According to the Asian Development Bank (ADB), the Philippines can benefit greatly from the massive shift in the global trade that is currently happening. With the most gains likely to be the services sector.
With the pandemic and the lockdowns disrupting the global economy, the ADB said that Asia can benefit substantially from the economies that realign the country's supply chain network, should they adopt stronger trade liberalization and facilitation efforts.
“I do believe that the Philippines has a strong potential given that its post-pandemic trade landscape will give more weight on the digital and services trade,” Cyn-Young Park, ADB Economic Research and Regional Cooperation Department Director for Regional Cooperation and Integration, said
Should the digital transformation play a key role, the Philippines service sector would benefit and gain tremendously in this opportunity of new round globalization, Ms. Park said. She added that Filipino workers can take services-related jobs abroad, while the local Business Process Outsourcing (BPO) sector remains.
Current situations allowed digital transformation to be made a crucial point in boosting a country's economic output. Especially in the fields of trade and commerce, and employment.
If the digital sector expands by 20 percent in the year 2025, the ADB forecasts the Southeast Asia economies record an average annual gain of 8.4 percent in regional outputs. On the other hand, the region's trade and employment would increase by an average of 8 percent and 6.2 percent respectively.
“Digital connectivity in Asia has increased, with rising internet penetration, but large subregional gaps persist. Greater access to online resources through internet connectivity allows consumers, businesses, and governments to gain wider and better access to goods and services beyond geographic borders,” the report said.
In the year 2006-2007, the Philippines was among the lowest in internet penetration, that was selected 20 Asian economies. However, the rate of connectivity significantly improved in 2014-2017, similar to other countries.
“Asia will continue its rise as a major player in the global digital platform market as wider access reaches more users and generates higher revenue growth,” the multilateral lender said.
In addition, countries must be prepared to address the digital divide that will come. And prevent inequality from continuously being worse.
The Philippines needs a lot of work to do as it scored 0.8221 in the Digital Platform Penetration (DPP) index in the Network Readiness Sub indexes. Where it placed 13th out of the 34 Asia-Pacific economies that were tracked. This measured the country's readiness when it comes to technology, people, governance, and impact.
“This suggests that in order to sustainably develop the domestic digital platform economy, governments cannot slacken in upgrading the underlying infrastructure and regulatory foundations,” it added.
Furthermore, the ADB said that countries can achieve economic inclusion should they use a broader set of digital platforms, provided that proper policies are taken in place.
Source: Business World