MANILA - Digital transformation in the Philippines could generate as much as P5 trillion in annual economic value by 2030 as technology helps businesses shift online and grow during the pandemic, a new report commissioned by Google released Tuesday showed.
Out of the total, some P3.5 trillion could come from technologies that mitigate the impact of the COVID-19 pandemic, the global tech giant said in a virtual briefing, citing the report conducted by economists at AlphaBeta.
The estimates were based on "transformative technologies" that boost the digitalization journey of micro, small and medium enterprises (MSMEs). These include artificial intelligence, mobile internet for digitization of retail distribution channels, and IoT or the internet of things, among others, Google said.
"Digital adoption is crucial for the Philippines to unlock new opportunities and gain resilience in the post-pandemic future," Google Philippines country director Bernadette Nacario said.
In 2020, the Internet economy in the Philippines was estimated to be worth $7.5 billion, AlphaBeta said. This is expected to grow 30 percent annually to $28 billion by 2025, said AlphaBeta Founder and managing director Fraser Thompson, thanks to the country’s young and tech-savvy population.
To fully optimize digital opportunities, the country should focus on enhancing digital skills, accelerating digital adoption and innovation, and promoting digital trade opportunities, Thompson said.
However, challenges need to be addressed, he said.
Based on the report, over 50 percent of firms in the country do not have a web presence while only 26 percent of MSMEs are aware of digitalization efforts.
There is also digital skills gaps, complex regulations, and an internet access gap, the report added.
Google is able to help MSMEs through programs and tools that enable them to accept e-payments, facilitate remote work and by providing new technologies, Nacario said.
As of 2020, businesses derive P363.4 billion in annual benefits from Google tools and services including Google Search, Google Ads, AdSense, Google Play and YouTube, through increased revenues, digital connections, efficiency and savings, AlphaBeta said based on its study.
App developers in the country earn P384 million in annual revenue through Google Play with a reach of over 1 billion users globally.
Consumers', meanwhile received P214.5 billion in benefits annually through convenience, access to information and enhanced productivity with the help of Google Search, Google Maps, YouTube, Google Drive, Docs, Sheets, Photos and Google Play, data showed.
“Through this report, we have also been able to demonstrate some ways that Google’s tools and services are already benefiting the Philippine digital economy," Nacario said.
With Google's Google Ads, AdSense as well as YouTube, among others, businesses were able to unlock new revenue streams and expand, it said.
Through its collaboration with companies as well as the tools it provides, Google said it indirectly supports over 110,000 jobs in the country.
Trade Secretary Ramon Lopez also said its program with Google, called the MSME Caravan was able to train over 46,000 firms.
"We will continue to work closely with our partners from the public and private sectors to fully unlock the opportunities of our rising digital economy and empower Filipinos to succeed and grow online," Lopez said.
Over 99 percent of companies in the country are made up of MSMEs.
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