Philippine firms struggle to move from AI access to adoption despite digital readiness

Artificial intelligence (AI) is becoming more accessible to businesses in the Philippines, but most companies are still struggling to adopt the technology due to infrastructure gaps, limited funding, skills shortages, and governance challenges, according to new findings from the Philippine Institute for Development Studies (PIDS).

The study found that while digital access is relatively widespread, 90.8% of business establishments own computers and 81% have internet connectivity, only 14.9% use AI tools, and overall AI adoption across industries remains at just 3%.

The findings suggest that access to technology alone is insufficient to drive AI transformation, particularly among micro, small, and medium enterprises (MSMEs), which often lack the financial resources and technical capabilities needed to implement AI solutions.

PIDS identified four major barriers slowing adoption: inadequate digital infrastructure, low awareness of AI technologies, workforce skills gaps, and limited funding opportunities.

Technology services company TELUS Digital Philippines said its own experience demonstrates that successful AI implementation requires more than deploying new tools. The company has introduced AI hackathons, learning platforms, and internal training programmes to encourage employees across different functions, not just technical teams, to integrate AI into their daily work.

TELUS Digital has also developed Fuel iX, its proprietary AI platform, which provides employees with AI capabilities within a secure environment designed to meet the company's data protection and responsible AI governance standards.

According to the company, these investments have already improved operational efficiency. One internal initiative used AI to analyse more than 15,000 employee survey comments from over 25,000 team members, reducing analysis time by 70% and enabling HR specialists to focus on developing action plans instead of manually reviewing feedback.

"What we've learned is that even with the right technology in place, adoption doesn't happen on its own," said Anne Munoz, Country Vice President of TELUS Digital Philippines.

"People need to understand why it matters, feel confident using it, and trust that it's being used responsibly. That's what we've focused on building internally. But for most businesses in the Philippines, the bigger obstacle is getting to that starting point in the first place. That's why the infrastructure investment, funding mechanisms, and governance frameworks the country is working toward are so important," she added.

As AI adoption continues to accelerate globally, the report highlights the need for closer collaboration between government, industry, and the private sector to strengthen digital infrastructure, expand AI skills development, improve access to funding, and establish governance frameworks that support responsible AI adoption across Philippine businesses.