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Artificial Intelligence: The Technology Adoption and Impact in the Philippines

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DOI: 10.1109/HNICEM51456.2020.9400025

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 Artificial Intelligence: The Technology Adoption
2020 IEEE 12th International Conference on Humanoid, Nanotechnology, Information Technology, Communication and Control, Environment, and Management (HNICEM) | 978-1-6654-1971-0/20/$31.00 ©2020 IEEE | DOI: 10.1109/HNICEM51456.2020.9400025

and Impact in the Philippines

Marife A. Rosales1*, Jo-ann V. Magsumbol1, Maria Gemel B. Palconit1, Alvin B. Culaba2, Elmer P. Dadios3
1
Electronics and Communications Engineering Department
2Mechanical Engineering Department
3
Manufacturing Engineering and Management Department
De La Salle University, Manila, Philippines
1*marife_rosales@dlsu.edu.ph

Abstract— Artificial intelligence (AI) technology adoption Other subfields of AI, deep learning will resolve this
in the Philippines can be seen widely in many sectors such as limitation of machine learning.
industry, agriculture, and services. AI may have a negative Development or changes in a situation that affects one
effect, but AI can generate more employment in all economic or many countries in the world is what we called the global
sectors through proper talent training. To compensate for the
trend. In terms of AI, China and United States are the two
detrimental effects of the implementation of AI, everyone
must have enough understanding of the technology's positive major global hubs of AI development. The global AI market
benefits. In order to respond to the demands of the industries, size is projected to increase from 2019 to 2026. Significant
the public and private sectors must cooperate with increase in the adoption of 5G technology, cloud computing
government and academe to develop the correct skill sets of and IoT are the contributing factors of this market
graduates and workers. growth[5]. Globally, leading industrialists and data analysts
are capitalizing on the latest artificial intelligence trends to
Keywords—artificial intelligence, technology adoption, accelerate business production and growth. Some giant
disruptive technology
industries like Amazon, Facebook, and Google are
allocating their funds in AI/ML research and development.
I. INTRODUCTION
Increased productivity, improve safety, and efficiency are
Building and creating wealth is one of the facilitating some of the good impacts of AI that will significantly
factors in doing research and developing technology. There improve the way of living of mankind.
are many factors that contribute in the creation of wealth
like natural resources, capital, labor, market, public &
environmental policy, and technology. The acquisition or
advancement of technology is based on the needs of the
society. Artificial Intelligence (AI) is one of the most
controversial innovations today. The concept about AI
started in 1950 with the help of numerous scientists,
mathematicians, and philosophers such as Alan Turing,
who first mathematically demonstrated the AI [1][2]. The
attempt to explain the actions of human thought as a
symbolic method was the beginning of modern AI [3]. The
evolution of artificial intelligence is an opportunity for
greater business value in order to generate wealth [4].
Significant scientific advances in research and
technology development using AI over the years can be
noted, see Fig.1. As shown in the figure, there’s a
tremendous increase in the number of AI-related Fig. 1 AI conference conducted and publications from 1950 to 2020
conferences held from year 2000 to present. This is true
with the published journals, magazines, and books. These In China (2017), Beijing spearheaded and presented
data are correlated to the technology adoption of AI different plans to become the world leader in AI by 2030
globally. Most of these advancements had been developed [6]. In Japan, the AI market is projected to grow by 23.51
using machine learning (ML) and artificial intelligence. percent from 2015 until 2030. The AI solutions for the
Machine learning, a sub field of AI, gives the computers wholesale and retail sectors covered 39 percent of the total
the ability to learn by exposing it to huge amount of data. market value, comprising the largest AI sub-segment in
Basically, machine learning used vast data to answer Japan [7]. On the other hand, according to a survey
questions. The gathered data are used in training to develop conducted last 2018, 50 percent of businesses in telecom,
an intelligent model. The trained model will then be used insurance, finance, IT and retail in Singapore have already
in predictions or classifications to solve certain problems. adopted and applied different AI solutions [8].
Some applications of ML are prediction, forecasting, Additionally, with AI, the projected growth in the
optimization, and more. But there are unstructured data manufacturing sector in Singapore will increase by 40
such as images and video which are hard to distinguish the percent in 2035 [9]. Indeed, Singapore is interested in the
features or hard to extract the features to generate dataset. adoption of AI to further improve the existing business
solutions and processes. Fig. 2 shows the global AI market

