THE WORLD BANK Wednesday said it has approved $750 million Ffunding that will help the Philippines accelerate digitalization transformation efforts and strengthen its digital economy.
“Digitalization is a transformative force that can drive productivity-driven growth and e.gfficence of critical services such as transportation, healthcare, education, energy and agriculture in the Philippines,” Zafer Mustafaoğlu, World Bank country director for the Philippines, Malaysia and Brunei, said in a statement on Wednesday.
The second Digital Transformation Development Policy Loan aims to help the Philippine government lower barriers to entry and investment in the broadband sector, promote competition and improve connectivity.
The loan will support government agencies’ efforts to effefficiency and transparency through digital technologies, as well as measures to increase financial inclusion by promoting secure digital financial services and payment infrastructure.
It also aims to boost confidence in the e-commerce sector, expand logistics and improve the Philippines’ competitiveness in the digital sector.
“By leveraging digital platforms, the country can bridge service gaps, ensure that individuals and businesses have access to affordable financial services and digital solutions that meet their needs, and build resilience to future crises and shocks,” said the Mr Mustafaoğlu.
According to the loan document, the project aims to increase the number of households connected to fixed broadband services from 25.6% in 2023 to 35% in 2026.
“A key priority will be to remove the connectivity constraints faced by the 72% of Philippine households that still lack fixed broadband according to 2023 figures,” the World Bank said.
The project also aims to increase the number of people using digitally enabled government services through a unified e-government portal or mobile application from 0 to 30 million by December 2026, compared to 2022.
It also hopes to increase the number of agencies connected to the National Asset Registry System (NARS) web portal to at least five out of 22 agencies by December 2026.
The project also aims to reduce fraud rates when using digital financial services to 8.24 basis points, and reduce the volume of digital payments compared to retail payment transactions to 56% by 2026.
“Financial inclusion and digitally enabled services are crucial for the growth of micro, small and medium enterprises, which employ more than 60% of the country’s total workforce,” said Mr Mustafaoğlu.
“Better access to digital financial services will enable such companies to adopt innovative technologies and automation, increasing their competitiveness and contribution to the economy.”
The project aims to increase the number of e-commerce businesses to 3.5 million and the share of women-owned businesses transacting online to 5.5% by 2026.
The project complements ongoing investments in addressing connectivity gaps in remote areas, including through the Philippine Digital Infrastructure Project, which was approved by the World Bank Executive Board on October 10.
Data from the Philippine Statistics Authority shows that the share of the digital economy in the country’s gross domestic product (GDP) fell from 8.6% in 2022 to 8.4% last year, making it the lowest share in the GDP has been since 2018. Aubrey Rose A. Inosante