Digital service exports can help Philippines development – WB
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MANILA, Philippines — Promoting the growth of digital service exports can help the Philippines overcome development challenges, according to the World Bank.
“Global uncertainties and challenges lie ahead for the Philippines and other developing economies. Exports of digital services will put them in a strong position to meet those challenges,” World Bank lead country economist and program leader for Equitable Growth, Finance and Institutions Group Souleymane Coulibaly said in the multilateral lender’s blog.
Citing recent research, he said use of enhanced digital technologies will help promote trade and support higher value-added services.
In particular, he said increased digitalization can make white collar services ranging from professional and business services to finance, engineering and marketing activities more tradable.
“Across the world, exports of services – and digitally traded services in particular – offer a fast track to job creation and growth,” he said.
To promote the growth in services exports, he said the Philippines will have to address several constraints, such as weak infrastructure, high trade costs, low foreign direct investments, and weak learning outcomes and skills retention.
“Moreover, a lack of universal access to stable and affordable power and digital connectivity hampers the expansion of manufacturing and other industries,” he said.
While there are constraints, he said there are rays of hope for the country.
In particular, he said reforms in the telecommunications sector allowed the business process outsourcing (BPO) sector to thrive.
The BPO sector has been growing rapidly over the past 15 years and now accounts for eight percent of the country’s gross domestic product.
Coulibaly said the country has also seen an acceleration in digitalization amid the COVID-19 pandemic.
He said this development is important because extending access to high-speed internet and expanding e-commerce can facilitate the global value chain participation of small firms.
“Harnessing technological change and expanding its high-skill service sector will be critical to continued economic growth in the Philippines – and perhaps will allow it to achieve its 2040 ambitions,” he said.
The Philippines has a long-term vision of becoming a prosperous middle-class society that is free of poverty by 2040.
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