978-0-7381-1177-3/20/$31.00 ©2020 IEEE

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sizes from 2015 to 2026. Due to artificial intelligence, the daily life, healthcare, and financial services. Presented
economic growth in US will progress from 2.6 percent to under this section are some of the significant applications
4.6 percent in year 2035 [10]. of artificial intelligence.
In transportation, navigation, ride sharing, and
driverless car or autonomous vehicle technology are some
applications of AI. For navigation, Google and Waze can
find the fastest route by processing data traffic using
machine learning, deep learning, and computer vision. For
ride sharing, Uber, Grab, and Lyft can predict real-time
demand using AI techniques. For autonomous vehicle
technology, Dr. Marcelo Ang of National University of
Singapore (NUS), developed a driverless car called SCOT.
The autonomous compact car is environment-friendly and
cheaper [19]. Aside from that, automated number plate
recognition (ANPR) is also one good applications of AI in
transportation sector. Accurate detection and recognition of
Fig. 2 Global artificial intelligence market size from 2015 to 2026 [11]
vehicle registration of license plate is useful for security,
surveillance and law enforcement.
Locally, the Philippines, having enough workforces can
In social media, Facebook and Twitter used AI to
be a major player in the utilization of artificial intelligence
decide what content will be presented in the news feeds to
[11]. Microsoft Philippines reported that 2018 was the
different audiences. Image recognition and sentiment
country's year of artificial intelligence [12] in which the
analysis will help to ensure that content of the appropriate
two significant indicators of a competitive market are
“mood” is being served to the audience. Social media
creativity and productivity. AI is expected to accelerate the
market is projected to grow by 70 percent by 2023 [20].
rate of innovation [13] and improvements by 1.7 percent
In healthcare, there are 10 promising AI applications in
and will double the rate of employee’s productivity by 1.9
various fields. These include robot-assisted surgery, virtual
percent in the year 2021[12].
nursing assistants, administrative workflow, linked
Together with other members of United Nation (UN),
machines, detection of fraud, reduction of dosage errors,
the Philippines is steadfast to achieve the 17 Sustainable
preliminary diagnosis, participation in critical trials,
Development Goals (SDGs) until 2030. In order to achieve
automated diagnosis of images, and cybersecurity [21].
the vision and objectives of AmBisyon Natin 2040 [14],
Artificial intelligence can predict the chance that a person
these SDGs, also called the Global Goals, have a wide
will die within a year using the data gathered by ECG.
range of social, environmental, governance and economic
[22]. The Philippines could bounce back from the 2019
goals. AI-based research initiatives of the Department of
coronavirus disease (Covid-19) with AI technology. AI
Science and Technology (DOST) are anchored to these
will help sort and categorize relevant health data into a
vision and goals to improve and to achieve better
single unified view of millions of patients in the
healthcare, economic growth, clean energy, smart cities,
Philippines with digital e-know-your-customer solutions.
smart farming and to mitigate climate change. AI and deep
In financial services, recent advancement is the
learning will help climate scientists and innovators
Financial Technology or FinTech [23]. FinTech uses AI
evaluate their ideas and strategies for mitigating air
and blockchain to transform internet economy to provide a
pollution. Today, technologies such as AI, data analytics,
more accessible, flexible, affordable and secured financial
IoT, blockchain, cloud technology, biotechnology,
transactions like in PayMaya and GCash [24]. Automated
nanotechnology, neurotech, robotics, and 3D printing can
vision intelligence is used to perform accurate facial
bring both innovations and disruptions [15][16]. Since AI
recognition of people for business processes like in know
is already here in the Philippines, all must be ready for it.
your client (KYC) process typically used in finance and
The academe, private and public entities together with the
personal banking.
government must work hand and hand to mitigate the
In farming, the high demand to enhance the farming
disruptive impact of this technology. The goal of this study
method in urban areas will create more innovations and
is to present some notable applications of AI, the effect of
opportunities in the market of aquaponics [25][26]. In US,
AI on the economy, business development, labor, and
Smart irrigation systems conserve water through the use of
society. In addition, it seeks to address the current
AI technology where every household can save up to 8,800
government laws and policies as well as the AI roadmap in
gallons per year. One good example is the Skydrop, that
the Philippines.
provide weather forecast and collect data to know when to
irrigate the lawn. It monitors also the moisture content
II. APPLICATIONS OF ARTIFICIAL INTELLIGENCE level of the soil. Recent advancements in image
Technological innovation is a successful recognition have enabled researchers to scan more than
implementation of a new technical idea. There are eight 50,000 plant images to help identify crop diseases at sites
stages of technological innovation. These are the research, with a success rate of more than 99 percent using
applied research, technology development, technology smartphones.
implementation, production, marketing, proliferation, and
technology enhancement[17][18]. Different applications of
AI are present in the field of transportation, social media,

