The increased usage of technology in the Philippines has encouraged its 117 million residents to adopt a digital lifestyle, connecting online to socialise, research, make payments, and access other solutions. According to the e-Conomy SEA Report 2023 by Google, Temasek, and Bain & Co, the country is part of the region's tech decade, which has seen nations navigate new heights towards a sustainable digital economy by 2030.
Research from Statista in 2023 showed that the gross value of the Philippines' internet economy would be 2.05 trillion Philippine pesos, which is about USD 35.26 billion. Manila leads in digital participation and is a practical destination for new businesses to join their industry's startup ecosystems.
Filipinos shifted rapidly towards digital solutions in response to the COVID-19 pandemic, which has made movement, transactions, and social interactions challenging. Thus, the country's leaders encouraged and adopted innovations in public and private spheres. The government upgraded from legacy systems and launched online platforms to provide services, and companies began integrating technology into their everyday operations.
Factors affecting the digital transformation of the Philippines
The digital transformation in the Philippines is now an essential part of society as people seek fast, secure, and convenient solutions for their daily lives. Here are some of the factors that have influenced Filipinos' routines:
Constructing internet infrastructure
Online surfing has become commonplace, as everyone can search for information, watch or listen to video and audio content, visit service platforms, and make payments. The Internet is the foundational aspect of a digital economy.
At the start of 2024, internet penetration in the Philippines stood at 73.6%, with 86.98 million users. Between January 2023 and January this year, the number of Filipinos online increased by 1.8 million. Additionally, 31.24 million people did not use the web early in the year, meaning 26.4% remained offline.
Continuing internet infrastructure construction will allow more Filipinos to access web services. The rise of streaming platforms, podcasts, and online gaming gives users more entertainment and employment options.
Mobile penetration
DataReportal revealed statistics showing 117.4 million active mobile connections in early 2024, representing 99.3% of the total population. The spread of internet-capable smartphones enables Filipinos to download apps and use eCommerce, banking, entertainment, fashion, and insurance services.
eCommerce
The eCommerce sector in the Philippines has been boosting its digital economy, with a gross merchandise value (GMV) of USD 15 billion in 2022 and a projected GMV of USD 60 billion by 2030. Marketplaces like Lazada and Shopee offer Filipinos the opportunity to buy items at affordable prices and from different brands. These platforms also make paying online and receiving deliveries at specified collection points convenient.
Fintech adoption
The Growing Digital Economy in the Philippines Report 2021 highlights eight key technologies that can transform the Filipino business landscape: artificial intelligence (AI), the Internet of Things (IoT), and big data. However, the most pivotal innovation in Southeast Asia has been financial technology (fintech).
The fintech revolution is transforming the financial landscape and enabling inclusion through mobile payment solutions, digital wallets, and peer-to-peer (P2P) lending platforms. Filipino fintech companies like Mynt and PayMongo bring convenience and seamless transactions through eWallets and eBanking services.
Telemedicine
Finally, telemedicine has become part of Filipino life since the pandemic. Healthtech services benefit patients by democratising access to doctor consultations and treatment and allowing patients to receive medical care from the comfort of their homes. Fewer people go to the hospital, helping them save money on travel costs and prevent air pollution.
Future digital lifestyle trends and developments in the Philippines
Integrating technology can make a digital transformation possible. The e-Conomy SEA Report 2023 says the region is bridging the digital divide between rural and urban areas, and connectivity has increased threefold since 2015. Nevertheless, other challenges continue to hinder the adoption of tech.
The most significant issues include privacy, data security, cybercriminals, and tech infrastructure gaps. Many Filipinos are worried about the misuse of their personal information, and cybercriminals pose a significant threat, with phishing and online scams becoming more sophisticated. Tech infrastructure gaps, especially in rural areas, also limit the access and use of technology. An expert also highlighted that a one-size-fits-all approach cannot work because the Philippines has several regions and dialects. He recommended working with local governments to address the residents' needs.
Google's report notes that the digital economy may reach USD 35 billion by 2025. It projects a 21% rise in the eCommerce sector and citizens reaching upper-middle income status by that same period.
Filipino leaders should consider balancing short-term economic goals with sustainability. Companies like EcoNest and Bambuhay are making eco-friendly products that can safeguard the environment and reduce pollution, thus contributing to the economy and sustainability efforts. Overall, citizens must embrace technology in the Philippines and deliberately shift toward a digital lifestyle and sustainable solutions to reap this approach's many benefits.
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