The government is committing a strategic mistake with a slow-paced approach to harnessing the potential of the Philippine digital economy and ignoring connectivity roadblocks, said advocacy groups championing the acceleration of the country’s digital transformation.
“We need enabling policies that will improve the country’s digital highways through funding support and incentives. Moreover, a strong leadership that can go beyond linear bureaucratic thinking which slows down the disruptive but beneficial impact of digitization,” said Orlando Oxales, convenor of CitizenWatch Philippines.
Oxales cited the joint report by Google, Temasek and Bain & Company – e-Conomy SouthEast Asia Report – Roaring 20s: The SEA Digital Decade – released this month, which said the Philippines’ internet economy is projected to reach $40 billion in 2025.
For this year alone, the Philippines’ gross merchandise value – defined as the volume of goods sold – is expected to reach a total value of $17 billion. This is a 93% surge, year on year, on the back of a 132% growth in e-commerce for the same period, according to the report.
“Our decision-makers should understand and internalize this inevitable shift to the digital economy. We have always been headed in this direction; the pandemic only accelerated it,” added Oxales.
Remove roadblocks to connectivity; Invest in digital infrastructure and human capital
An October 2021 SWS survey commissioned by think tank Stratbase ADR Institute reported that 89% or approximately 9 out of ten Filipinos agree that “The benefits of digital technology such as strong cell phone signals, fast e-banking and social media can greatly help create jobs and businesses.”
The same survey also revealed that 92% of the respondents agree that the “Government should build, upgrade and extensively expand the country’s digital infrastructure to improve speed, reliability and access to the internet nationwide.”
Stratbase ADRi President, Prof. Dindo Manhit stated that “The new government should prioritize the full implementation of the National Broadband Plan as a strategic national asset critical to the nation’s digital transformation and economic recovery.”
The enabling policies, incentives and funding support for digital infrastructure will also have profound consequences on our educational system, Manhit said.
While the Philippines has seen an increase in the number of cell sites built since the easing of permitting processes, operationalizing these towers continues to be challenged.
“Power is an integral part in making use of these cellular sites. Some of these erected structures remain unused due to delays in securing necessary power permits. The national government needs to put pressure on key utilities operators and businesses that continue to impede the industry’s growth,” added Manhit.
Expanding centers of prosperity
The report said that the Philippines saw 12 million new digital consumers since the start of the pandemic up to the first half of this year, with 65% of new consumers from non-metro areas.
Oxales said shifting to e-commerce assured entrepreneurs of survival during this difficult time. “According to the report, 39% of digital merchants in the Philippines believe they would not have made it through the pandemic if not for digital platforms,” he said.
“Imagine the volume of additional business, notwithstanding the lockdown, that could have been generated if it were not for the connectivity problems in many places in the country.”
The same report said that only 68% of internet users are also actual internet consumers. Ironically, the Philippines has the lowest digital consumer penetration among its neighbors in Southeast Asia.
“What are we doing about this untapped segment that comprises one-third of Filipinos who are already online but not yet buying, or selling online?” Oxales asked.
“The potential for Filipino entrepreneurs is not just within his locality but also national and even global. If we are able to tap this, then we would be able to expand our centers of prosperity, not only in NCR or other urban areas, but in the other regions in the country.”
Manhit added that “In building the capacity of the workforce, collaboration between the public and private sectors would be crucial.”
“It is clear that Filipinos know the value of digital technologies and the government must do its part to empower the digital readiness of our entire workforce spectrum. We have to be leaders in the digital world, not laggards,” Manhit said.