Digital transformation is crucial for the Philippines to achieve resilient and inclusive economic growth. The World Bank has expressed its commitment to supporting the Philippine government's efforts in transforming the country's digital sector through enhanced connectivity, digitalization, a dynamic innovation ecosystem, and private sector partnerships.
"Digitalization is a transformative force that can drive productivity-led growth and enhance the efficiency of critical services such as transport, healthcare, education, energy, and agriculture in the Philippines," stated Zafer Mustafaoğlu, World Bank Country Director for the Philippines, Malaysia, and Brunei. "By leveraging digital platforms, the country can bridge gaps in service delivery, make sure that individuals and firms have access to affordable financial services and digital solutions that meet their needs, and build resilience against future crises and shocks."
The World Bank has approved a US$750 million Second Digital Transformation Development Policy Loan to aid the government's initiatives. These include lowering barriers to entry and investment in the broadband sector to promote competition and improve connectivity; supporting government agencies in adapting to a dynamic legal and regulatory environment; expanding financial inclusion by promoting secure digital financial services; enhancing transparency and customer protection; improving payments infrastructure; improving trust in e-commerce; expanding logistics; creating jobs in digital services; and enhancing competitiveness in the digital sector.
“Financial inclusion and digitally enabled services are vital for the growth of micro, small, and medium enterprises, which employ over 60 percent of the total workforce in the country,” added Mustafaoğlu. “Greater access to digital financial services enables such businesses to adopt innovative technologies and automation, thereby boosting their competitiveness and contribution to the economy.”
For an economy like that of the Philippines—characterized by a large population spread across many islands—greater digitalization is essential. Digital connectivity plays a key role in bridging geographic and socio-economic divides. While adoption of digital technology has increased rapidly in recent years within the country, further efforts are needed for full realization of digitization benefits. A significant priority will be addressing connectivity limitations faced by 72 percent of Filipino households who still lack fixed broadband according to 2023 figures.