PHILIPPINES’ DIGITAL BOOM AT RISK AS AI READINESS FALLS BEHIND
PHILIPPINES’ DIGITAL BOOM AT RISK AS AI READINESS FALLS BEHIND
MANILA – The Philippine digital economy is on track to hit $36 billion in GMV by 2025, growing steadily at 16 percent each year. The numbers look promising... but there’s a silent threat that could slow the momentum.
According to Google Philippines Country Manager Prep Palacios, the country is facing a widening AI readiness gap that could cost billions if not addressed immediately.
HIGH AI INTEREST… LOW AI ECOSYSTEM
In her Market Edge interview, Palacios pointed out a major contradiction:
Filipinos are among the world’s most curious about AI… but the local AI infrastructure and innovation landscape are far behind.
“Filipino internet users rank among the global top 20 when it comes to interest in AI,” Palacios said, calling it a huge competitive advantage. Strong demand paired with affordable labor makes the Philippines a prime market for AI adoption.
But here’s the reality:
• Philippines – Only 10 AI startups
• Singapore – 495
• Malaysia – 60
• Vietnam – 40
“Our ecosystem density is critically low,” Palacios warned. The country also ranks among the lowest in current and planned data center capacity in Southeast Asia.
The result? Investment is flowing out—mostly toward Singapore.
We have a national AI strategy... but not enough AI companies to bring it to life.
E-COMMERCE & DIGITAL LIFESTYLE: THE DRIVING FORCE
Despite the AI gap, the digital economy is still expanding. Video commerce now makes up 25 percent of total GMV. Average purchase value is between $4 to $6, showing the strong demand for affordability among Filipinos.
Ride-hailing and food delivery have also become everyday essentials—used not just for convenience, but to save time, escape traffic, and optimize daily life.
THE WORKFORCE CHALLENGE: AI IS NO LONGER OPTIONAL
Search behavior is rapidly evolving. People are now using images and voice to make complex queries. This means the workforce must transform too.
Palacios emphasized one crucial point:
“AI is a key competitive advantage for everyone in the modern workforce.”
GOOGLE’S RESPONSE: MASSIVE AI UPSKILLING INITIATIVE
Google aims to train 5.5 million people in AI skills across Southeast Asia.
In the Philippines, they are working with:
• Department of Trade and Industry (DTI)
• Department of Information and Communications Technology (DICT)
• IT and Business Process Association of the Philippines (IBPAP)
Through these partnerships, Google is offering Google Career Certificates—including AI Prompting Essentials—for employees and civil servants.
IS IT TOO LATE? NOT YET… BUT TIME IS RUNNING OUT
Palacios remains cautiously hopeful.
“I don’t think we are standing to lose in the next few years,” she said.
But she stressed the urgency of action. The key is building the AI supply chain and accelerating infrastructure, especially data centers. A 150 percent increase in data center capacity is projected—but it needs to move faster.
The message is clear:
Filipinos are ready for AI… but the system must rise to meet the people.
Interest is high—but interest isn’t enough. Infrastructure builds industries.
This is the turning point.
The question now: Will the Philippines lead in AI… or get left behind?
NEWS AI PH — Your Voice in the Age of Intelligence.
The future doesn’t wait. Let’s build it now.