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 III. ARTIFICIAL INTELLIGENCE ADOPTION IN THE In the 1st quarter of 2020, the DOST launched a project
PHILIPPINES called SPARTA to create a smarter Philippines through
The technology life cycle or the technology adoption data analytics research and development (R&D), training
lifecycle follows the S curve of technological progress and adoption. The project aims to train and graduate
which is composed of early adopters, early majority, and 30,000 learners in data science, analytics, and related fields
late majority. According to the study conducted by through online learning. Furthermore, AI development and
McKinsey Global Institute (MGI), there are elements for research [31] will improve the quality of services, will
the AI adoption within the companies. These elements provide accurate information as the basis of major
include the sources of data, robust data ecosystem, skilled decisions in some businesses, will improve healthcare,
workforces, workflows in the core business, and open will lengthen the life span of people, will improve the
culture to embrace the test and learning process [27]. agriculture sector of the country through smart farming
Moreover, there are four fundamental factors [28] in the [32] and integrated farming, and will create more wealth
model to be considered by individuals and organizations since many online start-ups powered by AI will be
when deciding to adopt emerging technologies. These are developed and launched.
the functionality, availability, complexity, and cost. B. Barriers and Constrints of Adoption
Functionality and availability are often low during early There are various factors that will affect the
stage of adoption, while cost and complexity are high. organizational readiness especially in the adoption of AI in
Over the years of adoption, complexity and cost will the country. Some of the identified constraints are lack of
decrease while functionality and availability will increase. talents with align skills, budget constraints, lack of
The Asia Pacific AI Readiness Index measures the leadership awareness, cultural resistance, and access to
quality and strength of AI frameworks and ecosystems in
data [28]. Lack of skilled talents to use AI is the most
the Southeast Asian region. Factors such as adoption, common constraints faced by small to medium scale
deployment, and AI technologies support were considered organizations in the country. Knowledge to integrate the AI
in the ranking [29]. For Philippines, the consumer into existing business processes as well as in the creation,
readiness score of the country is 60.8, the business deployment, maintenance, and interpretation of AI/ML are
readiness score is 33.5, and the government readiness score
some of the challenges. Next is the budget constraints.
is 38.4. On a scale of 0-100, our country has an overall Once the organization has lack of skilled talent, huge
readiness score of 44.2 in terms of AI Adoption. The investment is needed to hire and to re-train to have
overall score of the Philippines (44.2) is higher than qualified employees. Another barrier is the lack of
Indonesia (41.1). According to the Business World (2019) direction or leadership awareness. A lack of awareness and
