AI deployment for organizations still shallow – Philippine AI Report

Nearly all organizations in the Philippines, about 92%, used artificial intelligence (AI) in some form in 2025, but deployment remains shallow, with the majority still at the pilot stage due to talent scarcity and concerns over security and privacy, according to the Philippine AI Report 2025.

The report was produced by Swarm, a global AI consultancy firm, which surveyed 175 organizations across the technology, financial services, healthcare, and retail sectors. It also covered manufacturing, government, education, and nonprofit organizations, making it the largest published survey of enterprise AI adoption in the country to date, the report said.

Among its key findings is that AI has moved from theory to practice for most organizations in the country. Over 92% of Philippine organizations have used AI in some form over the past year, while 8% said they did not use AI at all.

“The prevailing mindset is now one of active experimentation, with AI increasingly viewed as necessary to remain competitive,” the report said.

Despite organizations experimenting with AI, adoption in the country remains shallow, with a striking 65% of organizations still at the pilot phase, or proof-of-concept stage, testing solutions in controlled environments or small-scale trials.

Only a smaller share have moved to full production deployment, the report said.

“The concentration at proof-of-concept reveals the central tension in Philippine AI adoption: enthusiasm has outpaced execution. Organizations have demonstrated they can launch pilots. The question is whether they can operationalize them,” the report said.

Other AI initiatives by organizations include AI application development for products at 47%, end-user AI enablement through training and onboarding at 41%, internal tooling development at 36%, applied AI development at 30%, fundamental AI research at 28%, vendor evaluation at 27%, and large-scale integration of third-party AI services at 25%.

AI strategy among organizations also showed strong backing from executives, with 61% of respondents saying C-suite executives directly lead AI initiatives.

Despite organizations’ high interest and executives’ strong support for AI, structural challenges hamper the country from scaling beyond pilots.

Talent scarcity tops the list, with 57% of organizations reporting a shortage of AI-skilled personnel, such as data scientists, AI engineers, and technically trained staff.

This skills gap stalls projects and limits the full use of AI tools, as teams struggle with technical roadblocks and business managers sometimes lack understanding of AI capabilities.

Security and privacy concerns follow closely at 40%, as companies remain cautious about feeding sensitive data into AI systems, particularly through third-party cloud services, due to fears of breaches or compliance violations.

Other barriers mentioned were unrealistic expectations (36%), internal development hurdles (34%), concerns about tool quality (28%), IT-business misalignment (26%), employee resistance (24%), and additional challenges such as regulatory hurdles, data gaps, or insufficient executive buy-in (13%).

To address the talent shortage, the study recommended upskilling existing employees.

Organizations are advised to dedicate the majority of AI resources to people and processes, following a 10-20-70 model: 10% for algorithms, 20% for technology, and 70% for workforce development, to accelerate adoption.

Immediate talent gaps can also be addressed through targeted hiring or partnerships with universities, AI consultancies, or technology providers. The study noted that only 12% of Philippine organizations currently have an AI compliance or governance officer.

It also suggested organizations align with national frameworks such as the Philippine Skills Framework for Artificial Intelligence (PSF-AAI), which defines AI-related job roles, required skills and competencies, and career pathways while helping companies access government-supported training and upskilling programs.

Lastly, the report said addressing the AI talent gap requires collective action across industries.

It encouraged organizations to participate in industry working groups developing AI skills standards and to support scholarships, bootcamps, and training programs to expand the talent pool.

Companies that invest in developing the broader AI ecosystem can also build early relationships with emerging talent before competitors.

The Philippine AI Report 2025 aims to understand the current level of AI adoption among local enterprises and what organizations need to do to scale its use.

“We started this research because we wanted to understand what AI adoption actually looks like in the Philippines and have data to back it,” said Tim Santos, project lead of the report.

He added that while global studies track adoption curves and investment trends, they do not capture the country’s nuances, such as how companies make decisions, the availability of talent, and the return-on-investment requirements that shape implementation timelines.

The report seeks to give business leaders the evidence they need to plan the next steps for AI adoption. — Edg Adrian A. Eva