COUNTRIES that fail to adopt artificial intelligence (AI) risk falling behind in an increasingly fragmented global economy, an economist said, warning that technology readiness will increasingly determine growth outcomes, investment flows, and market performance.
Speaking at the Mandaue Chamber of Commerce and Industry’s 2026 Cebu Economic Briefing, economist Ronilo Balbieran said global economic forecasts from the World Bank, the International Monetary Fund, and JP Morgan point to a future defined by “resilience, divergence, and multidimensional polarization.”
“The world will be divided between economies that have adopted AI and those that have not,” Balbieran said on Wednesday, Jan. 21, 2026. “Those with access to AI and digital infrastructure will be the winners, while those without will grow more slowly.”
He noted that advanced economies and select emerging markets are embedding AI into production, finance, logistics, and services, allowing them to enhance productivity and competitiveness even amid global uncertainty. In contrast, developing economies that delay AI adoption face widening gaps in output, income growth, and capital market performance.
Market divergence is already visible, he said, as stock markets linked to technology and innovation outperform those driven mainly by consumption. “Some markets are moving faster, some are not. The difference is technology exposure,” he added.
Balbieran said AI is increasingly being used not only for automation but also for strategic decision-making, allowing firms and investors to digest massive economic data from institutions such as the IMF and World Bank into actionable insights.
“AI allows decision-makers to compress thousands of pages of global economic reports into a single summary,” he said. “That changes how investments, policies, and business strategies are made.”
For the Philippines, he said the challenge is not the absence of liquidity but the ability to channel capital toward productivity-enhancing technologies. While the country continues to benefit from strong household consumption, remittances, and services exports, limited AI integration risks leaving growth below its potential.
“The issue is no longer whether AI will matter,” Balbieran said. “The issue is how fast economies and companies adapt. In the next decade, AI adoption will not be optional — it will be decisive.”
Slow AI adoption in PH
According to a recent study by the Philippine Institute for Development Studies (PIDS) released in September 2025, businesses in the Philippines remain slow to adopt AI despite near-universal access to computers and the internet.
The study found that only 14.9 percent of firms in the country use AI tools, with adoption largely concentrated among large companies in urban areas, particularly in the information and communications technology (ICT) and business process outsourcing (BPO) sectors.
Authors of the study point to a growing gap between basic digital penetration and the use of advanced technologies.
Data from the Philippine Statistics Authority show that 90.8 percent of establishments own computers and 81 percent have internet access. However, AI adoption across industries remains limited, particularly among micro, small, and medium enterprises.
Authors cited several structural constraints holding back AI uptake, including weak digital infrastructure, low awareness of emerging technologies, persistent skills gaps, and limited access to financing.
“The overall awareness of AI and other Fourth Industrial Revolution technologies remains notably low among Philippine firms, with only about one in five firms being cognizant of these technologies,” the study said.
Human capital gaps further compound the problem. The Philippines continues to lag in ICT proficiency as well as engineering and technology education, resulting in a workforce that is not fully prepared for AI-intensive industries.
Geographic disparities also persist. While Metro Manila and Calabarzon account for the bulk of AI adoption, rural areas remain significantly behind. Even basic connectivity is uneven, with some firms still not fully online despite owning computers.
Overall AI adoption is estimated at just three percent across industries, with ICT and BPO sectors posting higher usage at six percent to seven percent while agriculture trails at around 1.5 percent.
The study underscored the need for the government to play an enabling role to ensure AI adoption benefits both industry and society.
“AI has the potential to drive significant economic growth by enhancing productivity, reducing operational costs, and enabling the development of new products and services,” the authors said.
They proposed policy interventions across three areas: market facilitation, capability building, and ecosystem coordination. These include coordinated action among government agencies, sustained investments in digital infrastructure and education, and the establishment of clear governance frameworks for AI. / KOC