PHL digital economy expected to sustain growth momentum

The Philippine digital economy is expected to maintain its growth trajectory, driven by e-commerce and the continued development of digital infrastructure.

The e-Conomy SEA report by Google, Temasek Holdings and Bain & Co. found that the Philippine digital economy is projected to grow 20% to $31 billion in terms of gross merchandise value (GMV), making it the fastest-growing digital economy in Southeast Asia.

The report also reiterated earlier market-size forecasts for the Philippines of $80 billion and $150 billion in GMV growth by 2030.

E-commerce will be the main driver for digital economy growth, with the segment projected to post $21 billion in GMV this year, up 23%.

Transport and food are expected to deliver $3 billion worth of GMV this year; while online media and online travel were valued at $4 billion and $3 billion, respectively.

“The increase in digital payment volumes is compelling service providers to maintain competitive fees while enhancing security and service reliability,” it said.

Digital payments are projected to post 22% growth in 2024 to $125 billion in gross transaction value (GTV). By 2030, digital payments are projected at between $200 billion and $300 billion in GTV.

GTV for digital payments includes the value of credit, debit, prepaid card, account-to-account, and e-wallet transactions, according to the report.

Google, the Singapore state investment company Temasek, and consulting firm Bain added that the surge in digital payments in the Philippines is keeping fees competitive while forcing providers to enhance security and service reliability.

“As the digital payments landscape matures and adoption becomes more widespread, e-wallet providers are increasing merchant discount rates,” according to the report.

The expansion of Philippine digital infrastructure is also expected to contribute to the overall digital economy’s growth, with broadband poised to connect even in remote areas.

Source: Business World

PH digital competitiveness drops

The Philippines' digital competitiveness has fallen for a second straight year based on an annual ranking released on Thursday by Switzerland's Institute for Management Development (IMD).

The country was 61st out of 67 economies in the 2024 list, produced by the IMD's World Competitiveness Center (WCC). This was down from 59th last year when it lost three spots from 56th in 2022.

It was next to last among 14 Asia-Pacific countries, unchanged since 2020, and 25th among 30 economies with populations of more than 20 million, also the same as last year.

Singapore continued to lead the list while the United States experienced a three-place drop to fourth. Switzerland and Denmark took second and third, respectively.

Singapore's top ranking was said to reflect its advanced city management, prolific high-tech patent grants, and robust banking and financial sectors.

Switzerland, meanwhile, improved in terms of high-tech exports and cybersecurity, and Denmark was strong in the areas of employee training, e-governance and secure internet servers.

In contrast, the US saw declines in its attitude to globalization, international managerial experience and increasing fears of failure among entrepreneurs.

The IMD ranking measures digital competitiveness using three main factors — knowledge, technology and future readiness — and the Philippines lost places with regard to the first two.

It was 64th in terms of knowledge, 56th in terms of technology — down from last year's 59th and 63rd, respectively. It edged up, however, to 58th from 59th in the area of future readiness.

Broken down further, the Philippines' rankings also slipped with regard to sub-factors under the three main categories.

It fell to 60th from 56th in terms of talent, 61st from 58th in scientific concentration, and remained 62nd in training and education — all under the knowledge pillar.

Sub-factor rankings under technology all fell: 66th from 63rd for regulatory framework, 45th from 41st for capital and 53rd from 43rd in the area of technological framework.

Improvements, however, came in the future readiness sub-factors of adaptive attitudes (52nd from 59th) and IT integration, 58th from 60th, although a drip to 54th from 50th was seen in the area of business agility.

There were some bright spots for the country: it was second overall in terms of female researchers (under scientific concentration) and high-tech exports (technological framework).

It was 22nd with regard to science graduates (training and education), 9th in telecommunication invest ments (capital), and 19th in flexibility and adaptability (adaptive attitudes).

The biggest weaknesses, meanwhile, were in the areas of artificial intelligence (AI) articles (66th, scientific concentration), secure internet servers and communications technology (64th and 66th, respectively, under technological framework), and starting a business and enforcing contracts (65th and 64th, regulatory framework).

The country's main challenges, according to IMD partner the Rizalino Navarro Policy Center for Competitiveness of the Asian Institute of Management, are:

– sustaining job-generating investments;

– ensuring food security to temper inflation and keep prices affordable;

– addressing learning gaps to improve the education system;

– building sustainable infrastructure to reduce climate change vulnerability; and

– resolving the Philippines' territorial rights to the West Philippine Sea diplomatically and peacefully.

Jose Caballero, senior economist at the WCC, said that geopolitical rivalries — particularly between the US and China — were fragmenting the global digital landscape.

Geopolitical tensions have also become a defining feature in shaping digital competitiveness, the IMD said.

Economies, the business school said, will have to grapple with the pace of technological change and capability requirements.

Countries that effectively exploit the power of new technologies such as AI, blockchain and quantum computing, it added, "are likely to enhance their digital competitive advantage, leading to sustained economic growth, improved productivity and greater global influence.

Source: Manila Times

Big Byte Index: Philippines’ monthly internet cost 37th cheapest in the world

The Philippines ranked 37th out of 168 countries in World Data Lab’s Big Byte Index 2024, after scoring 16.6 out of 100. This means the country’s internet price at $4.8 a month is lower than the United States’ $28.8. The Philippines had the fourth-cheapest internet price compared with its peers in the East and Southeast Asian region.

The Philippines ranked 56th out of 169 countries in terms of the “internet poor” as a share of the population, according to the 2024 Internet Poverty Index by Austria-based data enterprise World Data Lab. This translated to over 18.33 million Filipinos or 15.9% of the total population who cannot afford a 1-GB-per-month internet package, the third highest in the region.

Source: Business World