“Special focus should be on empowering the micro, small and medium enterprises, which comprise 99.5 percent of registered enterprises, with digital skills that will help scale up their operations…”
I had to go to my bank branch to reset my ATM PIN number for the third time since the pandemic broke out not because of any suspicion that my PIN number has been compromised, lost or stolen, but because I haven’t been using it for a long time, I had forgotten it, again.
This made me realize how digital transactions have become my default mode of payment and how almost all my purchases and payments have become cashless.
According to Statista’s December 2022 report, at the end of the first quarter of this year, 83 percent of the adult population of the Philippines or approximately 60 million people are GCash users.
Another survey from mobile data and analytics firm App Annie revealed that the GCash app was the most downloaded during the first nine months of 2020 when the country went thru the most stringent lockdowns.
These are quite impressive figures and actually quite palpable as every time I find myself out of cash because I forgot to replenish my wallet, I can always pay with the e-payment app on my mobile phone.
On the other hand, results of the 2021 (1st quarter) Financial Inclusion Survey of the Bangko Sentral ng Pilipinas (BSP) showed a big improvement of Filipino adults who now have bank accounts which was recorded at 56 percent from 29 percent in 2019.
This translates to a doubling increase to 42.0 million from 20.9 million of the previous year.
The survey also showed that the pandemic changed the financial behavior of 60 percent of Filipinos with 37 percent saving their money for emergencies and 17 percent using digital payments or online banking.
These surveys clearly show that Filipinos are quickly going digital and will demand 24 by 7 access to fast and reliable internet and telco services to connect and fulfill all their online transactions.
With this new normal already happening, the government must now move quickly to respond to this demand which, if unmet, would certainly stymie our economic recovery. The way all consumers and businesses are now heavily reliant on doing transactions online should be clear impetus for government to prioritize the on-the-fast development of digital assets that will provide, or at least be at par with, global standards.
No less than President Ferdinand “Bongbong” Marcos Jr. has become a champion for digital transformation with several pronouncements, the most recent of which was during the TELCO Summit 2022 where he said, to survive and thrive in a post pandemic economy, the country must digitize quickly and exploit the latest and best technology.
He assured his administration prioritizes digitalization and enjoined the private telcos to work together to build a level of connectivity where the Philippines can compete with its ASEAN neighbors.
The World Bank’s Philippine Economic Update (June 2022 Edition) recommends to “promote investment in connectivity by ensuring an efficient allocation of spectrum and advancing public private partnership models for infrastructure” and that “the Philippine government should leverage public private partnerships (PPP) to attract private investment and manage government assets, including physical assets, right-of-way, aggregated demand to create alternative sources of international bandwidth, the submarine cable landing station, and the domestic backbone network, especially in far-flung areas.”
Harnessing the PPP framework and offering incentives that will attract the right investors to develop digital infrastructure such as closing the backlog of telco common towers for mobile phone signal coverage should be prioritized. Telco infrastructure is listed in the Build Operate Transfer law where private investors can work with government as well as database facilities and information and communications technology networks which are essential if we are to be successful in a systemic and inclusive digital transformation.
We have seen how our quick shift to online transactions was critical in surviving the pandemic crisis.
We now have the opportunity to kick up the gears to sustainably recover our economic momentum.
But first we must solve the systemic gaps in our digital readiness in terms of upgrading and expanding digital infrastructure and equally critical is the parallel upskilling of our workforce with adequate digital skills.
This is where the private sector can help out educational and training institutions to be aligned not just with industry demand for skills sets but to support linkages for nurturing cutting edge digital innovations.
Special focus should be on empowering the micro, small and medium enterprises, which comprise 99.5 percent of registered enterprises, with digital skills that will help scale up their operations and reach potential markets beyond their localities and even globally the way foreign merchants are able to sell their goods directly to Filipino consumers.
The challenge to all sectors of our society is how we can synergize and harness our human, physical, and capital resources to convert our lead as a nation of technology consumers into a powerhouse of digital innovators and e-commerce players in the global digital economy.