Digital services exports key to Philippine development, says World Bank

MANILA, PHILIPPINES — The Philippines aims to accelerate economic growth and meet its development goals by expanding exports of digital services, according to the World Bank.
To triple per capita income by 2040, the Philippines must boost productivity and pursue high-paying job opportunities. The World Bank highlights that enhanced digital technologies can expand trade in services.
“White-collar services ranging from professional and business services to finance, engineering, and marketing activities will become more tradable with increased digitalization, while enhanced digital technologies could make service industries the new frontier of offshoring, driven primarily by labor-cost arbitrage,” according to the World Bank.
Despite past gains, the country has lagged regional peers in income growth. A recent study by Tech for Good Institute (TFGI) revealed that the Philippines lags in digital economy growth, compared to its neighboring countries in Southeast Asia.
While weak infrastructure and high trade costs have hindered the Philippines’ development, recent telecommunications sector reforms paved the way for business process outsourcing companies to thrive.
The COVID-19 pandemic accelerated digitalization, expanding telework and e-commerce. With tools like 5G and virtual reality, more high-skill services can be delivered remotely.
“Global uncertainties and challenges lie ahead for the Philippines and other developing economies. Exports of digital services will put them in a strong position to meet those challenges,” the World Bank concluded.