Filipino businesses slow to embrace AI

State-run think tank Philippine Institute for Development Studies (PIDS) has called for a comprehensive strategy to accelerate artificial intelligence (AI) adoption among local businesses, warning that the country lags behind its regional peers despite widespread computer and internet access.

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In its study titled “Readiness for AI Adoption of Philippine Business and Industry: The Government’s Role in Fostering Innovationand AI-Driven Industrial Development,” PIDS found that only 14.9 percent of firms in the country currently use AI tools.

Adoption is concentrated in large companies located in urban centers, particularly those in the information and communications technology (ICT) and business process outsourcing (BPO) sectors.

Citing data from the Philippine Statistics Authority (PSA), the think tank noted that 90.8 percent of establishments nationwide have computers and 81 percent have internet access.

However, AI adoption remains limited, especially among micro, small, and medium enterprises (MSMEs). Overall, usage is estimated at just three percent across industries, with ICT and BPO firms at six to seven percent, and agriculture trailing at only 1.5 percent.

“The overall awareness of AI and other Fourth Industrial Revolution technologies remains notably low among Philippine firms, with only about one in five cognizant of these technologies,” the study said.

PIDS senior research fellow Francis Mark A. Quimba, former supervising research specialist Neil Irwin S. Moreno, and former research analyst Alliah Mae C. Salazar pointed to gaps in human capital as a key obstacle.