UNESCO recently released the Philippines AI Readiness Assessment Report detailing the opportunities, structural challenges, and strategic recommendations for the country’s AI journey.

The report says that, if AI is adopted effectively, it will position the technology as a major driver for the country's aspiration to become an upper-middle-income economy. If harnessed adequately for innovation and growth in sectors such as the Information Technology and Business Process Management (IT-BPM), retail, manufacturing, and financial services, AI has the potential to boost the Philippines’ gross domestic product (GDP) by approximately ₱2.8 trillion by 2030.

Despite the fears of worker displacement, the report highlights that almost three-fourths of highly exposed jobs in the Philippines are considered complementary to AI, suggesting the technology is likely to increase productivity rather than replace workers. This means AI will not necessarily fire the call center agent; it will give them super-tools to work faster and smarter.

Yes, AI is beginning to change the workplace. In fact, it is also starting to transform life as we know it far more than the internet did decades ago.

The report creates a picture of a future where the Philippines is not just catching up, but actually leading. But — and there is always a but — the report also holds up a mirror to some uncomfortable truths. To unlock that trillion-peso potential, we have some serious housekeeping to do.

Here is where the optimism meets reality. The report candidly notes that the Philippines has yet to get its "house in order." We are trying to run a Formula 1 race with a car that needs an oil change and a track that has potholes.

Infrastructure remains the biggest obstacle. It is an open secret that the Philippine internet is currently expensive and often unreliable, though we have seen significant improvements lately. Outdated laws choke competition, keeping prices high and speeds low compared to neighbors. Everyone’s hope is now anchored on the proper implementation of the new Konektadong Pinoy Act, which is expected to address many of those barriers. On top of that, we have some of the highest electricity costs in the region, which scares away investors looking to build power-hungry data centers.

Then there is the issue of governance. The report underlines siloed policymaking, bureaucratic inertia, lagging investments in national research and development, and the lack of appropriate legal and regulatory frameworks and guidelines. Fragmentation continues to undermine the Philippines’ current scope and pace of digital transformation.

We used to have a “patchwork” of strategies. At the time the report was written late last year, we were the only country with two AI strategies: one developed by the Department of Trade and Industry (DTI) and the other by the Department of Science and Technology (DOST). The President has recently directed DOST to craft the National AI Strategy Framework to replace the previous versions. DTI, DOST, and the Department of Information and Communications Technology (DICT) are all doing good work, but they are often working in silos. Without a single conductor leading the orchestra, the music sounds a bit disjointed.

Perhaps the most heartbreaking challenge pointed out in the report is education. You cannot be an AI hub without a solid foundation, and we are facing a learning crisis: an estimated 91 percent of children at a late primary age struggle to comprehend age-appropriate text. We are also severely underinvesting in the future. The government spends only 0.3 percent of GDP on research and development, a far cry from the UNESCO benchmark of one percent.

To unify our aspirations, the report recommends the creation of a dedicated inter-agency body—backed by an executive order—that requires all agencies involved to sit at the same table and harmonize their AI programs—no more silos. We also need "soft-touch" regulations that protect us from the dangers of dark AI without stifling innovation. The report also proposes a National AI Research Fund to enable the country to develop its own AI innovations rather than relying on products produced elsewhere. We need to incentivize companies to share data and develop local intellectual property.

Finally, we need to define Filipino AI ethics. We should not just copy-paste regulations from the West. We need to fund research into what ethics means in our context—taking into account our history, values, and specific social challenges.

The ₱2.8 trillion opportunity is real, but it is not guaranteed. If properly funded, the Philippines can transform its young workforce into AI-enabled talent and leverage its resilient spirit to make this work. But talent alone cannot overcome slow internet, limited but expensive energy supply, underfunded labs, and confusing policies.

As the report suggests, we have the roadmap. Now, we need the political will to drive the car. If only we could play the AI game right.