Washington, United States – The World Bank’s board of executive directors approved a total of US$600m in funding to support the digitalization reforms in the Philippines through its First Digital Transformation Development Policy Loan (DPL).
The funding project aims to promote digital transformation and digital infrastructure policies, extend financial inclusion through digital finance, and stimulate the growth of digital services. It will also aid the government in digitising its operations and service delivery, compete in the digital infrastructure markets, and encourage the adoption of digital payments and financial services.
The World Bank’s funding support is also expected to facilitate reforms that promote e-commerce, enhance competition and value-added activities in digital services markets, and strengthen skills development in the industry.
The Philippines has experienced rapid growth in terms of internet use. However, the country is still lagging behind in terms of fully capitalising on the advantages of digital technology.
Furthermore, the World Bank sees that widespread adoption of digital payments in the country can benefit millions of citizens and small businesses. Only a small percentage of small businesses are able to fully embrace digitalization because of its high cost.
The World Bank seeks to address these concerns through DPL, which will support reforms aimed at enhancing competition and investment in broadband services in the country to reduce costs and improve the quality of services and access.
Furthermore, the funding will promote broader acceptance of digital payments, strengthen trust in digital financial services, and enhance competition in digital financial infrastructure. It will help the authorities expand the reach of digital financial services to underserved and unbanked segments of the population, including women, and facilitate the transition from a predominantly cash-based economy to a digital one.
Ndiamé Diop, country director for Brunei, Malaysia, the Philippines, and Thailand at the World Bank, said, “Greater adoption of digital technology can improve the efficiency and transparency of government services, empowering individuals who were previously far away from decision-making centers. Digitalization can also drive productivity growth by reducing operating costs for firms and enhancing their resilience and preparedness for future crises.”
Speaking on the funding project, Smita Kuriakose, lead economist at the World Bank’s Finance, Competitiveness, and Innovation Global Practice, shared, “Transitioning to a cashless economy would provide various benefits, especially during climate-related and natural disasters, enabling the government and the private sector to respond swiftly and efficiently. With digital transactions, affected individuals can receive government assistance or insurance payouts promptly, facilitating their recovery and rebuilding efforts.”
