07 October 2020, As delivered

Ladies and gentlemen, magadang araw po sa inyong lahat.

I am honored to speak before our partners in the AI Coalition with regard to the government’s efforts to promote AI adoption in the country and more importantly, make the Philippines one of the AI Centers for Excellence in the world.

AI has the potential to bring in significant value to our economy. A 2018 McKinsey report noted that AI techniques and solutions have the potential to create around US$3.5T to US$5.8T in value across 19 industries. Moreover, these new technologies are estimated to create around 20M-50M new jobs globally by 2030. It also has the potential to increase the competitiveness of our industries as 69% of use cases of AI reported significantly boosted performance compared to other improvements.

So where does the Philippines stand with AI? In 2019, Oxford Insights placed us at 50th rank in terms of the country’s readiness to take advantage of the benefits brought about by AI.  In the ASEAN region, we placed 3rd behind Singapore and Malaysia in terms of the government’s readiness for AI. Further, we ranked 6th out of 7 countries in the Asia-Pacific Readiness Index prepared by TRPC Consulting, with Consumer Readiness being our strongest suit.

Already, there is a strong interest among Philippine businesses in Industry 4.0 transformation. DTI’s own 2019 Survey on Technology Utilization Status of Manufacturing Firms in the Philippines revealed that 7 out of 10 micro enterprises, and 6 out of 10 small and medium enterprises are open or familiar with Industry 4.0.

Further, the Philippines has a demographic advantage to excel in AI, relative to other Industry 4.0 technologies. AI technology doesn’t require the procurement of big and sophisticated machines and capitalizes mainly on human expertise in programming and data science. With this in mind, we have a relatively young population and the number of higher educational institutions in the country offering courses in AI and data science are also increasing.

Presently, the COVID-19 pandemic has accelerated the country’s use of Industry 4.0 technologies—particularly AI—as we navigate the “New Normal.” Aside from chatbots taking over as businesses limit human-to-human interaction, AI technologies have been used in contact tracing, health assessment and monitoring, knowledge management, and addressing supply chain issues.

Prior to the pandemic, our industries were already integrating AI in their operations. The Bank of the Philippine Islands (BPI), BDO Unibank Inc., and brokerage firm BDO Nomura Securities Inc. invested in chatbots and AI to augment their customer service and streamline backend processes. Del Monte Philippines, Inc. (DMPI) implemented a world-class plantation management system that uses drones to monitor the condition of a 25,000-hectare pineapple field in Bukidnon.

Meanwhile, several startups in the country are offering AI solutions to consumers and businesses. These startups—which includes SentiAI, AdMov, Transitflix, Ayannah, Aiah, and InnoVantage—are accelerating the integration of AI technologies and tools in day-to-day transactions while making them more accessible to the public.

But even as there is an increase in use of AI and other Industry 4.0 technologies, our industries have yet to harness the benefits of such technologies and overcome key challenges to their adoption. The Department of Trade Industry (DTI)—guided by our Inclusive Innovation Industrial Strategy (i³S)—intends to continue supporting our industries in addressing these barriers, like the lack of financial and technical capacity and our poor infrastructure.

Ultimately, we envision the Philippines as an AI Center for Excellence in the region by leveraging on our rich talent pool, as well as our vibrant innovation and entrepreneurship ecosystem. This will ensure our country’s competitiveness amidst the rapidly changing times and provide opportunities for growth, especially for our workforce. With the help of the Asian Institute of Management (AIM), DTI is formulating an AI Roadmap for Industry covering the agribusiness, manufacturing, and services industries.

In coming up with the Roadmap, we’ve conducted interviews, consultations, and focused-group discussions with stakeholders from government, industry, and the academe across the country. We hope to start implementing the Roadmap by 2021.

But even before this, a number of initiatives and prerequisites are in place or ongoing. We already have a Data Privacy Law that ensures protection of personal information of data subjects. Likewise, via our i³S, we are actively promoting the close collaboration between industry and the academe to improve the synergy between them. This will help in the conduct of market-oriented research and the commercialization of locally-developed technologies, including those using AI.

We are also developing our own Philippine Skills Framework to reskill and upskill our workers to better prepare them for Industry 4.0 technologies.

I remember that in our Cabinet meeting last year, President Rodrigo Roa Duterte has instructed TESDA to increase courses related to the 4th IR. To push for greater AI adoption, we are focusing on our priority industries as sectors where AI could enhance productivity and value-added. Lastly, we continue to explore collaboration with advanced nations that could help us in our own efforts to capitalize on AI.

To prepare our workforce for the future of work with AI, we need to develop the existing capabilities of our workforce so that they can adapt quickly. Appropriately, one of our i³s Pillars is Capacity-building and Human Resource Development, which aims to upskill and reskill our workforce to become more competitive in the age of digital transformation.

To this end, DTI and its attached agencies have forged partnerships with national and international agencies and organizations to explore areas of collaboration. For example, DTI and the Technical Education and Skills Development Authority (TESDA) signed a Memorandum of Understanding (MOU) with SkillsFuture Singapore. This collaboration will help us with human capital development knowledge-sharing, workforce capacity-building, and conducting relevant studies towards crafting a comprehensive human capital development and skills training cooperation roadmap.

DTI also has an expanded MOU with TESDA and the Department of Labor and Employment (DOLE) to include them in the implementation of the Inclusive Filipinnovation and Entrepreneurship Roadmap (IFER). With the help of these two agencies, we can implement programs and initiatives on HR development and workforce reskilling and upskilling.

On DTI’s part, we’ve been implementing programs that support the adoption of Industry 4.0 technologies, with some initiatives complementing those specific for AI adoption. Aside from the AI Roadmap, we’ve signed an MOU with Siemens towards the formulation of firm-specific digital transformation roadmaps using the Smart Industry Readiness Index (SIRI). Likewise, a partnership with the United Nations Industrial Development Organization (UNIDO) aims to formulate Industry 4.0 roadmaps for the Automotive, Aerospace, Agribusiness, Electronics, and Semiconductor industries.

DTI also plans to establish an Industry 4.0 Pilot Factory, which would serve as a demonstration facility for Industry 4.0 technologies that businesses can adopt. We aim to establish an SME Academy and innovation centers as well that would serve as training facilities for Industry 4.0 technologies. Aside from enhancing the capabilities of our workforce, these centers would be crucial in our upskilling and reskilling efforts to ensure that our workforce can work side-by-side with emerging technologies.

Lastly, DTI has its Securing Manufacturing Revitalization and Transformation (SMART) Program, which a performance-based, time-bound, and targeted fiscal support package. This will incentivize the adoption and production of Industry 4.0 products and technologies in the country.

To close, with AI technologies, we can future-proof our country from the Fourth Industrial Revolution even as we gain more opportunities to create more inclusive economic growth. Through AI, we can create a “Better Normal” in a post-COVID-19 future even as we realize President Rodrigo Roa Duterte’s dream of giving all Filipinos a better quality of life.

Maraming salamat po at mabuhay tayong lahat.

Date of Release: 8 October 2020