Philippine Local Governments Struggle with AI Adoption Amid Critical Gaps
A comprehensive new study by the Philippine Institute of Development Studies has revealed that the majority of local government units across the Philippines remain largely unprepared to adopt artificial intelligence technologies. The research indicates that LGUs exhibit only low to moderate levels of readiness, primarily due to significant deficiencies in technical skills, digital infrastructure, and financial resources.
Critical Barriers to AI Implementation
The discussion paper, which utilized an AI Readiness Index and conducted interviews with LGU officials, identified several persistent obstacles. Shortages of information and communications technology expertise combined with insufficient AI-related skills among local government personnel create fundamental challenges. Additionally, weak last-mile internet connectivity in many regions and limited budgets allocated for digital transformation initiatives continue to hinder progress.
Local governments face the difficult task of balancing immediate political priorities and essential public service delivery with the longer-term strategic process of implementing AI solutions for improved governance. While artificial intelligence holds tremendous potential to significantly boost national economic growth and productivity, the study emphasizes that LGUs require stronger policy support across multiple areas.
Economic Potential and Regional Disparities
The research highlights substantial economic opportunities, with the Philippine AI sector projected to expand from $772.1 million in 2024 to approximately $3.5 billion by 2030. According to Department of Trade and Industry estimates, artificial intelligence could contribute up to 12% of the country's gross domestic product by 2030, provided robust digital infrastructure and appropriate regulatory frameworks are established.
However, the study warns of an emerging new digital divide that threatens equitable development. Internet usage remains heavily concentrated in Luzon, with significantly limited access across much of the Visayas and Mindanao regions. This connectivity gap complicates AI adoption not only for local governments but also for businesses operating in these underserved areas.
Readiness Index Reveals Uneven Progress
The AI Readiness Index assessment demonstrated that LGUs have only partially established the foundational conditions necessary for successful AI adoption across six critical pillars:
- Innovation scored highest among the measured categories
- Governance structures showed significant deficiencies
- Skills development programs lag behind requirements
- Digital infrastructure remains inadequate in many areas
The analysis revealed substantial disparities between different classifications of local governments. First-class LGUs demonstrated the strongest readiness levels, while lower-income municipalities scored weakest due to structural constraints. Interestingly, some less affluent LGUs outperformed wealthier counterparts through effective leadership and strategic policy prioritization.
Regional Performance and Recommendations
Geographically, the National Capital Region ranked highest in AI readiness, followed by the Calabarzon region. Meanwhile, several areas recorded the lowest scores:
- Bangsamoro Autonomous Region in Muslim Mindanao
- Eastern Visayas
- Cordillera Administrative Region
- Mimaropa region
These regional disparities underscore the urgent need for coordinated, multilevel interventions that address both national policy frameworks and local implementation challenges. The study concludes that without targeted support in infrastructure investment, skills development, governance reforms, and resource allocation, many Philippine local governments risk falling further behind in the global digital transformation.
