The Philippines and the intelligence economy

Every major economic transformation changes not only how societies produce goods and services, but also what they value and trade. The Industrial Revolution commoditized mechanical power and rewarded economies that could harness machinery and scale. The knowledge economy elevated information, education, and expertise. The digital economy turned connectivity, data and platforms into powerful economic assets. Now, another transformation is taking shape: the intelligence economy, in which cognition itself is becoming a commodity.

The intelligence economy refers to an economic system in which the capacity to process information, recognize patterns, generate knowledge, solve problems, make predictions, and support decisions becomes a principal source of value and productivity. Through artificial intelligence (AI), machine learning, automation, and increasingly sophisticated computing, capabilities once associated primarily with human cognition can be replicated, scaled, and commercialized.

Intelligence, in this sense, becomes something that can be produced, packaged, bought and sold, much like labor, capital, and information. It builds on related concepts rather than replacing them. The knowledge economy recognizes knowledge as an economic resource; the digital economy provides the infrastructure and connectivity through which information and services are exchanged; and Industry 4.0 integrates intelligent technologies into production. The intelligence economy represents a further evolution: moving beyond digitizing information and automating tasks to making cognition, or the capacity to derive meaning and actionable insights from information, an engine of economic value.

For the Philippines, the question is not simply how quickly it can adopt AI or keep pace with technological advances. It is whether it can harness the intelligence economy as a development strategy that improves productivity, creates higher-value opportunities, strengthens public institutions and raises the quality of life of the people.

Our country has a foundation on which to build. Its digital economy generated an estimated P2.74 trillion in gross value added in 2025, equivalent to 9.8 percent of gross domestic product. We have an established information technology-business process outsourcing industry, a growing digital services sector, and expanding e-commerce and financial technology ecosystems. Business adoption of AI is also increasing, yet most users remain focused on basic applications, while advanced AI adoption is considerably more limited. The Philippines is therefore participating in the transition, but remains largely an adopter and consumer of technologies developed elsewhere, rather than a significant creator of intelligence-based products and solutions.

The government has recognized the opportunity through its National AI Strategy Roadmap, the establishment of the Center for AI Research, and the launch of the National Artificial Intelligence Center for Research and Innovation in February 2026.

An intelligence economy could benefit the Philippines considerably. AI can improve productivity and help small businesses compete, enable industries to move up the value chain, and create opportunities to develop and export higher-value services and intellectual property. Crucially, it could allow the country to move beyond supplying labor and routine services to developing its own knowledge-intensive and intelligence-based industries.

But these gains are not automatic. The International Labour Organization estimates that 12.7 million Philippine jobs are exposed to generative AI, although exposure does not necessarily mean displacement. Without effective policies, the intelligence economy could deepen inequalities, concentrate wealth and technological advantages in a few companies and urban centers, and leave workers without the skills or opportunities to participate.

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This is why the Philippines must approach the intelligence economy as a development strategy, not a technology race. The objective should not be to acquire the most advanced AI systems or match the technological capabilities of wealthier countries, but to use available and developing technologies to address the country’s economic and social priorities.

This requires affordable connectivity, reliable power, computing capacity, relevant local data, and a workforce equipped with digital, technical, and critical-thinking skills. Education and continuing training must prepare Filipinos not merely to use AI but to work alongside it, develop it and apply it creatively. Government must also become a capable and responsible user of these technologies.

The choice is not whether intelligence technologies will reshape the economy; they already are. It is whether the Philippines will remain mainly a market and source of labor for other countries’ technologies, or build the skills, institutions, and enterprises to capture more of their value. The true test is not how much AI it deploys, but how widely its benefits are shared.

Moira G. Gallaga served three Philippine presidents as presidential protocol officer and was posted at the Philippine Consulate General in Los Angeles and the Philippine Embassy in Washington.