report, one country's AI readiness is closely linked to per limited understanding on the capabilities of AI from the top
capita gross domestic product (GDP) [27]. management can hinder the effective adoption of AI within
A. Facilitating Factor the organization. Moreover, cultural resistance and fear is
Facilitating factors or enablers are defined as any factor considered as another barrier. Included also in the barrier
that promotes, provides, and stimulates public education in of adoption is the data accessibility. A lack of access to
a fertile environment. One of the government's driving quality training dataset will lead to limited utilization of
forces in the implementation of AI in the Philippines is to AI/ML or worst case could lead to wrong applications of
achieve the SDGs [7] and AmBisyon Natin 2040 [30]. One developed models. The abovementioned constraints and
of the enablers in AI adoption is the access to technology. barriers that affect the adoption of AI must be properly
A large proportion of AI frameworks and libraries are discussed and addressed.
developed as open sources like Python, R, MATLAB, and IV. IMPACT OF ARTIFICIAL INTELLIGENCE
others. Next enabler is the data access. Data or big data is
available everywhere. This data must be utilized properly A. Economy, Labor and Industry
to generate useful information out of it. Most organizations
Based on the labor force survey conducted by
have rich but incomplete and disorganized data. With data
Philippines Statistics Office (PSO, 2019), 61.4 percent of
supplementation and algorithmic organization, the growing
the Philippine population are in the labor force. Out of 61.4
availability of IT products will resolve incomplete and
percent, more than half of the employed persons are
inaccessible data. Qualified AI models available online can
working in services sector. The employed persons or labor
also be obtained, which can be used to deploy or integrate
force can be grouped into three broad sectors such as
in the current system based on needs and problems to be
industry, service, and agriculture sector. The term service
solved. Computing capacity is another facilitating aspect.
sector refers to an economic sector that provides a service
Previously, the creation of an intelligent model using AI
such as education, health, finance, government,
had hardware limitations. In order to implement AI based
transportation and more. The services sector is a major
systems, there is a need for strong and high specification
contributor to the Philippines economy, 60 percent GDP
computers (with graphics processing unit or GPU). With
(2017), 56.4 percent GDP (2018), and 58.5 percent GDP
the advent of cloud computing like Google colaboratory
(2019). In US, it was estimated that 47 percent of the jobs
(colab), access to computational power is affordable,
were at the risk due to automation. This prediction may
convenient, and possible. Other identified enabler is the
also hold true in the business process outsourcing (BPO)
access to complete AI solutions. The recent availability of
industry in the Philippines and may consider AI as one of
highly functional cross-enterprise products will allow
the disruptive technologies today.
organizations to adopt AI and realize its benefits.

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 According to McKinsey, the current AI technologies algorithms will minimize stock forecasting errors and
could automate about half of the work activities performed inventory by 50 percent. In micro, small and medium
in some countries in Southeast Asia region, Indonesia-52 enterprises (MSMEs), AI applications are very vital also
percent, Malaysi-51 percent, Philippines-48 percent, and [34]. AI will enhance the marketing, supports salespeople,
Thailand-55 percent. Artificial intelligence (AI) and deep provides better customer engagement, supports competitive
learning techniques are expected to reshape the nature of intelligence, strengthens cybersecurity, and improves
the working environment in many economic sectors customer relation management (CRM) [35]. The
through the automation of many white-collar jobs. White- Philippines manufacturing industry received the biggest
collar workers are suit-and-tie workers who work at a desk foreign direct investment (FDI) in 2018 about 64.1 percent,
and avoid physical labor. Last July 2018, the International this is an indicator that the foreign investors are willing to
Labor Organization released a report saying that 49 percent invest more in the country[36]. The smaller companies are
of employment in the Philippines has high risk of struggling more with AI adoption while larger companies
automation. According to Senator “Bam” A. Aquino IV, with high revenue has higher adoption rate.
chair of the Senate Committee on Science and Technology,
C. Society
local businesses will use chatbots with artificial
intelligence which can perform the tasks of human Artificial intelligence can greatly increase the
employees, thus putting the employment in risk. However, competitiveness of workplaces and can improve the work
according to Jonathan de Luzuriaga, President of the of people. Repetitive or risky duties are taken over by AI.
Philippine Software Industry Association (PSIA), Artificial intelligence can enhance healthcare [37] with
advancement in technology such as AI technology is an improved monitoring and diagnostic capabilities. AI will
opportunity to create more jobs rather than threats to the minimize running expenses and save money by enhancing
labor industry. The fourth industrial revolution (FIRE) with the processes of healthcare facilities and medical
smarter machines having artificial intelligence will create organizations. AI could save medicine and pharmaceuticals
new opportunities and new jobs. Moreover, the Philippines up to 100 billion annually, according to McKinsey. With
will remain a big source of jobs that involve human just the implementation of autonomous transport, society
touchpoints and retain its title as the “call center capital of can gain countless hours of efficiency. AI can solve
the world” despite the introduction of AI. Added to that, problems related to traffic congestion and increase work
according to de Luzuriaga, in Philippines, using AI and efficiency. Like fingerprints, facial recognition technology
automation, the customer‑human touchpoint will not be will become popular in order to improve protection [38].
reduced but aiming to be the center of excellence for Artificial intelligence can be strengthened to uncover
human touchpoint, or be the center of excellence for illegal activity and address crimes.
customer relationship management among the Asian
V. POLICY RECOMMENDATIONS
countries. AI will not kill the Filipino workforces, but
Filipinos will take this opportunity to level up the value According to Oxford Insights and the International
chain to provide more complex services or jobs and give Development Research Centre, artificial intelligence
the low-level jobs to robots. AI will shift the demand for innovations are expected to add $15 trillion to the global
labor from manual, tedious and repetitive tasks to mental economy by 2030 [39]. Since AI is projected to be
tasks requiring digital skillsets [33]. By 2030, those increasingly adopted globally or even locally, government
industries that are circulated by non-repetitive jobs will needs to have good policies in implementing this
experience a decrease in employment of around 40 percent, technology in order to make greater use of its good impact
but digital technology-powered industries will gain 40 in all sectors of the world. The discussion of the
percent in employment. recommendations in terms of labor and jobs, creation of
human capital, education, government policy, research and
B. Manufacturing
development and innovation, and the AI Roadmap in the
Digitization change the face of manufacturing Philippines is presented below.
especially in quality control and predictive maintenance. In
the next five (5) years, AI adoption and the use of big data A. Labor, Employment, Human Resource Development
analytics is expected to increase by 38 percent. Potential and Education
machine downtime can be identified using connected In the fourth quarter of 2018, the Philippine economy
sensors in the assembly lines wherein intelligent robots reported a 6.1 percent rise, led by the services sector with
will collaborate to humas. Tedious or dangerous jobs and 56.2 percent of GDP, followed by manufacturing (34.8
tasks will be handled by robots to provide safety to people, percent) and agriculture, hunting, forestry, and fishing (8.9
and to improve productivity in the factory. Through the percent) [39]. As the service sectors have contributed the
application of artificial intelligence, safe workplace is highest GDP, the government of the Philippines must have
possible. A recent research study conducted by McKinsey programs to improve the country's service/IT industry. In
reported that AI would allow visual inspection and can addition, improving the protection of intellectual property
increase the rate of defect detection by 90 percent rights in the country is also needed.
compared to conventional manual inspection methods. In In preparation for the next digital transition, the
terms of the supply chain, AI allows manufacturing education sector must be able to search the landscape and
processes and production routines to be modified and build programs. There is a need to train, retrain, and build
strategized based on external variables outside the shop algorithms for the workers, particularly millennials, who
floor. According to McKinsey, advanced machine learning can adapt to technology more quickly than other

