From the factory floors to warehouse shelves and finally to your doorstep, the supply chain forms an intricate network fueling the world’s flow of goods. However, in the Philippines, poor infrastructure, inefficient management practices, and a lack of capital have hampered this process. Yet, the prospects of a fully automated supply chain—where businesses and consumers enjoy faster, cheaper, and more efficient production and delivery times—remain a distant but enticing utopia.
The pillars of automation
Gerald Magadia, president of the Philippine Institute for Supply Management, cites six pillars that must be considered to automate the supply chain: strategy, infrastructure, data, governance, talent, and culture. “If we can fulfill [these] pillars, then the Philippines can transform its automation landscape,” Magadia continues.
Automation offers significant benefits for micro, small, and medium enterprises (MSMEs), helping them reduce costs, boost productivity, and scale their operations to compete with larger enterprises. But the high price of infrastructure and technology are troubling. Making up 99.63 percent of local businesses, MSMEs struggle to incorporate automated systems into their operations, as they mostly rely on older technologies.
Major manufacturing companies also face similar difficulties. Dr. Ira Valenzuela, associate professor of the Department of Manufacturing Engineering, notes that much of the advanced manufacturing equipment in the Philippines dates back to the 1990s, making it challenging and expensive to integrate new technologies with legacy systems.
Beyond these mechanical hurdles, Magadia posits that a conservative business mindset serves as another barrier to automating the supply chain. “Some businesses and individuals may resist adapting to the new technology and digital processes because adapting to the technology means costs,” he explains.
A helping hand
To encourage investment in automation technologies, Valenzuela calls for more substantial financial incentives, such as tax breaks, government loans, and grants for these kinds of projects.
The Department of Trade and Industry has already launched a program that supports MSMEs in incorporating Artificial Intelligence (AI) and automation by improving access to loans and laboratories.
Valenzuela also suggests adopting the “leapfrog” strategy to aid the transition, where traditional development is bypassed by importing and adopting the latest technologies. She highlights Singapore’s success with this method, which allows the country to save on research and development while still reaping the benefits of proven technologies. Leapfrogging has also enhanced the digitalization of government and financial processes in neighboring nations such as India and Cambodia.
Automation in plain sight
While the Philippines is far from achieving fully automated systems, some innovations are gradually taking shape. A notable example is the Well On-the-Go drone delivery project, which was launched in partnership with the Department of Information and Communications Technology, the Department of Health, and Philippine Flying Labs.
As the first of its kind in Southeast Asia, Well On-the-Go uses drones to deliver essential medical supplies to remote areas, addressing critical gaps in healthcare and improving accessibility for underserved populations.
E-commerce platforms like Lazada and Shopee also exemplify the steady integration of automation into everyday Filipino life. Though seemingly minor, they demonstrate how technology is quietly reshaping consumer habits and streamlining operations.
Together, man and machine
Despite the possibilities it brings, the rise in automation inevitably sparks concerns about job displacement, particularly among retail workers. Magadia and Valenzuela underscore the critical role of education and continuous capacity building in the workforce. “Because the technology [keeps] on advancing, so that means we—all of us—should be knowledgeable with existing technologies,” Valenzuela reasons in a mix of Filipino and English.
Another issue is the digital skills gap in the workforce, leaving many workers unprepared for automated technologies. Magadia attributes this “gap” to unequal access to technology.
In response, the Professional Regulation Commission holds initiatives like the Robotics and Automation Class Online Training to equip individuals with relevant skills. As demand grows for expertise in data science, software development, and AI, Magadia encourages viewing automation as a tool to enhance, rather than replace, human capabilities. This reinforces the idea that technology and human labor can—and should—coexist to improve quality of life.
In its 2021 report, consulting firm AlphaBeta claimed that full automation could generate up to P5 trillion annually to the Philippine economy by 2030, with P2.8 trillion of that stemming from AI-enabled technologies. These gains promise not just improved efficiency and productivity but also greater resilience, traceability, and economic competitiveness.
Realizing this vision will require massive infrastructure investments and upskilling of the workforce. As it stands, the dream of a fully automated supply chain remains within reach, but only if innovation is matched with intentional, long-term financial commitment.
This article was published in The LaSallian‘s Vanguard Special 2025. To read more, visit bit.ly/TLSVanguardSpecial2025.
