THE adoption of digital technology increases productivity and wages in services firms in the Philippines, according to a report by the World Bank Group.
The World Bank, in its Services Unbound – Digital Technologies and Policy Reform in East Asia and Pacific report, said “new firm-level evidence from the Philippines shows that services firms that adopt digital technology increase their productivity, raise wages, and increase their value added.”
The report noted that productivity gains are more evident in information technology/data adoption and software capital than in e-commerce.
It added that firms are using productivity-enhancing digital technology like customer relationship management systems, data analytics adoption, and cloud computing to help streamline processes, enhance collaboration, enable data-driven decision-making, and expand market reach.
The bank said the diffusion of digital platforms also impacts how digitalization affects the productivity of the service sector.
In the Philippines, the report noted that the diffusion of online platforms in the services sector is associated with higher productivity and growing sales.
It added that firms that utilize services on digital platforms have seen an increase, not only in productivity but also in wages.
Although digitalization has shown positive impacts, the report underscored that these are “heterogeneous and depend on complementary factors, such as skill endowments, the regulatory environment, and level of competition.”
Last November, the World Bank approved a $750 million or approximately P43-billion loan to help the Philippine government foster digital technology adoption and drive economic growth.
“Digitalization is a transformative force that can drive productivity-led growth and enhance the efficiency of critical services such as transport, healthcare, education, energy, and agriculture in the Philippines,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said in a statement.
By fully leveraging digital transformation, the digital economy in the Philippines is projected to hit $150 billion in gross merchandise value by 2030, according to the e-Conomy SEA 2023 report issued by Google, Temasek, and Bain & Co. — Almira Louise S. Martinez