Only 22% of organizations in the Philippines are fully prepared to implement artificial intelligence (AI), according to the latest report from technology company Cisco. The report, based on a survey of 3,660 senior business leaders across Asia-Pacific, Japan, and China (APJC), shows a modest improvement from 17% last year.
However, this readiness level shows a significant challenge for businesses aiming to leverage AI’s potential to enhance operations and drive growth.
“This year’s AI Readiness Index reveals that to fully leverage the potential of AI, companies need a modern digital infrastructure capable of meeting evolving power needs and network latency requirements from growing AI workloads,” Zaza Soriano-Nicart, managing director of Cisco Philippines, said in a media release. “This must be supported with the right visibility to achieve their business objectives.”
The report identifies six pillars critical to AI readiness: strategy, infrastructure, data, governance, talent, and culture. While many organizations have increased urgency around AI, spurred by pressure from senior leadership, a gap remains in deploying these technologies effectively. In the Philippines, 98% of businesses feel this urgency, yet infrastructure limitations and a shortage of skilled talent continue to impede progress.
IT budget
Cisco’s data reveals that 65% of companies are dedicating between 10% and 30% of their IT budget to AI, focusing on areas like cybersecurity, data analysis, and IT infrastructure. Despite these investments, many are not seeing the anticipated returns.
“Companies recognize that investments are necessary,” Soriano-Nicart said. “However, the infrastructure must be in place to ensure these investments are worthwhile and deliverable.”
The study highlights that infrastructure challenges — such as insufficient compute power, outdated network performance, and cybersecurity vulnerabilities — are significant obstacles. Only 22% of surveyed organizations reported having adequate GPUs to manage current and future AI demands, while just 45% have end-to-end data security measures, including encryption, monitoring, and rapid threat response.
“There is mounting pressure and urgency from leadership to implement AI technologies,” Soriano-Nicart said.
Skills shortage
She noted that over half of companies report AI initiatives are driven by the CEO and top leadership, while board members and middle management also push for adoption. According to the study, around half of the companies in the Philippines plan to allocate more than 40% of their IT budget to AI over the next few years — up from the current 10% of organizations making this level of commitment.
Skill gaps also pose a challenge to AI adoption, with a shortage of qualified professionals across various aspects of AI deployment.
“As the race to adopt AI picks up pace, talent will be a key differentiator for companies,” said Anupam Trehan, VP, People and Communities APJC, at Cisco. “There is already a shortage of skilled talent across various aspects of AI. This means companies will need to invest in their existing talent pool to meet the growing demand. At the same time, it is crucial that all stakeholders — the private and public sectors, educational institutions, and governments – work together to develop local talent so that the entire ecosystem can benefit from the immense potential that AI offers.”
“As companies accelerate their AI journeys, it’s critical they adopt a comprehensive approach to implementation and connect the dots to link AI ambition with readiness,” Soriano-Nicart said.