AI and the law in the Philippines

By Nilo T Divina and Jay-r C Ipac, DivinaLaw
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The rapid and global rise last year in the popularity of ChatGPT brought more policymakers and other stakeholders worldwide into the debate on how to maximise innovative uses of artificial intelligence (AI) while also managing the different risks associated with it. The Philippines is no exception.

Cognisant of AI’s vast potential to contribute to the national economy, in May 2021 the Department of Trade and Industry launched the country’s AI Roadmap, which contains four major dimensions for AI readiness, namely:

  1. Digitisation and infrastructure;
  2. Research and development;
  3. Workforce development; and
  4. Regulation

Digitisation and infrastructure
Apart from aiming to have reliable, secure and affordable internet access, the country also aims to build a national data centre with a dependable and robust data infrastructure and data management system. One law that has significant impact on this is the amendment to the Public Service Act, which now makes the 40% foreign equity limitation applicable only to public services that are public utilities, and neither telecoms provider nor value-added services provider is one of them. Since the services that data centres may provide do not fall under the public utility classification, data centres may now be fully foreign owned.

Research and development
In 2019, the Philippines enacted two laws to spur technological development including the field of AI.

Nilo T Divina, DivinaLaw
Nilo T Divina
Managing Partner
DivinaLaw
Metro Manila

Republic Act No. 11293 – or the Philippine Innovation Act (PIA) – declared it state policy to foster innovation as a vital component of national development and sustainable economic growth. It also recognised the importance of an effective and efficient innovation ecosystem, and that this requires the government to implement a “whole of government” approach to ensure policy coherence, alignment of priorities, and effective co-ordination in programme delivery. Republic Act No. 11337 – or the Innovative Startup Act – whose objective is to develop an innovative Philippine entrepreneurial culture, contemplates a Philippine Startup Development Programme that includes benefits and incentives for startups and startup enablers.

Workforce development
Recognising the perceived threat of mass automation that AI brings, the Philippines recently enacted Republic Act No. 11927 – the Philippine Digital Workforce Competitiveness Act – to prioritise the adoption of digital transformation in education and institutionalise educational reforms in response to the so-called Fourth Industrial Revolution.

It also enacted Republic Act No. 11899 – the Second Congressional Commission on Education Act II – to enhance the skills and competitiveness of the Philippine workforce in human and digital technology and innovations.

Regulation
Contrary to usual perceptions, there is a law that regulates (although in a very limited sense) the use of AI in the Philippines using the lens of data privacy/data protection.

Having patterned its data privacy legislation from the EU model, the Data Privacy Act’s (DPA) Implementing Rules and Regulations (IRR) provide that “no decision with legal effects concerning a data subject shall be made solely [based on] automated processing” without the data subject’s consent.

Regarding rights in relation to an automated decision system, the DPA grants data subjects the right to access information on automated processes where (such automatically processed) data “will, or is likely, to be made as the sole basis for any decision significantly affecting, or will affect, the data subject”.

Jay-r C Ipac, DivinaLaw
Jay-r C Ipac
Partner
DivinaLaw
Metro Manila

The DPA IRR includes the data subject’s right to be informed of:

  1. “Meaningful information about the logic involved, as well as the significance and the envisaged consequences of such processing for the data subject”;
  2. Existence of automated decision-making and profiling; and
  3. Right of access to “information on automated processes where the data will, or is likely to, be made as the sole basis for any decision that significantly affects, or will affect, the data subject”.

Additionally, data subjects have the right to object to “automated processing where the personal data will, or is likely, to be made as the sole basis for any decision that significantly affects, or will affect, him or her”.

The National Privacy Commission (NPC) also requires the registration of data processing systems that are “likely to pose a risk to the rights and freedoms of data subjects”. Originally, the NPC considered the use of automated decision-making and profiling only among instances where processing is likely to pose a risk to the rights and freedoms of data subjects, and therefore covered by mandatory registration.

Now, automated decision-making and profiling no longer falls under the umbrella term “likely to pose a risk”, but by themselves make it mandatory for a controller to register its data processing systems.

A recent NPC issuance also requires the controller carrying out any automated decision-making operation or profiling to notify the NPC of the same by indicating in the registration record and identifying the data processing system involved in the automated decision-making or profiling operation, regardless of whether such processing “becomes the sole basis of making decisions that would significantly affect the data subject”.

In 2022, the Philippines also passed Republic Act No. 11390 – the Anti-Online Sexual Abuse or Exploitation of Children and Anti-Child Sexual Abuse or Exploitation Material Act. The law considers the use of AI to construct “deepfake” pornographic videos as a form of image-based sexual abuse, the sharing of which is considered a form of online sexual abuse or exploitation of children, which the law penalises.

INTELLECTUAL PROPERTY

Under the Intellectual Property (IP) Code, only a natural person can create copyrightable subject matter. Hence, “AI-generated works are not copyright protected”. For works that are partially AI-generated and partially created by a natural person, “only those parts that are created” by the latter are copyrightable.

Under the patent provisions of the IP Code, computer programs per se are not patentable. To be patentable, however, “a claim directed to a computer program should be drafted in a manner wherein the program instructions are co-operatively working with a programmable device. In short, it cannot be a computer program or software by itself, rather it must exist and work with hardware.” Hence, a claim that otherwise satisfies the elements of patentability, and this requirement using AI may be patentable.

POLICY MAKING

There are several bills filed in congress that seek to: provide some overarching principles in the development, application and use of Al systems; create individual rights against the misuse or failures of AI systems; and create new government agencies to oversee AI’s development in the country.

INTERNATIONAL PARTICIPATION

Consistent with its objective to be a responsible regional AI powerhouse, the country has likewise adhered to several international instruments that seek to rein in rapid advancement in the use of AI technologies.

In 2021, the Philippines joined other countries in adopting the UNESCO recommendation on AI ethics, which provides that member states are to place human rights at the centre of regulatory frameworks and legislation on the development and use of AI.

In 2023, the Philippines, together with the EU and 27 other countries, also joined the Bletchly Declaration, which recognises the importance of human rights protection, transparency and explainability, fairness, accountability, regulation, safety, appropriate human oversight, ethics, bias mitigation, privacy and data protection as AI moves to advance especially with its “capability to manipulate content or generate deceptive content”.

At the same time, the declaration recognises the importance of adopting “a pro-innovation and proportionate governance and regulatory approach that maximises the benefits and takes into account the risks associated with AI”.

This coincides with the efforts of some policymakers to review AI’s potential for misuse in the realm of copyright – for instance, to investigate the proliferation of deepfakes – and to discuss the AI’s looming threat over the country’s business process outsourcing and original equipment manufacturing industries.

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