If you’ve received permission to use our logos, follow these guidelines.
Email us through email@example.com
Positioning the Philippines as an Artificial Intelligence (AI) hub in Asia will enable it to match the economic and technological competitiveness of its agile Asian neighbors, said Michael Calma, Country Manager of Advance.AI, a leading big data and AI company in Asia. On the other hand, not adopting it soon enough can cause the country to fall behind.
AI is critical to fueling the growth of industries like banking, financial services, FinTech, payment, retail, and e-commerce while protecting them against cybercriminals. In greater Asia, China, Japan, and Singapore are leading AI investment and research, while 37% of ASEAN is building AI strategies the next five years to improve business decisions, boost productivity, and heighten organizational and operational efficiency.
In a one-on-one interview for Tech Talk with Manila Bulletin Tech Editor Art Samaniego Jr., Calma pointed out that the Filipinos’ intrinsic ability to quickly adopt technology is an asset in this regional race. He said, “We were the texting capital of the world before we became its social media capital. We want to and can become the AI capital. Our countrymen are fast learning how to use an e-wallet account or their smartphone for documentation. That’s why I believe our adoption of AI can grow very, very fast.”
At the same time, he showed the dire consequences of neglect or slowdown: “It will be a very dystopian future if we are not able to adopt AI along with the new technologies that are coming out of the market and which the consumers are looking for. Our neighboring countries and trading partners will not want to trade with us because we wouldn’t have the same efficiency that they already have.”
In the interview, Calma described how AI can make easier and more accessible customer onboarding for loans, especially for small businesses. In contrast to traditional know your customer (KYC) procedures, it speeds up the process of identity verification and can pull up a credit history that’s sourced from alternative credit data points. Alternative data can be derived by analyzing prepaid/postpaid subscriptions for credit reports and through the history of purchases from e-commerce platforms. AI is then used to infer how much credit can be loaned to a borrower.
AI can also use face recognition and government ID verification to prevent fraud in neobanks, e-wallets, and lending institutions. One common example is the tricycle driver using his smartphone to take a selfie to authenticate his record for a loan, instead of going to the nearest bank branch carrying a stack of documents.
Calma also sees opportunities for AI in the Unicorn and Soonicorn environments with start-ups and emerging technology businesses benefiting from huge funding, especially in servicing the large unbanked population of the country. AI-fueled financial services can drive growth not just for larger companies, but “for average citizens from the growing job market to mom-and-pop stores, and even fish ball vendors who plan on taking a loan.”
The Philippine government is supporting AI adoption by encouraging digital payment mechanisms and making laws and services amenable to automation. The Department of Information and Communications Technology (DITC) recently announced its plan to use AI to make public services more efficient while helping them avoid irregularities.
Back in March, former Bangko Sentral ng Pilipinas (BSP) Governor and current Finance Secretary Benjamin Diokno signed Circular No. 1140 which aims to use existing Information Technology risk management systems and AI for online fraud monitoring, detection, and prevention. Calma said AI can be used in this space by detecting “budol patterns” employed by syndicates and organized crime.
Calma also gave indicators of the potential for AI growth in the Philippines: venture capital flowing into the country has been increasing in the past few years and totaled US$1 billion in 2021; about 77 percent of this is funding for FinTech companies.
What can build on this momentum is the response of various societal sectors which Calma found encouraging: “We have the power of the consumer, enterprise players like us, as well as regulators or the government. The partnership between those three sectors should be very strong.”