AI in Action: Transforming Business and Manufacturing in the Philippines

The Philippines’ generative AI (Gen AI) landscape is evolving rapidly, with significant strides being made across various sectors. According to the IBM Institute of Business Value (IBV), 75% of organizations in the country are piloting Gen AI in at least five functions, highlighting the growing acceptance and experimentation with this transformative technology.

The Rise of Gen AI and Its Impact
The impact of Gen AI on return on investment (ROI) has been remarkable. In 2022, the average AI ROI was 13%, but early successes in generative AI pilots boosted this figure to 31% in 2023. IBM IBV’s 2024 CEO Study reveals that 58% of Philippine CEOs believe that competitive advantage will hinge on having the most advanced generative AI. Moreover, 50% of CEOs acknowledge the potential productivity gains from automation, even at the risk of significant challenges, with 82% willing to take more risks than their competitors to maintain their edge.

However, barriers to innovation persist. Philippine CEOs cite a lack of expertise (52%) and financial constraints (50%) as significant obstacles. Despite these hurdles, the ASEAN region sees generative AI as essential, though many leaders focus on efficiency over long-term innovation.

Insights from Philippine CEOs and Tech Leaders
Leadership and collaboration are crucial for organizational success, with 78% of Philippine CEOs agreeing that success is tied to the quality of collaboration between finance and technology functions. However, 54% of organizations lack AI-ready technology infrastructure, and 64% of CIOs identify risks like vendor lock-in as significant challenges. Additionally, 62% of executives are delaying major technology investments due to unclear standards and regulations, and concerns about regulation and compliance have increased for 36% of tech executives.

Aileen Judan-Jiao, President and Country General Manager of IBM Philippines, underscored the importance of upskilling talent across the business sector, “If we don’t level up, we risk getting left behind. AI must be accessible across all roles in the business sector to ensure its successful adoption.”

Highlighting the significant potential of AI in manufacturing, Karthik Chandrasekaran, Principal Client Engagement at IBM Technology, stated that “manufacturing is uniquely positioned to leverage AI for productivity gains” and emphasized that “opportunities for job evolution and upskilling” are key benefits of AI adoption in the sector.

Where Can the Manufacturing Industry Begin Implementing AI?
AI is revolutionizing the manufacturing sector by enhancing operational efficiency and strategic decision-making. By integrating AI into production processes, organizations can optimize workflows and streamline supply chains. AI and automation across business functions, such as Enterprise IT, Engineering, Manufacturing Edge, and Edge-Connected Products, enable manufacturers to deploy intelligent workflows that improve decision-making and create rewarding workforce roles. Additionally, generative AI accelerators can quickly sift through vast repositories of operating manuals, SOPs, and incident logs, providing operators with instant access to critical information. This capability significantly reduces downtime and improves decision-making, even in harsh operating environments.

IBM’s AI at Work in the Philippines
IBM is leveraging its extensive AI expertise in the Philippines to transform operations and drive business innovation. Using its watsonx platform, IBM enhances problem-solving, productivity, privacy protection, sustainability, and regulatory preparation. A notable innovation is AskHR, a digital assistant handling 94% of company-wide HR requests and enhancing efficiency in tasks like promotions and fraud detection.

Quezon City’s IT Department uses IBM Maximo to optimize asset management and municipal operations, promoting sustainable urban development. Meanwhile, Actimai Philippines Inc., a large microfinance provider, uses IBM’s watsonx to improve operational efficiency and customer service through AI-driven chat assistants across various digital channels.