The COVID-19 pandemic has made it much more difficult for people and goods to move from one place to another, especially since locations around the Philippines are subjected to changing restriction levels and safety guidelines. Fortunately, even before the pandemic began, the country has started to heavily invest in improving its digital infrastructure. As such, when the rest of society seemingly stopped in the first quarter of 2020, the internet served as a lifeline for many private and public entities. Students attended classes online, employees started to work remotely, and everyday consumers became more open to the idea of cashless transactions.
While it can’t be argued that the ongoing health crisis has made tremendous negative impacts on the country’s economic progress, among others, one of the silver linings of the situation is that it fast-tracked the development of digital infrastructure. The Philippines, as well as other countries in Asia, will largely depend on digital technology to enhance their recovery efforts over the next few years, according to many international financial organizations.
Here are three reasons why:
1. Digital technology is central to the creation of more economic opportunities for Filipinos
According to the Asian Development Bank (ADB), digital platforms contributed 6% or USD 1.8 trillion to Asia’s gross domestic product in 2019. After the pandemic started, however, there has been a marked increase in the number of business transactions that were carried out over the internet. This flurry of online commercial activity is partly attributed to efforts to circumvent the limitations brought about by stricter guidelines on the movement of goods and people.
As their customers were not able to drop by their stores, commercial establishments made an effort to bring their products closer to their customers through online shopping channels and marketplaces. Companies that make up the food and beverage industry did the same or partnered with food delivery platforms to continue their operations. Banks and financial services providers also ramped up their digitalization programs so that everyday consumers can freely manage their finances even if they have limited access to physical currency.
The increase in the number of digital transactions is expected to make a greater contribution to the economy of the countries in Asia, including the Philippines, from here on out. The Asian Economic Integration Report 2021 from ADB estimates that 65 million new jobs will be generated in Asia and the Pacific region every year until 2025 due to the increase in the utilization of digital technologies.
2. Wider access to digital technology can improve delivery of social services
As of 2018, about 16.7% or 17 million Filipinos live below the poverty line, and of this number, a third are individuals who belong to the agriculture industry. According to the World Bank, however, the number of impoverished people in the Philippines can increase by 2.7 million due to the effects of the pandemic on the economy. Many of these individuals depend on social services (e.g. education system, health services, and housing programs) provided by government agencies to meet their daily necessities.
In line with this, only about 73% of Filipinos have access to the internet, meaning a quarter of the country’s population cannot reliably count on the social services and economic opportunities that government and private organizations offer online. This lack of digital access to necessary support is compounded by the fact that the pandemic has made it much more difficult for people in far-flung places to travel to facilities (e.g. schools, hospitals, and banks) where their needs can be addressed adequately.
The development of digital infrastructures, such as common towers and small cell sites, in areas outside the largest cities in the Philippines, can make it much easier for people in impoverished and far-flung locations to connect to the internet. This, in turn, can bring them a step closer to accessing social services to support their basic needs. It will also connect them to employment opportunities that will empower them to lead more independent lives and become active contributors to the local economy.
3. A robust digital infrastructure will improve the country’s resiliency against shocks
The Philippines is no stranger to calamities. On top of the ongoing pandemic, the country is also periodically devastated by natural disasters like typhoons, earthquakes, and volcanic activities, as well as instances of political unrest. Largely unaided by digital technology, the responses to these destructive events have been traditionally slow, and it often takes many years for devastated locations to fully recover.
But the COVID-19 pandemic is also proof that a robust digital infrastructure can help communities become more resilient to disasters and crises. Right now, the people who live in places with a stable internet connection have the option to study, work, do business, and even socialize without leaving their homes or increasing their chances of being exposed to the virus. If everyone in the country can depend on better digital infrastructure, then more people will be able to have the same alternatives and opportunities. This, in turn, can help reduce the negative impacts of calamities on the country’s economy and its general population.
In the digital age, access to the internet is considered by many experts and countries to be a basic human right. The right to connect to digital networks is closely linked to one’s freedom of speech and right to development. The Philippines has a long way to go to ensure that all Filipinos can be a part of the country’s digital network, and digital infrastructure developers who are investing in the country have their work cut out for them.