production, trade, services, governance, and the nature of work itself. Its impact is now comparable to historical technological shifts that altered national trajectories. In Asia, AI is accelerating competitive realignments that echo, though on a far more rapid scale, the economic divergences I previously explored in my analysis on Vietnam and the Philippines.* As a young Central Bank economist, I also published with the Central Bank Review on the Thai economy catching up with the Philippines.

This broader regional transformation provides a useful context for assessing how the Philippines can position itself strategically, and thus, a closer examination of the country's AI readiness becomes vital. While I draw on the broad priorities outlined in the National Artificial Intelligence Strategy Roadmap (NAISR) 2.0, it goes beyond the roadmap by offering a critical evaluation of implementation gaps, assessing sectoral vulnerabilities, and grounding the discussion in current economic data. Thus, the analysis complements but does not duplicate NAISR 2.0 by situating AI within the Philippines' broader development, labor-market, and competitiveness challenges.