As the nation takes a crucial turn toward the new normal after a rude two-year interruption courtesy of the pandemic, the Philippines is getting back to a path of growth, wiser, as many will say, with the full use of digital technology.
The next pages of this issue of HotSpot are devoted to instances of resilience among local business institutions that enabled them to weather the challenges of the pandemic and overcoming hurdles that tested their commitment to putting public welfare above the profit motive.
President Ferdinand “Bongbong” Marcos leveraged on the country’s capability to embrace digital know-how in courting American companies during his recent official visit to the United States.
Digital transformation will encourage economic activities, Marcos assessed.
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finance Secretary Benjamin Diokno considers digitalization as key to fiscal stability.[/caption]
In a statement during the digital ribbon-cutting ceremony to inaugurate the UnionBank Innovation Campus in the City of San Pedro, Laguna, Marcos referred to the Aboitiz Group’s UnionBank as a model for the kind of innovations, forward-thinking operations, and actions needed, “not only in the private sector but also in the public sector.”
Marcos emphasized the government, as a participant in the “new digital world,” would seek collaboration with the private sector to make public transactions easier and more convenient.
“We would be bereft, we would be neglectful of our duties, if we do not recognize the trend that is happening around the world,” the President shared.
The pandemic, despite the problems that it engendered, is considered the catalyst that hastened digital transformation in all aspects of Filipinos’ lives.
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Private Sector Advisory Council convenor and Aboitiz Group CEO Sabin Aboitiz said country is ripe for investment.[/caption]
Marcos said digital adoption complements, for instance, the Bangko Sentral ng Pilipinas’ three-year thrust to attain cashless payments.
The twin objectives of converting at least half of the total retail transaction volume into digital form, and bringing 70 percent of adult Filipinos to the formal financial system by 2023 are priority goals of the Marcos administrations to achieve financial inclusion.
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BANGKO Sentral ng Pilipinas Governor Felipe Medalla focuses on price stability.[/caption]
Inclusion is attainable if the government hones its competencies in the areas of software development, data analytics, artificial intelligence, and blockchain technology.
The Chief Executive sees the use of digital competencies as the only way “that we will be doing business in the years to come and therefore, we cannot allow the Philippines to get left behind.”
“The track record of UnionBank in creating opportunities through innovation and digital solutions in the banking sector is uncontested,” he said.
President Marcos plans to apply the successes in digital development in the private sector to benefit the government, that is “digitalizing the government at the national level, at the local level.”
Marcos, in his first State of the Nation Address on 25 July, stressed the importance of digital transformation in the Philippines to stay attuned with the world as it enters “an age of exponential adoption of technology” and for the nation to achieve success in the Fourth Industrial Revolution.
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Trade and Industry Secretary Alfredo Pascual takes on transformations to spur industrialization.[/caption]
The Philippine economy will go beyond its pre-pandemic growth, Marcos indicated as he confidently talked about progress amid the Covid-19 pandemic.
In a meeting with members of the Asia Society at The Carlyle Hotel in New York City, the President said his administration has laid out measures that will help reinvigorate the economy.
President Marcos said the Philippines remains on track to “graduate to upper middle-income-country status” by 2023 and become a “high-income country” by 2040.
“With steady investments in infrastructure, agriculture, food security, public health, education, and other social services, we seek to become a high-income country, with zero extreme poverty by the year 2040,” he said.
He underlined the use of digital technology to keep the local economy in step with neighbors in the region which have made huge inroads in the field of technology.
The Philippines is the “right” investment destination, the tycoon who leads the Private Sector Advisory Council said.
Speaking before the US business leaders in New York City, PSAC convenor and Aboitiz Group chief executive officer, Sabin Aboitiz, said the Philippines is ripe for investment, noting that the country is back on the “fast track” of recovery.
“Now, more than ever, with the dawn of a new era of digital progress, and an environment that has never been more enabling and conducive for business, the Philippines is ripe and open for investment,” Aboitiz said.
Aboitiz backed President Marcos and expressed confidence that the current administration will live up to its promise to make the Philippines a “transformed” nation.
Endless possibilities for capital
A “promising possibilities of the future” and “massive economic potential” awaits investors considering that the country remains one of Asia’s fastest-growing economies, Aboitiz added.
Strong leadership
“We support his efforts to assure you of the integrity, of the stability, and the solidarity of his administration and the Philippine economic system, which is not without wounds but neither without the determination to heal them,” Aboitiz averred.
Aboitiz believes Marcos can bring together the best minds in business and use them to find the best solutions using technological advancement.
To strengthen private-public partnerships, Aboitiz said the Marcos administration will build the critical infrastructure needed to support all industries and enable businesses to thrive on a globally competitive scale.
He described Marcos as “a strong leader with a compelling vision and a political will.”
“With a unified support of our Congress and the Filipino people, the new Marcos administration is taking a whole-of-government and -nation approach to deliver on its promise to transform our economy.”
