Home Top News PHL could reap P2.6T annually from AI — Balisacan

PHL could reap P2.6T annually from AI — Balisacan

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Artificial Intelligence words are seen in this illustration taken March 31, 2023. — REUTERS/DADO RUVIC/ILLUSTRATION/FILE PHOTO

THE PHILIPPINE ECONOMY could gain P2.6 trillion annually if domestic businesses adopt artificial intelligence (AI), the National Economic and Development Authority (NEDA) said.

“The technology is estimated to contribute $15.7 trillion to the global economy by 2030, with the Philippines potentially gaining P2.6 trillion annually if businesses adopt AI-powered solutions,” NEDA Secretary Arsenio M. Balisacan said during the launch of the National AI Strategy Roadmap 2.0 and Center for AI Research (CAIR) on Wednesday.

“Sectors such as retail, logistics, manufacturing, and financial services can revolutionize operations and enhance performance through the use of AI,” he added.

The AI roadmap and the CAIR were launched by the Department of Trade and Industry (DTI) and the Asian Development Bank on Wednesday. The center is tasked to “transform the Philippines into a premier destination for AI-driven innovation and investments.”

“This upgraded roadmap incorporates the latest technologies, recalibrates our strategic actions, and addresses emerging concerns such as ethics and governance,” Trade Secretary Alfredo E. Pascual said at the event.

The roadmap, which is targeted to be finalized next month, will focus on strategic imperatives such as building a networked environment, improving data access, transforming education and nurturing future AI talents, upskilling and reskilling the workforce, building an AI ecosystem “conscience,” pushing the boundaries of AI, and accelerating innovation.

In terms of immediate priorities, Mr. Pascual said that the DTI is targeting to increase the country’s gross expenditure on research and development, which is only 0.3% of the gross domestic product (GDP), to meet UNESCO’s recommended target of 1%.

“Another immediate priority is the upskilling and reskilling of our current workforce. Concurrently, increasing the number of AI and data science graduates is crucial and a compelling priority,” he said.

Mr. Balisacan said the roadmap would help ensure a fair transition to the adoption of AI by supporting displaced workers through upskilling, reskilling, and training.

“We should have done that earlier,” he told reporters on the sidelines of the launch. “Just like any disruptive innovation, if you prepare well, it should be a boon. [If] you don’t prepare well, it becomes a bane.”

In 2023, the Philippines ranked 65th out of 193 countries in the Government AI Readiness Index by Oxford Insights.

The NEDA chief said that integrating AI in education will equip Filipinos with the necessary skills to “capitalize on emerging technologies, giving the country a competitive advantage, attracting more investments, and fueling economic growth.”

“By integrating generative AI, the Philippines can take a leading role in creative industries, software development, and other high value-adding services, further boosting our economic potential.”

Mr. Balisacan also said that the proposed Open Access in Data Transmission Act or the Konektadong Pinoy Bill would help the Philippines maximize the benefits of AI. The House of Representatives approved the bill in 2022, while a counterpart bill is still pending before a Senate committee.

“By promoting access to affordable and better-quality internet services, this legislation will allow the country to harness the full benefits of AI,” he added.

Mr. Pascual said the DTI is also spearheading the formulation of a national AI governance framework in partnership with the Analytics Association of the Philippines. It is targeted for completion by the end of 2024.

“The ethical use of AI must be addressed. In public policy, the rapid diffusion of AI innovations calls for governance frameworks balancing AI innovation and responsible adoption,” Mr. Pascual said.

The National AI Governance Framework will establish the approved scope and limitations of what developers and stakeholders can do, he said.

UPPER MIDDLE-INCOME COUNTRYMeanwhile, gross national income (GNI) per capita should grow by at least 6.7% this year to ensure the Philippines becomes an upper middle-income country by next year, Mr. Balisacan said.

“We are now $4,230 [in terms of GNI]. So, you only need 6.7% (GNI) growth,” he told reporters.

According to the World Bank’s latest income classification data, the Philippines remained a lower middle-income country with a GNI per capita of $4,230 in 2023.

To become an upper middle-income country, the Philippines needs to have an estimated GNI per capita of $4,516 to $14,005, according to the World Bank.

Despite this, Mr. Balisacan said that achieving upper middle-income status by late 2025 or early 2026 is still “within reach” as the government is projecting 6-7% economic growth this year.

The World Bank has classified the Philippines as a lower middle-income country since 1987. It earlier said the country would likely cross the upper middle-income threshold by 2026. — Beatriz Marie D. Cruz and Justine Irish D. Tabile

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