THE Department of Trade and Industry (DTI) is in talks with the Asian Development Bank (ADB) for $400 million in loan assistance to establish a Philippine innovation hub.

Trade Undersecretary Rafaelita Aldaba said the funds would be used to finance the Center for Artificial Intelligence Research (CAIR), among others.

Negotiations are still ongoing and the ADB funding has yet to be finalized, she added.

Trade Secretary Alfredo Pascual, meanwhile, said that one of the department's immediate priorities was to increase the research and development (R&D) budget to meet the benchmark set by the United Nations Educational, Scientific and Cultural Organization (Unesco).

According to Unesco, a developing country should have at least one percent gross domestic product expenditure on R&D (GERD). The Philippines is currently only at 0.30 percent.

"Rapid digitalization post-pandemic has revolutionized job structures, creating entirely new jobs and demanding new skill sets in traditional roles," Pascual said on Wednesday.

Citing a report from the World Economic Forum, the trade chief said that around 56 percent of workers in the Philippines were projected to use generative artificial intelligence (AI) for 5 percent to 20 percent of their regular work activities.

In line with this, he emphasized that the CAIR would be a game-changer once it became operational as it would put the Philippines in a position as a global AI research and innovation leader.

The CAIR will serve to cluster expertise, talent and resources to establish strong global branding and credibility for the Philippines in AI R&D.

The National Artificial Intelligence Strategy Roadmap 2.0, meanwhile, is expected to be finalized within the year, Aldaba said.

"We are still discussing about it because our AI direction is still broad," she told reporters on Wednesday. The updated roadmap will include the sector's targets for AI, its ethical use and contribution to the GDP, and job generation, among others.

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