Despite low income level, Philippines seen as early adopter in AI boom

The Philippines is cited as an early adopter in the artificial intelligence (AI) space, outpacing its level of technology readiness as a developing country, according to a report by the United Nations Conference on Trade and Development (UNCTAD).

In its 2025 Technology and Innovation Report, UNCTAD estimates that AI will reach approximately $4.8 trillion in market value by 2033.

With AI shaping up to be a pivotal force in the world’s economic future, access to AI infrastructure and expertise remains concentrated in a few economies, particularly in developed nations.

The report noted that 118 countries, mostly from the so-called “global south,” are still absent from major developments related to the technology.

Developing countries—nations with lower levels of industrialization, income, and human development—are seen to have a higher proportion of occupations concentrated in primary and non-knowledge-intensive sectors, which present fewer opportunities for AI.

UNCTAD, however, observed that the Philippines is currently exceeding this trend, even performing significantly better than what its income level would typically suggest.

Under UNCTAD’s Frontier Technologies Readiness Index, which measures a country's ability to adopt and leverage emerging technologies, the Philippines was placed in the “upper middle” score group and ranked 60th out of 170 countries, with a total score of 0.61.

It even secured ninth place in the industry subranking, driven by its strong industry capacities.

The Philippine Statistics Authority (PSA) reported earlier that the country ended 2024 with an annual gross domestic product (GDP) growth rate of 5.6 percent.

The International Monetary Fund (IMF) projected that this will grow to 6.1 percent this year, with a nominal GDP of $507.67 billion, hinging on easing inflation, a more supportive monetary policy, and strong public spending.

Aside from the Philippines, Brazil, China, and India were also mentioned as developing countries outperforming their respective technology readiness.

UNCTAD said, “these contrasts show that many countries have strong potential to seize the opportunities offered by frontier technologies and boost economic growth and overall development.”

It was observed that a common feature for better-performing countries is their active research and development (R&D) and stronger industry capacities.

This enables developing countries to punch above their weight, so to speak, as they can essentially keep pace with technological development.

Ultimately, the Philippines’ growth potential in the AI space depends on the strength of the government’s political will to foster a proper ecosystem for the technology to thrive.

“Developing countries should quickly set and implement AI strategies that align with their national development goals and agendas,” the report read.

“While it may be more immediately feasible to support AI adoption for particular sectoral needs, developing countries should also make long-term strategic plans to steer their own AI development; otherwise, as latecomers, they may be left with few options,” it added.

UNCTAD said countries should consider three leverage points in setting up effective AI policies: infrastructure, data, and skills.

It pointed out that the Philippines is already making progress in this regard, particularly through skills development, by prioritizing population-wide digital literacy to ensure that Filipinos can take advantage of AI in both work and personal life.

The enactment of the Digital Workforce Competitiveness Act was cited as a key factor, as the law pushes for equitable access to and provision of digital skills and competencies that meet global quality standards.

The law, embodied in Republic Act (RA) No. 11927, aims to develop digital skills such as AI, data analytics, engineering, and cloud computing through upskilling, reskilling, and training programs.

The government said previously that this would address gaps in digital technology, ensuring Filipinos are equipped with the necessary skills to meet the changing demands of the labor market.

“AI can be a catalyst for progress, innovation, and shared prosperity—but only if countries actively shape its trajectory. This means shifting the focus from technology to people, putting people at the center of AI development,” the report said.

“Strategic investments, inclusive governance, and international cooperation are key to ensuring that AI benefits all, rather than reinforcing existing divides,” it stressed.