Covid catalyzes digital shift

There was robust growth in the Philippine digital economy in the last two years, creating new livelihoods and income opportunities with the emergence of online platforms that provided greater flexibility for Filipinos to balance their personal commitments and work schedules

The Philippines had one of the longest lockdowns in the world due to the Covid-19 pandemic. The first case of Covid-19 detected in the country occurred in late January, 2020.

After initially downplaying the virus, the Duterte administration finally relented to pressure from Congress and various interest groups and imposed a travel ban on flights from Wuhan, China, Macau and Hong Kong.

Then President Duterte declared a state of public health emergency in the country on 8 March 2020. Metro Manila was partially locked down for a month, from 15 March to 14 April.

On 16 March, the entire Luzon was placed under enhanced community quarantine – effectively a total lockdown was imposed and in the next several months people were disallowed from venturing out of their homes and into the streets.

People were virtually trapped within the four walls of their houses for nearly a year, unable to go out for groceries, see friends, watch movies in a cinema house, go out drinking with their barkada in a bar, or go to their banks to deposit or withdraw money and go shopping, including purchasing essential needs in supermarkets.

The period – at least until about the fourth quarter of 2020 – saw droves of people going online, accelerating the use of digital technology like never before.

When the pandemic limited how Filipinos normally went about their lives, many, including those who heretofore were formerly digital-resistant, picked up their mobile phones and/or turned on their laptops and computers to transact digitally, and work and studied remotely.

MOBILE gadget becomes indespensable. | PHOTOGRAPH COURTESY OF UNIONBANK

E-commerce and e-payment platforms played a predominant part in the everyday lives of many Filipinos, driving significant growth in the Philippine digital economy by as much as 55 percent – a figure which represented the highest spike in the Southeast Asian region during the lockdown.

“Going forward, the country is seen to sustain long-term adoption of e-commerce which is a big opportunity for post-Covid recovery,” said Victor Andres Manhit, founder and managing director of Stratbase, a research-driven advisory consultancy group.

Digital economy jumps to $17B

Manhit refers to a study undertaken by Google, Singapore-based holding company Temasek, and global consulting firm Bain & Company which found that the digital economy in the country, driven by mass digital adoption at the height of the Covid-19 pandemic, surged to a gross valuation of some $17 billion in 2021.

With an estimated 12 million new digital consumers and a projected $40 billion valuation by 2025, the Philippines is now the fastest-growing economy in the Southeast Asian region.

“There was robust growth in the Philippine digital economy in the last two years, creating new livelihoods and income opportunities with the emergence of online platforms that provided greater flexibility for Filipinos to balance their personal commitments and work schedules,” said Manhit.

Many workers, particularly among digital nomads, transitioned to online platforms because they provided them with the flexibility of time, greater income opportunities, and increased autonomy.

In Boracay, where I “escaped” from lockdown in Metro Manila – I got to meet a number of these so-called digital nomads – basically, people – Filipinos and a smattering of expats in their 20s and 30s employed as digital marketing officers, strategists, and producers; business intelligence analytics officers; social media, programmatic media and web analytic managers, et cetera, who were well-paid enough to stay on the near-empty paradisiac island for some time, taking advantage of the slashed-down rates of resorts while they remotely worked (and alternately partied) hard on their mobile phones and laptops.

One of the biggest trends seen during the pandemic is the rise of digital nomads – people who can work anywhere outside of a set physical workspace for as long as they have internet access.

It wasn’t only in Boracay where these roving digital workers roosted temporarily; they were likewise seen in such places as Siargao, La Union, Bohol, and other similar spots in the country where Covid-19-deterrent sunshine shone and the ocean glimmered and where they could work and party hard in equal measure, the pandemic be damned.

Perhaps, it could be well worth the attention of the Department of Tourism to consider offering the country as an ideal location where digital nomads can work and have fun while boosting tourism and the national coffers with much-needed revenues.

NECESSITY breeds innovation during the health crisis. | ILLUSTRATION BY GLEN TOLO

74-M netizens

The Digital 2021 report revealed that some 74 million people in the Philippines used the internet in January 2021, which is roughly 67 percent of the country’s total population.

According to the Digital 2022 report issued earlier this year by social media management company Hootsuite and We Are Social, that number jumped to 76.02 million.

The report also showed that internet users aged 16 to 64 across the globe spent an average of six hours and 58 minutes using the internet each day on any device. It means, a typical internet user now spends more than 40 percent of their day online.

DIGITALIZATION offered wider options for business.

On the other hand, Filipinos in the same age range spent an average of 10 hours and 27 minutes each day.

According to GSMA Intelligence, the Philippines recorded 156.5 million cellular mobile connections this year, with an increase of 6.9 million between 2021 and 2022.

That is equivalent to 140 percent of the total population in 2022. In addition to that, 96.5 percent of Filipinos use cellular mobile connections that are broadband.

Around 51 percent of the online web traffic comes from mobile, which is 14.5 percent higher compared to last year. This is followed by laptops and desktops at 47.14 percent, and tablet devices at 1.79 percent.

Filipinos who spend time using the internet through their mobile devices spend an average of five hours and 47 minutes which is longer than the average of three hours and 43 minutes spent by internet users globally who surf the web using mobile devices. Typical mobile user ranges from ages 16 to 64 years old.

Experts in the field say the pandemic has effectively propelled the digital transformation of countries worldwide by at least half a decade. This should be looked at by the Philippines as a substantial opportunity to ride on the great digital wave.

Singapore-based strategic economics consultancy firm AlphaBeta was commissioned by Google to look closely at the significance of broad digital use in the Philippines.

Its findings? If fully leveraged transformation via digital technologies could unlock P5 trillion worth of annual economic value in the country by 2030. This is equivalent to nearly 30 percent of the Philippine GDP in 2020.

The study also posits that digital technology applications can produce an economic value of P3.5 trillion annually.

All these, however, would be in vain unless the country substantially improves its digital infrastructure and Internet connectivity.


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