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generations. The skills gap for more specialized areas of under the Republic Act No. 2067. This stimulates advances
BPO, such as IT services, healthcare, and shared services, in manufacturing, agricultural, biological, energy [42],
needs to be addressed and improved to become relevant to food and nutrition research and engineering research to be
the needs of the company. In order to meet a shared conducted [43]. The Philippines has ample resources to
objective of leveraging the benefits of AI, the public and train them in AI research and development. Small
private sectors must work together. Industries can take enterprise technology upgrading program (SETUP), is one
advantage of younger employees who are willing to adapt of the enabling programs of the DOST, targets the micro,
to emerging technologies. The industry should collaborate small, and medium enterprises (MSMEs) to increase the
with the government and the education sector in designing productivity and product competitiveness. Through
programs that will educate students who will make up the SETUP, the department was able to assist and improve
country's potential workforce. The education sector like numerous MSMEs that contributed to advance the socio-
Commission on Higher Education (CHED) must create economic condition and become financially stable.
curriculum or specific programs related to AI like those in Recently, the Department of Trade and Industry (DTI)
De La Salle University (DLSU) and University of the released a study regarding the Philippines manufacturing
Philippines (UP). As Asian integration progresses, the resurgence program journey or roadmap towards
possibility of rising productivity through AI will offer the industrialization. It is categorized into 3 sectors such as
opportunity to catch up and restore the prospect of gaining manufacturing, agribusiness, and services [44]. The
competitiveness within the country. Harmonized National R&D Agenda (HNRDA) 2017-2022
It is expected that the fourth industrial revolution of the DOST will be the guiding principle to ensure that the
(FIRe) will have an impact on the skills and job output of science and technology are beneficial to people.
environment. For the Philippines to empower the educators Together with the government and private research and
and institutions, more fruitful international partnerships are development institutions, the academe, industry and other
required, such as twinning arrangements (dual concerned agencies, the formulation of the HNRDA is in
courses/programmes, cross-border education), knowledge line with the DOST’s mandate of providing central
sharing initiatives, and research and development projects direction, leadership and coordination of the scientific and
in the field of artificial intelligence. These projects will technological efforts in the country.
raise educators' understanding and will broaden students
and colleagues' global perspectives. While efforts have D. AI Roadmap in the Philippines
been stepped up in the Philippines to revise curricula and As of August 2019, the government of the Philippines
extend access to ICT in schools, more advanced countries is developing an artificial intelligence (AI) roadmap to
have already made significant improvements in the enhance productivity and economic growth and turn the
development and implementation of modern pedagogical nation into a more globally competitive country [45]. The
methods, such as AI-enabled education and innovative Department of Trade and Industry (DTI), the Department
classrooms. The learning experiences of these nations will of Agriculture (DA), the Department of Science and
assist the Philippines in recognizing and replicating Technology (DOST), the Department of Information and
creative activities relevant to the needs of the country [31]. Communication Technology (DICT), the Department of
B. Government Policy and Laws Education (DepEd), the Higher Education Commission
(CHED) and the National Economic and Development
AI has the potential to transform the public services
Authority (NEDA) are among the members of the
offered by governments around the world to enhance
Philippines AI Task Force. Through its Research and
citizens' interactions with the services provided. In the
Innovation for Development, Science, Technology, and
operations and service delivery, governments are already
Research Institutions, state universities, and industry
introducing AI to increase productivity, save time and
members, the government will also receive assistance from
resources, and provide people with higher quality public
the Asian Institute of Management (AIM), USAID. The
services [40]. Many of today's national government
contract signing of the AI Roadmap Study in the
policies concentrate on the use of AI for competitiveness
Philippines was carried out last November 7, 2019 by AIM
and efficiency. In implementing AI technology, the
and DTI. This partnership aims to create a roadmap for AI
government would act as a facilitator. Government needs
in order to place the Philippines in the Asian region as an
to have adequate funds to support AI initiatives such as
AI powerhouse. As of now, Philippines is ranked 3rd in
increasing AI researchers and trained graduates, improving
Southeast Asia region and there is a good technology
national AI research capability, translating AI research into
roadmap for the Philippines via DOST's HNRDA until
applications in the public and private sectors, and
2022. To achieve this roadmap, the government must be
developing technical communities to conduct AI system
adequately supportive through funds.
research and development (R&D) [41]. Investments in
R&D, hard and soft infrastructure, as well as capacity VI. CONCLUSION
development of human resources and institutions are
This paper described the artificial intelligence adoption
complementary factors for inclusive development and for
of technology in the Philippines. Artificial intelligence is
readiness AI adoption.
now one of the most exciting innovations for simpler,
C. Research and Development and Innovation quicker and more efficient production in the agricultural,
The Science Act of 1958 encourages the integration and industrial, and service sectors. AI can have a negative
intensification of scientific and technical research by funds impact, especially on routine, boring employment, but

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through proper talent training, AI can generate more jobs in [28] A. Dasgupta and S. Wendler, “AI Adoption Strategies,” no. 9, pp. 1–
13, 2019.
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