How Ready Are LGUs for AI Adoption?

Artificial intelligence (AI) is expected to make substantial contributions to Philippine growth and productivity in the coming years. Local government units (LGUs) may leverage this new technology to provide enhanced public service delivery to their respective constituencies. The question now is how ready these units are to adopt AI. This study assesses the preparedness of Philippine LGUs for AI adoption, identifies key barriers to implementation, and derives policy-relevant insights to support inclusive and sustainable AI adoption. Using an AI Readiness Index complemented by qualitative interviews with LGU officials, the study finds that, among other things, LGUs exhibit generally low to moderate readiness for AI adoption, with critical bottlenecks including shortages of ICT and AI-related skills, limited last-mile internet connectivity, and minimal budget allocations for digital initiatives. LGUs also face the challenge of balancing the provision of essential public services that yield immediate political dividends with the longer-term process of implementing and adopting AI for local governance. Policy implications highlight the need for coordinated, multi-level interventions that align infrastructure investment, skills development, governance reforms, and resource allocation. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph.