TECH4GOOD
The ongoing digital revolution has profoundly transformed the global labor market. The traditional way of sourcing skills by hiring employees and having them physically report in the workplace is fast evolving into hiring online and having them work from anywhere. This transformation has given rise to online freelancing.
According to a recent global freelance platforms market report released by the Business Research Company, the global market is expected to grow from $6.46 billion in 2023 to $7.49 billion by the end of last year at a compound annual growth rate (CAGR) of 15.9 percent. The report further highlights that the market size is expected to see rapid growth in the next few years. It will grow to $13.92 billion in 2028 at a CAGR of 16.8 percent. The report attributes the fast growth to globalization, remote work trends, skill specialization, entrepreneurial culture, economic uncertainty, and increasing acceptance of remote talent.
The online freelancing sector has emerged as a vital component of the Philippine economy in recent times. According to reports, the country has approximately 1.5 million registered freelancers (this author believes the figure is more than double), contributing significantly to local and national economies. The Philippine Institute for Development Studies (PIDS) reported a staggering 208 percent growth in freelance revenues from 2019 to 2020. This trend has continued into 2023 as digital platforms proliferate and more Filipinos seek flexible work arrangements.
The ongoing shift to digitalization has made it easier for Filipinos to access online work opportunities. Figures from major freelancing platforms show that many Filipino online freelancers are based in the provinces, where job opportunities for skilled workers are hard to come by. Many initially seek additional income from making project-based arrangements to supplement their primary jobs. This is also changing, and many freelancers have opted for full-time employment, including the possibility of engaging with multiple employers.
The ability to earn higher wages from international clients is a significant motivator, particularly given the country’s high English proficiency, skilled workforce, and competitive labor costs. Freelancing also offers flexibility and freedom, appealing to various demographics, including students and parents looking for flexible work arrangements. This author believes online freelancing is a much better option for the country than sending them abroad to work. It is not just about the social impact of being away from their families; they will also spend most of their earnings locally.
Despite the benefits, freelancing in the Philippines comes with unique challenges. Project-based freelancers often face uncertainty because they lack job security and access to essential benefits such as health insurance, retirement plans, and paid leaves. This absence of safety nets can lead to financial insecurity during medical emergencies or other unforeseen circumstances. Delays in receiving client payments are common, with some freelancers experiencing weeks or months without compensation for their work. The lack of comprehensive policies protecting their rights leaves some of them vulnerable to exploitation and abuse by foreign clients.
Despite the significant improvements in the country’s digital infrastructure, countryside freelancers still struggle with unreliable internet connectivity. They are also beginning to feel the increasing competition for jobs, especially since most Filipino freelancers possess only low-level skill sets like virtual assistance, which will become vulnerable because of the advent of artificial intelligence.
The government has ably supported the Philippine freelancing sector for many years now. With the support of DICT, the sector has conducted its annual Philippine Online Freelancing Conference, where freelancers have the opportunity to learn from each other and see emerging global trends in the sector.
To further develop the sector, freelancers should be provided access to training programs to enhance their digital skills and allow them to compete more effectively in the global labor market. Implementing the new law, RA 11927, or the Digital Workforce Competitiveness Act of 2022, should significantly help achieve this goal. Training them to work with AI will help them sustain their relevance in the future.
Most Filipino online freelancers today are part of the underground economy. Encouraging them to register as businesses or professionals can allow them access to social security benefits, health insurance, and other protections. Operating as a registered business provides them with legal personalities, especially when dealing with financial institutions, and enhances client credibility, potentially leading to more job opportunities. Formal registration facilitates tax compliance and contributes to national revenue generation. Raising awareness about tax obligations and assisting with registration processes can encourage more freelancers to formalize their work status.
The online freelancing landscape in the Philippines is thriving and is emerging as a better option than sending Filipino workers abroad as OFWs. Filipino freelancers need a supportive environment to enhance their competitiveness and relevance as they face the coming technology tsunami.
(The author is an executive member of the National Innovation Council, lead convener of the Alliance of Technology Innovators for the Nation (ATIN), vice president of the Analytics and Artificial Intelligence Association of the Philippines, and vice president of the UP System Information Technology Foundation. ([email protected])