Hinrich Foundation releases Philippine Digital Trade report
On May 31, 2019, the Hinrich Foundation and AlphaBeta Advisors released the sixth in its series of country reports on digital trade at a launch event in Makati City, Philippines hosted by the Australian-New Zealand Chamber of Commerce.
The report entitled “The Digital Revolution: How the Philippines can capture the digital trade opportunity at home and abroad” highlighted the estimated 12-fold growth to US$37 billion of digitally-enabled domestic trade’s contribution to the country’s GDP, while export could grow up to 218% or US$11.8 billion in 2030 given the right regulatory environment.
Alex Boome, Program Director of Hinrich Foundation, commenced the event by welcoming the 75 attending industry stakeholders and policymakers. Boome underscored that Hinrich Foundation initiated the research to better understand the impacts of digital trade development on Asian economies and to uncover ways to maximize digital trade benefits.
Following the remarks, the Department of Trade and Industry’s Undersecretary for Competitiveness and Innovation, Rafaelita Aldaba, delivered the keynote address. She stressed that the study on the digitalization’s impact to Philippine industries came at the most opportune time when global trade is progressively transformed by automation and data exchange.
Aldaba also presented key policy implications that could facilitate digitalization in different Philippine industries and reap the economic dividend laid out in the Digital Trade report. She added, “weak institutions and implementations of policies risk the Philippine readiness to Industry 4.0.”
After the remarks, AlphaBeta Associate Genevieve Lim presented the empirical findings of the report and explained the coverage and importance of digital trade in domestic and cross-border contexts.
According to the report, digital trade drives business productivity through (1) new market identification, (2) cost reduction and speedy data management, (3) ease of support for cross-border collaboration, (4) access to richer market insights, (5) discovery of more efficient process practices, and (6) streamlining international value chains.
Lim also shared that the report sees the Philippines to be in a strong position in advocating for a conducive environment for digital trade in the region.
“This can be achieved by ensuring clarity and appropriateness of data to be shared across nations, putting in place cost-efficient requirements for intermediaries to comply with, minimizing border frictions brought by customs duties and de minimis thresholds, and avoiding too restrictive regulations around transfer of source codes for software importation,” she added.
The event concluded with an insightful panel discussion from the sharp minds of Philippine businesses and industry association directly involved in digital trade, together with Hinrich Foundation’s trade fellow Stephen Olson.
During the panel discussion, Olson emphasised on open data flow and strong ICT infrastructure in the Philippines to boost the country’s economy.
“The Philippines is in a good position to implement change in automation in trade, specifically in financial services,” said panellist Anna Green, CEO of ANZ Banking Group.
When asked about the industry-academe capacity gap, panellist Nicki Agcaoili, Executive Director for External Affairs and Investor Relations of the IT and Business Process Association of the Philippines said, “we should recognize that there is talent crisis in the Philippines, and then we can develop roadmaps to bridge the gaps brought by digital transformation.”
Agcaoili also added that the Philippines “need to be careful in regulating the industries while pushing for digitalization.” He believes that the IT and BPO industries remain optimistic on the government in calibrating necessary policies to advance in the fourth industrial revolution.
The Hinrich Foundation commissioned AlphaBeta to size the value of the digital trade opportunity (both for exports and the domestic economy) and to assess risks for eight economies in the Asia-Pacific – Australia, China, India, Indonesia, Japan, Malaysia, Philippines and Vietnam.
For more information on digital trade reports, please click here.
About the author – Froland Tajale
Froland Tajale is a scholar from the Philippines under the Hinrich Foundation Global Trade Leadership Development Program. He is currently pursuing his master’s degree in entrepreneurship and global marketing at Grenoble Ecole de Management and Hong Kong Baptist University. He is an advocate for open foreign policy and aspires to do intensive trade research and develop effective and efficient outward policies that will help unite economies.