WBG – Building a Better Normal under COVID-19: Harnessing Digital Technologies in the Philippines

The World Bank delivered a report on the digital economy that contributed to further the Bank’s engagements with the Government of the Philippines (GoP), informed government initiatives to improve global competitiveness, and guided policy formulation on digital infrastructure and doing business reforms.

Challenge

When COVID-19 was declared a pandemic in February 2020, containment measures made digitalization essential for economic and social resilience. The Philippines, unfortunately, has not been able to leverage digital technologies to their full extent because of poor access to affordable and high-quality internet and long-held analog practices. Consumers experience slower download speeds and pay more than many of their ASEAN peers. These gaps contribute to a digital divide in the country with about 57 percent of households not having internet access in 2018, and thus, unable to reap the benefits of digitalization. This analytical report articulated this digital divide in the context of the COVID-19 crisis, that has contributed to unequal access to services delivered via the internet. For example, the shift to remote learning has left poorer children with limited internet access falling behind their wealthier, more connected counterparts. Moreover, work-from-home arrangement has been difficult for workers with unreliable internet connection.

Approach

A World Bank team embarked on a study to assess the state of the digital economy in the Philippines, identify the key challenges to digital adoption, and provide policy recommendations to improve the enabling environment. The study deep dived into the key areas of the digital economy including on digital infrastructure, digital payments, logistics and taxation, and the business environment. Policy dialogues and dissemination activities ensured that the recommendations reached the relevant government counterparts.

The multifaceted nature of the digital economy required close collaboration with different government stakeholders. Effective client relation led to the establishment of the Philippines Digital Economy Steering Committee in early 2019. The committee consisted of representatives from key government agencies to lead cross-agency coordination and the clearance of the report’s recommendations. Direct engagement with the steering committee raised the likely implementation of the policy recommendations.

Sharing drafts with counterparts ahead of the report’s completion signaled the urgency of the digitalization agenda. Dissemination also included roundtable discussions and bilateral dialogues, which contributed not only to new engagements, but also provided an opportunity to obtain feedback on preliminary findings. The report was jointly launched by the World Bank and the National Economic and Development Authority, bringing together a diverse set of audiences including the public sector, private sector, development partners, academia, and civil society.

Results

The effective partnership between the World Bank and the Philippines Digital Economy Steering Committee, coordinated by the National Economic and Development Authority, delivered notable results:

  • Informed government’s policy actions. Poor digital performance indicators are tied to the inadequacy of the country’s digital infrastructure. To address the gap, the study recommended the promotion of common infrastructure sharing and improving the ease of doing business. In May 2020, the Department of Information and Communications Technology (DICT) issued a circular on the co-location and sharing of passive telecommunication tower infrastructure for macro cell sites. Four months later, the initiative was complemented by the joint memorandum circular on the streamlined guidance for the issuances of permits, licenses, and certificates for the construction of shared passive telecommunications tower infrastructure. These policy developments resulted in the DICT issuance of provisional certificates to 23 independent tower companies in September 2020.
  • Institutionalized initiatives beyond the report delivery. The report informed government plans and programs such as the logistics part of the Department of Trade and Industry’s E-commerce Philippines Roadmap 2022. Likewise, the joint World Bank-Philippine Statistics Authority (PSA) measured the size of the digital economy, and came up with a methodology to capture the digital economy from the system of national accounts. The exercise built capacity for the PSA to conduct the measurement itself.
  • Opened new areas for Bank engagements. Select chapters of the report contributed to new engagements including a just-in-time support on taxation of e-commerce in the Philippines, a review of the status of government digital platforms, and a Digital Philippines Advisory Services Reimbursable Advisory Services (RAS).  The report also provided inputs on the competitiveness pillar of the second operation of the Philippines Promoting Competitiveness and Enhancing Resilience to Natural Disasters Development Policy Operation series.

Bank Group Contribution

The International Bank for Reconstruction and Development (IBRD) financed the analytical study with a resource envelope totaling US$336,883 spread over two years.

Partners

The Philippines Digital Economy Report 2020 was undertaken in collaboration with the Philippines Digital Economy Steering Committee consisting of key government stakeholders including the National Economic and Development Authority, Department of Finance, Department of Budget and Management, Department of Trade and Industry, Department of Information and Communications Technology, Department of Science and Technology, Philippine Competition Commission, Philippine Statistics Authority, and the Bangko Sentral ng Pilipinas.

Moving Forward

Supporting the growth of the digital economy has emerged as a key priority of the government, where the collaboration with the World Bank continues beyond the publication of the report.

  • The chapter on digital infrastructure contributed to dialogues that resulted in a two-year Digital Philippines Advisory Services RAS with the DICT. The RAS program covers digital government implementation options, legal and regulatory framework review, digital workforce analysis, and a digital Philippines monitoring and evaluation framework.
  • Following the joint work on measuring the size of the digital economy, the PSA plans to institutionalize the digital economy measurement initiative to become part of its regular work program.
  • As a follow up to the report, a World Bank team plans to conduct a technology adoption survey of firms to understand the extent, opportunities, and challenges of firm usage of digital technology in the Philippines.
  • There are other concurrent World Bank studies and operations with digital angles and components such as the Philippines Customs Modernization project which looks into the automation of customs’ systems and processes, and the Philippines Beneficiary FIRST Social Protection project which looks into digital tools to transform social protection delivery in the country.
  • The report has been discussed with development partners, garnering support for the initiatives in this space. This can open up further opportunities for collaboration and support to the government in pursuing their digital transformation initiatives.

“This Philippines Digital Economy Report launch comes at an opportune time as the country navigates through the pandemic. […] We really needed to fast-track these reform agenda.  As relevant as this report is given the current environment, what is more anticipated are the subsequent public and private endeavored initiatives that will lay down the fundamentals to allow for an accelerate digital transformation in the country.”  Dr. Rosemarie Edillon, Undersecretary for National Development Policy and Planning, National Economic and Development Authority, during the launch of the Philippines Digital Economy Report.

Photo : Gato Borrero/World Bank

Source : https://www.worldbank.org/en/results/2021/01/14/building-a-better-normal-under-covid-19-harnessing-digital-technologies-in-the-philippines