THE WORLD BANK on Wednesday said it has approved $750 million in financing that can help the Philippines speed up digital transformation efforts and strengthen its digital economy.
“Digitalization is a transformative force that may drive productivity-led growth and enhance the efficiency of critical services comparable to transport, healthcare, education, energy, and agriculture within the Philippines,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said in an announcement on Wednesday.
The second Digital Transformation Development Policy Loan is aimed toward helping the Philippine government lower barriers to entry and investment within the broadband sector, in addition to promote competition and improve connectivity.
The loan will support government agencies’ efforts to spice up efficiency and transparency through digital technologies, in addition to measures to expand financial inclusion by promoting secure digital financial services and payments infrastructure.
It also goals to spice up trust within the e-commerce sector, in addition to expand logistics and improve the Philippines’ competitiveness within the digital sector.
“By leveraging digital platforms, the country can bridge gaps in service delivery, make sure that that individuals and firms have access to inexpensive financial services and digital solutions that meet their needs, and construct resilience against future crises and shocks,” Mr. Mustafaoğlu said.
In accordance with the loan document, the project goals to boost the variety of households connected to fixed broadband services to 35% in 2026 from 25.6% in 2023.
“A key priority will probably be to remove the connectivity limitations faced by the 72% of Filipino households that, based on 2023 figures, still haven’t any fixed broadband,” the World Bank said.
The project also goals to extend the number of individuals using digitally enabled government services through a unified e-government portal or mobile application to 30 million in December 2026 from a zero base in 2022.
It also hopes to extend the variety of agencies connected to the web-based portal National Asset Registry System (NARS) to not less than five out of twenty-two agencies by December 2026.
The project also seeks to lower the fraud rates involving the usage of digital financial services to eight.24 basis points, and the amount of digital payments over retail payment transactions to 56% in 2026.
“Financial inclusion and digitally enabled services are vital for the expansion of micro, small, and medium enterprises, which employ over 60% of the whole workforce within the country,” Mr. Mustafaoğlu said.
“Greater access to digital financial services enables such businesses to adopt modern technologies and automation, thereby boosting their competitiveness and contribution to the economy.”
By 2026, the project seeks to spice up the variety of e-commerce enterprises to three.5 million and the share of women-owned businesses that make online transactions to five.5%.
The project complements ongoing investments in addressing connectivity gaps in distant areas, including through the Philippines Digital Infrastructure Project, which was approved by the World Bank Board on Oct. 10.
Data from the Philippine Statistics Authority showed the digital economy’s share to the country’s gross domestic product (GDP) went right down to 8.4% last 12 months from 8.6% in 2022, making it the bottom share to GDP since 2018. — Aubrey Rose A. Inosante
