AWS Study: One in three Philippines businesses now uses AI. The next challenge is for businesses to move from experimentation to real impact with next-generation AI looms.
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MANILA, October 14, 2026 – Artificial intelligence (AI) adoption in the Philippines continues to accelerate, with 32% of businesses, or over 396,000 businesses, now using AI, up from 21% a year ago.
These findings are from Unlocking the Philippines’ AI Potential 2026, an independent study conducted by research firm Strand Partners and commissioned by Amazon Web Services (AWS). This represents 52% year-on-year growth in adoption, ahead of the 50% growth recorded last year. The research is based on a survey of 1,000 Philippine business leaders and 1,000 nationally representative members of the public.
Businesses are already reporting that AI is creating value. 74% report productivity gains, up from 70% last year, while 68% say AI has increased their revenue, up from 64%. These businesses report average revenue growth of 20%, ahead of the 15% they forecast a year ago. Confidence in AI’s impact in years to come is also high. 83% of adopters expect AI to drive business growth over the next year, while 84% of businesses believe the technology will significantly transform their industry within five years.
Yet, AI adoption remains concentrated in pilots and basic use cases. The next step for the Philippines is to move from adoption to advanced use of AI with scaled deployment across core functions, while preparing for emerging technologies such as agentic AI.
Precious Lim, Country Manager, Philippines, Amazon Web Services, said: “Philippines businesses are optimistic in the potential value AI can drive, and have moved to adopt the technology. AI is still developing, with next generation technologies like AI agents and physical AI promising to change the way we work. The next opportunity will require collaboration between the public and private sector to help businesses move from simply adopting AI, to driving impact.”
AI adoption is broadening; transformation must be spread out among all organizations
The nature of AI adoption in the Philippines is becoming more sophisticated. 70% of AI adopters remain focused on basic uses such as publicly available chatbots, routine productivity applications and ready-made AI solutions, down from 78% in 2025. A further 18% have reached the intermediate stage, integrating AI across multiple functions to improve efficiency and customer experiences. 12% have reached the most advanced stage, using combinations of models, custom AI systems, agentic AI or autonomous technologies, up from 8% last year.
Ambition remains high: 79% expect their use of AI to increase over the next 12 months, and 47% believe significant untapped AI potential remains within their organization. With 49% of business using cloud technologies, they have a suitable environment to scale successful AI applications up.
Despite this progress, many organizations have not yet established a clear path from experimentation to transformation. 57% describe themselves as exploring or experimenting with AI, while only 17% have a formal roadmap for scaling it across multiple business functions.
Businesses also lack clear ways to evaluate the impact that AI has driven. While 31% of adopters say AI performance metrics determine whether projects are scaled or discontinued, 42% say metrics inform decisions but are not consistently applied, and 20% report that metrics rarely or never influence decisions.
Preparing for next generation AI
The next wave of AI technologies, including agentic AI, physical AI, and advanced robotics will provide adopters with a significant boost to business productivity and product innovation, but Philippine businesses are still building awareness of the technology and its capabilities.
39% of businesses say they have heard of agentic AI. Among businesses familiar with the technology, 6% have fully deployed it, 20% are experimenting with or piloting it, and 50% are planning to use it or are considering adoption. Those that have adopted agentic AI are realizing benefits across their business: 46% report faster decision-making and execution, 57% report increased operational efficiency or productivity, and 38% report improved scalability of operations.
Despite its potential, readiness for next generation AI has not yet caught up with ambition. Only 19% of businesses say they feel fully or very ready to adopt next-generation AI technologies such as agentic AI, with higher readiness in specific industries, like 42% of startups, 36% of financial services businesses and 40% of information and communication businesses.
Businesses cite the following reasons for not feeling ready: 47% cite a shortage of AI and digital skills; 39% cite technical or data-related barriers; 36% cite insufficient internal financial resources; and 33% cite insufficient internal workforce capacity.
Building the Philippines’ foundations for AI
Skills and human judgement are critical to gain more value from AI, with broad AI literacy across business functions. Businesses estimate that only 31% of their workforce feels confident using advanced AI tools, while only 24% feel confident determining whether sensitive data can be processed by AI in a compliant way.
Public familiarity with AI is a bright spot, with 85% of citizens very or somewhat familiar with AI, and nearly four in 10, or 38%, now use AI-powered tools daily. This foundation needs to meet demand for workplace skills. Top skills identified by businesses include interpreting, validating and challenging AI-generated outputs (43%); supervising or orchestrating AI systems (36%); and using AI responsibly and compliantly (35%).
Governance is a differentiator. 61% of businesses agree that strong AI governance is a source of competitive advantage. Organizations with a formal responsible AI framework are five times more likely to report that AI is fully integrated into their operations than those without one (15% against 3%), while businesses with a formal data governance framework are more likely to describe themselves as fully or very ready to adopt next-generation AI (34% against 15%).
Businesses will also need to measure impact accurately. Less than half, or 46% of businesses say they are confident in accurately measuring return on investment from AI projects. 31% of organizations say AI performance metrics directly determine whether projects are scaled or discontinued, 42% say metrics inform decisions but are not consistently applied, and 20% report that metrics rarely or never influence decisions.
The public sector is a catalyst for adoption. 71% of businesses agree that government leadership is crucial to accelerating AI adoption in the Philippines, and 66% agree it is crucial to accelerating adoption in their own sector. 74% agree that stronger collaboration between government and technology providers would enable greater AI adoption.
Only 45% of businesses agree that government is currently demonstrating strong leadership on AI, suggesting the gap is less about the absence of national ambition than about how visible and tangible that ambition feels to individual businesses.
Five steps to unlock the Philippines’ AI future
The Philippines has strong momentum adopting AI, and businesses are already reporting meaningful returns. Sustaining that progress will require coordinated action across five areas:
● Treat data and infrastructure as prerequisites for the next wave, not afterthoughts. Businesses should strengthen data quality, integration, cloud infrastructure and governance through grants and incentives, partnerships and clear, risk-based frameworks.
● Build the discipline to prove AI’s value. Organizations should define success criteria before deployment, connect measurement to business outcomes and use performance data to decide which projects to scale, refine or discontinue.
● Build the human capability to work effectively alongside AI. Businesses should expand AI literacy beyond technical teams, invest in judgement and oversight skills, and provide clear guidance on when employees should trust, challenge or override AI outputs.
● Make the public sector the flagship adopter. Government can lead by example through visible AI deployment in public services, enable adoption through incentives and innovation-friendly procurement, and maintain openness to global technology and investment.
● Build clear decision criteria for where AI belongs. Businesses should determine which tasks can be handed over fully, which need a human in the loop, and which should remain human-led, based on the consequences of error and the value of automation.
Methodology
Unlocking the Philippines’ AI Potential 2026 was conducted by Strand Partners and commissioned by AWS. The research followed guidance from the UK Market Research Society and ESOMAR.
In the Philippines, Strand Partners surveyed 1,000 business leaders, representative by business size, sector and region, and 1,000 nationally representative members of the public. (/)
To see the full report, visit here.
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Source: AWS Press Release