AI readiness emerges as key challenge for PH firms

Insider Spotlight

• Xenai Digital says AI adoption is now a leadership challenge, not a technology problem
• Philippine firms risk falling behind ASEAN peers if they delay AI integration
• Agentic AI could help businesses redesign workflows and boost worker productivity
• CEOs are urged to focus on augmenting human capability instead of reducing headcount
  
  
  

The Philippines has a rare opportunity to use agentic AI to reverse declining productivity and reposition itself as a higher-value digital economy, according to Pauline Pangan, CEO of digital transformation and Salesforce consulting partner Xenai Digital.

Pangan said the country’s biggest challenge is no longer access to technology but the willingness of leaders to rethink how organizations operate.

“I think we’re seeing the collision of three things at once: outdated operating models, an education system struggling to keep pace with technology, and businesses that still view labor as cheaper than transformation,” she said.

She warned that many Philippine businesses remain trapped in labor-intensive and fragmented workflows while competitors across ASEAN accelerate digital transformation.

Pauline Pangan

CEO of Xenai Digital

Why it matters

Pangan said AI-powered systems are fundamentally changing how productivity is measured.

“One highly enabled employee with AI, clean data, and modern systems can now outperform entire teams trapped in fragmented workflows,” she said.

Businesses are in a race to deploy agentic AI systems capable of independently managing workflows, customer engagement, analytics, and decision-making support.

Pangan said the Philippines remains well-positioned because of its strengths in communication, empathy, and service-oriented work, qualities increasingly valued as repetitive tasks become automated.

“The future economy will not only reward technical capability. It will reward human capability amplified by technology,” she said.

The big picture

Xenai Digital said sectors such as IT-BPM, financial services, retail, and health-care are already seeing measurable productivity gains from AI-powered workflows.

The IT-BPM industry alone generates nearly $38 billion in annual revenue and employs around 1.8 million workers, making it one of the country’s most AI-ready sectors.

Pangan said some companies deploying AI-powered customer service systems have reduced repetitive case handling by nearly 40 percent while improving scalability and responsiveness.

Still, she cautioned that AI adoption without leadership transformation could widen inequality and hollow out middle-skill jobs.

“The leaders I respect most are not asking, ‘How do we reduce headcount?’ They’re asking, ‘How do we elevate human capability?’” she said.

Pangan added that delaying AI adoption could carry long-term economic risks as faster-moving organisations build compounding operational advantages.

“The biggest risk of inaction is waking up one day and realizing the world accelerated while we hesitated,” she said. —Vanessa Hidalgo | Ed: Corrie S. Narisma