“We, in the business community, believe in this vision. And as our long-time allies and partners, we hope you will too,” Aboitiz told American investors during one of the roadshows accompanying the official visit.
Next big thing
Aboitiz also expressed optimism that the Philippines will become the “next big thing in Asia.”
He said the country has a large pool of young, talented, and English-proficient workforce that is well-equipped for a digital economy.
Among the country’s competitive advantages are the numerous economic zones and information technology parks that are equipped with support capabilities, making it easier for foreign companies to do business with convenience.
The Philippines’ business process outsourcing, electronics, manufacturing, creative, maritime resources, and export sectors have similar potential with track records of success.
Finance Secretary and chairman of the Economic Development Cluster Benjamin Diokno also showcased the country’s solid macroeconomic fundamentals and “bright economic future” during the Philippine Economic Briefing in New York City.
“The Marcos administration is determined to explore new frontiers with investors from the US and the rest of the world. This is why we believe that this is the best time to do business in the Philippines,” Diokno pointed out.
Development, he said, is underpinned by the enactment of key structural reforms, the full reopening of the economy, and a first-of-its-kind Medium-Term Fiscal Framework, which contains various measures that will promote fair and efficient tax administration in the country through digitalization, as well as mainstream environmental sustainability initiatives to mitigate the impact of climate change.
Enhancing revenue stream
Digitalization will likewise play a key role in enhancing the efficiency of revenue collection in the country and modernizing its tax system.
He presented significant developments in the country’s fiscal sector, including the recent enactment of economic liberalization measures that will further widen the space for joint ventures and foreign participation in strategic industries, making the Philippines a premier investment destination in the region.
“We have set in place structural reforms to establish a business-friendly environment for both domestic and foreign investors, and we anticipate significant benefits from the implementation of structural reforms.”
Diokno referred to the public-private partnership which he said will unlock more meaningful employment opportunities for Filipinos and reduce poverty incidence in the long run.
The head of the economic team said the current administration remains vigilant and ready to respond to global economic headwinds and pressing issues brought about by the pandemic and the ongoing Russia-Ukraine conflict.
Both near-term and medium-term priorities are comprehensively outlined in the government’s 8-Point Socioeconomic Agenda that pursues technology-driven, greener, and more inclusive growth.
Ample space for projects
Enough fiscal space will allow the economy to sustain investments in infrastructure, mainly as a result of tax reforms implemented by the previous administration.
On monetary policy, Bangko Sentral ng Pilipinas Governor Felipe Medalla emphasized the BSP’s commitment to promoting price stability, financial stability, and a safe and efficient payment system.
Industrial base to be strengthened
Trade and Industry Secretary Alfredo Pascual highlighted the government’s drive to create enabling digital transformations for the private sector to become key partners in promoting the country’s industrialization and economic pursuits.
“Science, technology, and innovation will drive our efforts to build an inclusive and sustainable industrial base supported by efficient and reliable infrastructure facilities,” the trade and industry chief said.
The Department of Public Works and Highways is also working on a high-standard integrated transport network that will provide inter-regional linkages all over Metro Manila to ease traffic congestion, reduce travel time for workers, and improve the overall ease of doing business in the Philippines, Pascual added.
Faster, efficient tax collections
Diokno emphasized that tax professionals should help hasten the shift to a digital economy.
“We must do this now, and I ask for your support to see this through. The country’s shift to the digital economy will happen by investing in technology and innovating business practices,” Diokno indicated.
“I have directed our revenue agencies to fast-track the digitalization of our revenue and customs systems to boost our tax effort, enhance tax administration, and eliminate discretion,” Diokno added.
Digital transformation is considered key to help ensure long-term recovery of the economy, modernize governance, and allow the Philippines to perform as well as, if not better than, its Asean neighbors.
Diokno said the challenge is to further simplify and streamline operational and core business processes using digital tools to expedite the delivery of public services.
Digitalization of transactions by market vendors, shopkeepers, and tricycle drivers is the next step, according to economic managers as they envision the use of advanced technology even in the simplest transactions.
Recently adopted by the BSP was Paleng-QR Ph after listening to the presentation of a team composed students from the University of the Philippines-Los Baños.
The team conceived a mobile application called e-Palengke to enable the selling and buying of goods online.
The concept aims to help Filipinos face the impact of the Covid-19 pandemic while promoting financial digitalization.
“By helping markets go digital, we not only help market vendors protect themselves against Covid-19 but also to cope with the fast-changing financial environment—so they won’t be left behind by malls and techie businesses,” said the team.
The UPLB students spent about three months developing the concept paper for the mobile app. In their third month of research, they encountered QR Ph, and this served as a “eureka” or “I found it!” moment for the group.
The digital transformation is expected to take the quantum leap where nearly all business deals are done electronically during the term of the tech-savvy President Bongbong Marcos.
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