The Philippines stands to gain P2.8 trillion in economic benefits if businesses and organizations harness the potential of artificial intelligence (AI), according to the Google-commissioned study conducted by Access Partnership.
According to Fraser Thompson, principal of Economics Strategy at Access Partnership, the figure is derived from AI’s ability to enhance productivity, streamline operations, and foster innovation across multiple sectors. He noted that the key industries that could benefit from this development include professional services, manufacturing, consumer retail, and hospitality.
“AI has the potential to significantly boost the Philippine economy, creating a range of economic benefits from improving routine tasks to enhancing creativity and public sector services,” Thompson said.
He also noted that their study focused on generative AI (GenAI), which has become a phenomenon since its introduction for mainstream use in late 2022, and machine learning (ML), which has been in use for a while.
The report “Economic Impact Report: Growing the Philippines’ AI opportunity with Google” saw that in the professional services sector, AI is helping reduce response times significantly, enhancing customer service efficiency. In manufacturing, AI-driven production processes are improving efficiency and reducing waste. In consumer retail and hospitality, AI technologies such as chatbots and advanced inventory management systems are boosting productivity and customer satisfaction.
Challenges
One of the major challenges identified that could hinder the realization of economic benefits is the digital skills gap. Ensuring that the workforce is equipped with the necessary skills to leverage AI technologies is crucial. Thompson emphasized the importance of upskilling the current workforce and integrating AI training into educational programs.
“Addressing the digital skills gap is essential,” Thompson said. “We need to make sure that AI skills are accessible to different parts of the population to maximize the benefits of these technologies.”
Google’s various products and services, including Google Maps, Google Search, and Google Ads, have already made significant contributions to the Philippine economy, according to Thompson. These tools have not only enhanced business operations but also created approximately 278,300 jobs directly related to their ecosystem, with an additional 115,200 jobs linked to the broader Android ecosystem. The widespread adoption of these tools by Philippines businesses underscores the importance of digital platforms in driving economic growth.
“Google’s products and services have been instrumental in driving economic activity and creating jobs in the Philippines,” noted Thompson. “The benefits extend far beyond consumer convenience, impacting business efficiency and job creation,”
Use cases
Thompson highlighted a few sector-specific benefits of AI adoption:
In Agriculture AI helps optimize crop yields by analyzing soil conditions and weather patterns, improving farming efficiency. In logistics, the technology can streamline it by integrating various data points, such as weather conditions and traffic patterns, to optimize delivery routes and reduce travel time. For the BPO industry, Thompson said AI is creating new opportunities in the business process outsourcing (BPO) sector, with increased demand for IT skills and improved productivity.
“AI’s impact spans across every sector, from agriculture to logistics to BPO. It’s exciting to see how these technologies are being adopted and creating value in diverse areas,” Thompson said.
AI policy
The development plan for AI in the Philippines aims to harness the technology to improve public services and drive economic growth. The focus on ethical AI implementation and robust policy support will be critical in ensuring that the benefits of AI are widely shared across all segments of society.
Thompson emphasized that the journey of AI adoption is just beginning.
“The potential for AI to transform the Philippine economy is immense,” he said. “With continued investment in digital skills and supportive policies, we can unlock substantial economic benefits and improve the lives of millions of Filipinos.”
Edited to P2.8 trillion instead of $2.8 trillion.