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The Philippines edged up the rankings, from 65th to 56th, in the latest Government AI Readiness Index 2024, which assesses the readiness of artificial intelligence (AI) in 188 countries.

The index, published by Oxford Insights, is based on 40 indicators spread across 10 dimensions and three core pillars, namely, government, technology sector, as well as data and infrastructure.

Of the three, the Philippines scored highest under the government pillar, at 74.49 out of 100 (up from 65.43), followed by data and infrastructure at 62.45 (up from 56.13).

However, the technology pillar has some catching up to do, scoring only 38.58, up from 34.38. These scores fairly reflect recent initiatives in the legal and policy space involving emerging technologies.

Strategic roadmap

The Department of Trade and Industry (DTI) now seeks to address the barriers to AI adoption, releasing its National AI Strategy Roadmap 2.0, which incorporates emerging themes like AI ethics and governance, among others.

Under this new roadmap, increasing the national budget for national research and development spending is prioritised to meet UNESCO’s R&D spending recommendation of 1% of the country’s gross domestic product.

It also outlines seven strategic imperatives, which include:

1. 1. establishing a robust, connected and networked environment;
   2. improving data access and value extraction;
   3. transforming education and nurturing future AI talent;
   4. fostering an AI ecosystem that prioritises ethical considerations; and
   5. mastering and pushing the boundaries of AI R&D.

This recent initiative adds to earlier policy initiatives in the AI space including: the Department of Science and Technology AI Roadmap for 2022-2028; the DTI’s (first) National AI Strategy Roadmap; and numerous policy statements in the 2023-2028 Philippine Development Plan on the importance of tapping the potential of emerging digital technologies to unlock new markets and deliver new goods and services.

Specific imperatives

In connection with the first and second strategic imperatives, the National Economic and Development Authority is pushing for passage of the Konektadong Pinoy (Connected Filipino) Bill (Senate Bill 2699). This proposed legislation seeks to promote competition in data transmission services in the telecoms sector by adopting an open access policy.

It defines open access as a system of allowing the use of data transmission networks and associated facilities by data transmission industry participants subject to fair, reasonable and non-discriminatory terms in a transparent manner.

Policy makers have observed that internet service continues to be one of the most expensive in the Asean region; and that while internet speed has significantly improved in the past couple of years, it remains below the global average.

As regards the third strategic imperative, Republic Act (RA) No. 11927, the Philippine Digital Workforce Competitiveness Act (2022), was recently enacted to enhance the skills and competitiveness of the workforce in human and digital technology and innovation.

Another is RA No. 11899, the Second Congressional Commission on Education Act II, which aims to prioritise the adoption of digital transformation in education and institutionalise educational reforms through the promotion of digital literacy and the development of necessary core competencies and 21st century skills.

However, the country acknowledges that a skills mismatch remains a pressing concern as education and training systems have yet to align with skills demanded in the labour market.

Thus, early last year, the Tatak Pinoy (Proudly Filipino) Act was enacted, with a Tatak Pinoy Strategy (TPS) structured according to five specific pillars:

1. 1. human resources;
   2. infrastructure;
   3. technology and innovation;
   4. investment; and
   5. sound financial management.

Under the law, Tatak Pinoy investments and projects would be incorporated in the Strategic Investment Priority Plan (SIPP) based on some eligibility criteria, with all duly identified Tatak Pinoy investment activities and projects automatically included in the list of priority activities.

Particularly under the first pillar (human resources), a roadmap promoting academe-industry linkage developing programmes to match industry demands will be created. This in turn resulted in the launch of the Academe-Industry Matching (AIM!) Programme late last year.

As for the fourth pillar, the Board of Investments amended the 2022 SIPP to fortify the education sector and thereby enhance the nation’s workforce capabilities.

The amendment allows foreign higher education institutions to set up branch campuses in partnership with local entities – provided the latter are at least 60% Filipino-owned – and also provides for the establishment of education cities.

Combined, these initiatives are crucial, considering that under the 2022 SIPP, R&D and activities adopting advanced digital production technologies of the fourth industrial revolution, including robotics and AI, are already included in the List of Priority Activities that may be eligible for several tax incentives.

In relation to the fourth strategic imperative, the Department of Information and Communications Technology and the Civil Service Commission have sought public consultation on its draft joint memorandum circular titled Principles and Guidelines for an Ethical and Trustworthy Use of Artificial Intelligence (AI) in the Government.

Confirming the country’s adoption of the OECD’s AI principles, UNESCO’s global standards on AI, and the Asean guide on AI governance, the draft provides that the use of AI systems should be:

1. 1. Justified;
   2. Appropriate in the context, and not exceeding what is necessary; and
   3. Proportionate to achieve legitimate aims in accordance with governing rules and regulation.

On the other hand, as educational institutions continue to explore and leverage potential benefits of AI, the Department of Education encourages educational institutions to use AI tools responsibly, but has yet to come up with AI guidelines for the education sector. Under the fifth mentioned imperative, the DTI has also launched the Centre for AI Research to serve as a hub for AI-driven R&D.

Privacy and AI

Contrary to the usual perception, there is a law that regulates the use of AI in the Philippines – although in a very limited sense – and that is through the lens of data privacy/data protection.

Consistent with this observation, the National Privacy Commission (NPC) issued a December 2024 advisory on the application of the Data Privacy Act (DPA) to AI Systems Processing Personal Data during their development or deployment, including training and testing.

As data used to train LLMs is largely from publicly available internet sources, the advisory reiterates that publicly available personal data does not lose legal protection simply because it has been made public or is publicly accessible.

More importantly, controllers must institute appropriate and effective governance mechanisms to ensure the responsible and ethical processing of personal data in the development or deployment of AI systems. Controllers must also implement mechanisms to allow for meaningful human intervention to be carried out by authorised persons.

The advisory additionally requires controllers to implement mechanisms to allow their data subjects to contest automated decisions when its effect poses significant risk to their rights and freedoms.

Notably, the advisory did not use the word “sole” or “solely”, unlike earlier NPC issuances relating to automated processing/decisions, which could mean that the decision may or may not be a completely automated one.

However, the data subject’s ability to question is premised on an automated decision that “poses a significant risk to the rights and freedoms of a data subject”, which is narrower than the phrase “significantly affects or will affect” in an earlier issuance.

Take note that the issuance is simply an advisory and therefore only serves as a guideline to concerned entities and individuals. Wisely, the NPC avoided the question of how a data subject’s “right to be informed” of the “meaningful information about the logic involved, as well as the significance and the envisaged consequences of such [automated] processing for the data subject” applies in the AI context. This is a grey area involving much deeper issues.

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