ARTIFICIAL INTELLIGENCE (AI) has the potential to significantly boost the Association of Southeast Asian Nations (ASEAN) economies, but preparedness for the transition to the technology remains uneven, with the Philippines among the laggards in the region, Economy Secretary Arsenio M. Balisacan said.
Mr. Balisacan, who heads the Department of Economy, Planning, and Development (DEPDev) said AI is already transforming how people work, produce, and deliver services across industries.
鈥淎I presents both opportunity and challenge. It has the potential to significantly boost ASEAN鈥檚 economy 鈥 enhancing productivity, improving services, and creating new industries,鈥 he said at the 2026 National Innovation Day at the Diamond Hotel on Wednesday.
In particular, he said AI is expected to account for between 10% and 18% of ASEAN gross domestic product (GDP) by 2030.
For the Philippines, he said AI adoption 鈥渋s increasing rapidly. We have indicated how digital commerce has been growing rapidly and how that commerce is fueled by AI.鈥
鈥淪o, we have the framework to seize the opportunities that are offered by AI technologies,鈥 he added.
DEPDev unveiled on Wednesday its draft AI Governance Framework, which aims to address the constraints and challenges to AI adoption.
According to DEPDev, risks in using AI include ethical considerations and cybercrime; cybersecurity and data privacy; labor market disruption; intellectual property rights and antitrust challenges; and environmental sustainability and resource consumption.
Mr. Balisacan said the country should develop while it addresses the constraints to AI, which include energy, as data centers are energy intensive.
鈥淲e need to get those investments in energy as we proceed with wider adoption of AI,鈥 he said.
The other binding constraints to AI adoption are insufficient digital infrastructure, human capital and digital skills gaps, AI ethics and accountability gaps, and data availability and governance issues.
鈥淚 think that our focus on upskilling and reskilling our workforce to get the private sector, the government, and academia working together is intended to ensure that AI is a positive force, a growth force for us,鈥 he said.
Citing the International Monetary Fund, DEPDev said that developing economies such as the Philippines lag in their readiness to harness AI.
Mr. Balisacan said the framework hopes to address the gap in AI readiness. 鈥淚t should allow us to see what we need to address, what we need to develop, and what we need to strengthen鈥 along with the policies that need to be implemented.
鈥淚f we don鈥檛 have good policy and a clear governance framework, we expose our people to unnecessary risk. The opportunities are huge, the benefits are huge, but we need to ensure that the technology does not pose harm to anyone,鈥 he said.
Separately, a report by Alpine Macro concluded that the business process outsourcing industry faces long-term disruption from AI.
鈥淭he Philippines is the world鈥檚 second-largest outsourcing hub after India, with the sector contributing over 8% of GDP and around 65% of service exports. However, it is heavily concentrated in contact centers 鈥 the segment most vulnerable to automation,鈥 it said.
鈥淲hile the industry aims to move up the value chain and shift from 鈥榣abor arbitrage鈥 to 鈥榠ntelligence arbitrage,鈥 the transition is uncertain, as it requires massive investment in capital and human resources, both of which the country lacks,鈥 it added.
It said that even if the Philippines successfully moves up the chain, the sector will inevitably become less labor-intensive, impacting employment.
鈥淭he Philippines鈥 structural constraints are deeply intertwined 鈥 Without substantial reform, the聽economy鈥檚 low-productivity equilibrium will become increasingly difficult to escape,鈥 it added. 鈥 Justine Irish D. Tabile
