Artificial intelligence (AI) adoption in the Philippines is growing, with research from Amazon Web Services (AWS) showing that 64% of businesses in the country have seen increased revenue and 70% reported productivity gains from using AI.
“The key thing is that these businesses have already seen the benefits,” Nick Bonstow, director at Strand Partners, said during a media briefing at AWS Cloud Day 2025 in the Philippines. “If we’re already seeing reports of positive benefits at this very early stage, at this exploration stage, there is huge potential economically and for the wider business population, as they move through these stages.”
Strand Partners conducted the research on behalf of AWS. Bonstow noted that large enterprises are at risk of being left behind by startups that are moving faster in their AI adoption.
“Their (large enterprises) AI adoption is much more basic and focused on Stage 1,” he said. “So they are stuck at that stage. The resulting ‘two-tier’ AI economy could have lasting implications on a country’s future economic development.”
The research found that startups lead in AI innovation, with 45% already using AI, compared to only 8% of large enterprises. Barriers to adoption include a lack of skilled workers, cited by 57% of businesses, and compliance costs, which account for 19% of technology budgets.
“About 40% of startups are delivering a new AI product or service, compared to only 25% of large enterprises, showing a clear divide in innovation,” said Precious Lim, country general manager of AWS in the Philippines.
The report showed that 8 in 10 businesses are still in the exploration stage, applying AI to basic tasks, while 11% have integrated AI into business functions. Only 8% have reached the transformative stage of adoption.
Lim explained that many businesses face challenges because their data is not ready for AI use.
“Since AI needs clean and structured data to work, this becomes a challenge,” she said. “AI adoption requires data modernization first, and both should progress together.”
Despite the challenges, AI adoption continues to grow in the Philippines. In 2024 alone, 80,000 businesses adopted AI solutions, averaging more than nine every hour. In total, 250,000 businesses, or 21% of the country’s firms, are already using AI, reflecting a 50% year-on-year growth rate.
A shortage of skilled talent remains the leading obstacle. While many businesses have the technology and vision, 57% say they lack the people to implement AI. This gap could affect the country’s global competitiveness, as AI skills are expected to be required in 61% of jobs within three years. At present, only 26% of businesses feel their workforce is adequately prepared.
Funding also plays a role in AI growth. Nearly half (48%) of startups said that access to venture capital is crucial to support expansion and innovation in the country.