AS THE PHILIPPINES accelerates its digital transformation, a critical question emerges: Are local government units (LGUs) ready to adopt artificial intelligence (AI)?
According to a recent policy study by the Philippine Institute for Development Studies (PIDS), the answer—for now—is not yet.
In its discussion paper dubbed as “How Ready Are LGUs for AI Adoption?,” PIDS revealed that most LGUs across the country remain low to moderately prepared for AI integration.
Based on the AI Readiness Index, LGUs scored only 30 to 35 out of 100, reflecting serious gaps in digital infrastructure, technical skills, institutional capacity, and funding.
STRUCTURAL DILEMMA
Authored by Francis Mark A. Quimba, Christopher Ed C. Caboverde, and Alliah Mae C. Salazar, the study explains that LGUs face a structural dilemma.
Local officials are often compelled to prioritize immediate public services—such as health, social welfare, and basic infrastructure—that deliver visible political returns, over long-term investments like AI systems that require time, skills, and sustained funding.
Among the most pressing barriers identified are:
- Shortage of ICT and AI-related skills
- Weak last-mile internet connectivity
- Limited budgets for digital initiatives
Income level plays a significant role. First-class LGUs tend to score higher on AI readiness, yet the study notes that strong leadership and clear policy focus allow some lower-income LGUs to outperform wealthier counterparts.
REGIONAL INEQUALITY
PIDS also warned of growing regional disparities in AI readiness. While the National Capital Region (NCR) leads, areas such as BARMM, Eastern Visayas, the Cordillera Administrative Region (CAR), and MIMAROPA lag far behind.
Without targeted interventions, the study cautions, AI adoption could deepen existing inequalities, leaving already marginalized regions further excluded from digital governance gains.
RECOMMENDATIONS
To close the readiness gap, PIDS calls for coordinated national and local action. Key recommendations include:
- Removing regulatory barriers to digital infrastructure by eliminating legislative franchise requirements for connectivity providers, data centers, and cloud services.
- Integrating AI and data literacy into education, starting at the K–12 level by 2026, in line with the Philippine Digital Workforce Competitiveness Act (RA 11927).
- Establishing a unified National AI Strategy, supported by an executive order, with clear institutional leadership and defined agency roles.
- Mandating ICT budget allocations for LGUs—at least 2% by 2026 and 3% by 2028—to ensure sustained funding for digital and AI initiatives.
- Creating a National LGU AI Readiness Fund, prioritizing lower-income municipalities through equity-based grants.
- Promoting inter-LGU collaboration, allowing clusters of provinces and municipalities to share AI infrastructure and services.
The study also emphasizes responsible AI adoption—calling for data governance standards, energy efficiency, inclusion safeguards, and a robust monitoring framework.
GROUNDWORK LAYING
At the national level, groundwork is underway. Initiatives such as the National AI Strategy Roadmap, the proposed Center for AI Research (CAIR), and the Philippine Development Plan 2023–2028 signal strong policy support for AI-driven growth.
However, PIDS noted that policy ambition has yet to translate into general local-level adoption, especially among LGUs and MSMEs still in early stages of digital transformation.
DEFINING MOMENT
As the country observes the 23rd Development Policy Research Month (DPRM) 2025 with the theme “Reimagining Governance in the Age of AI,” the PIDS study offers timely guidance.
AI, the authors stress, can boost productivity, reduce costs, and improve public service delivery—but only if LGUs are empowered, equipped, and included.
The message is clear: AI readiness is no longer optional. For Philippine LGUs, the challenge now is turning policy vision into local action—before the digital divide becomes a permanent one.