In its study “Readiness for AI Adoption of Philippine Business and Industry: The Government’s Role in Fostering Innovation- and AI-Driven Industrial Development” released on Sunday, September 14, PIDS found that only 14.9% of firms use AI tools.

This percentage is concentrated among large companies in urban centers, particularly the Information and Communications Technology (ICT) fields with 7.19% and Business Process Outsourcing (BPO) sectors with 5.94%, while firms with Micro, Small, and Medium Enterprises (MSMEs) remain minimal even though 81% of companies have internet access and 90.8% own computers, based on the data from the Philippine Statistics Authority (PSA).

The PIDS study’s authors, Francis Mark A. Quimba, former supervising research specialist; Neil Irwin S. Moreno, senior research fellow; and Alliah Mae C. Salazar, former research analyst, noted several key challenges that limit businesses in AI adoption including weak digital infrastructure, lack of knowledge of AI-related skills gaps, and insufficient financing opportunities.

Furthermore, these barriers were aggravated by regional differences in business endeavors and digital infrastructure, leaving less developed regions to fall farther behind in terms of adopting AI.

With the recent results, the authors proposed three interventions to accelerate the adoption: market facilitation, capability building, and ecosystem engagement.