Digital transformation to create P5 trillion in annual economic value for PHL — Google report

DIGITAL TRANSFORMATION is estimated to create up to P5 trillion in annual economic value for the Philippines, a report commissioned by Google Philippines showed.

Fraser Thompson, AlphaBeta founder and managing director, said at a virtual briefing on Tuesday that P3.5 trillion will be driven by technologies that would assist businesses in mitigating the economic impact of the coronavirus disease 2019 (COVID-19) pandemic.

Economists at Singapore-based AlphaBeta prepared the report for Google Philippines.

Key technologies include artificial intelligence, Internet of Things (IoT), mobile internet; cloud computing; big data; financial technology; advanced robotics; and additive manufacturing.

“The sectors projected to be the largest beneficiaries are the consumer, retail and hospitality; education and training; and agriculture and food sectors. By allowing the creation of new business models and productivity savings, these technologies could create significant economic value for the Philippines,” the AlphaBeta report said.

“By generating productivity gains, revenue boosts, cost savings, and GDP increments, digital technologies can unlock up to P5 trillion worth of economic value annually in the Philippines by 2030,” it added.

Mr. Thompson said digital adoption is important for the Philippines to become more resilient, especially after the pandemic.

“Beyond its immediate economic impacts, the COVID-19 pandemic is likely to have long-term implications in three aspects of the Philippine economy, namely: the emergence of a hybrid workplace that supports digital freelancing; accelerating the shift towards digital payments, and severe disruptions to the business operations of small enterprises,” Google Philippines Country Director Bernadette Nacario said.

However, Mr. Thompson said the Philippines is facing obstacles in achieving digital transformation such as low digital adoption, lack of awareness, gaps in access, digital skills gap, and complex regulations.

“Only 26% of micro, small, and medium enterprises (MSMEs) were aware of digitalization programs offered. Meanwhile, 32% of households in the National Capital Region (NCR) had access to the internet, but only 5% (had access) in rural regions such as the Bicol province,” he said.

He said the Philippines should enhance digital skills training and education; accelerate digital adoption and innovation; and promote digital trade opportunities.

“Across these three areas, Google is already making contributions through a range of programs such as reskilling and upskilling current workers digitally, providing capacity-building support for businesses, and developing digital platforms to promote domestic exports,” Mr. Thompson said. — Revin Mikhael D. Ochave