THE World Bank has extended a $750-million loan to support the country’s ambitious agenda for fostering a competitive digital sector.
The financing will be under the multilateral organization’s Second Digital Transformation Development Policy Loan, which is aimed at driving productivity-led growth, bridging gaps in essential service delivery and making the Philippines’ economy more resilient.
The World Bank last month approved the first part of the agreement amounting to $600 million, which will help the government digitize its operations, expand digital financial services and promote digital services.
The second policy loan, meanwhile, will enable the Philippines to focus on four main objectives: reducing entry barriers in the broadband sector; enhancing the regulatory and legal digital environment; expanding financial inclusion; and fostering growth in digital services and e-commerce.
These aim to create a more inclusive economy where technology bolsters sectors like transport, health care, education and agriculture.
With over 72 percent of Filipino households lacking fixed broadband, the World Bank said that the digital divide remained a significant hurdle.
World Bank Country Director for the Philippines Zafer Mustafaoglu noted that enhancing digital platforms could span service delivery gaps and provide affordable digital solutions.
“By leveraging digital platforms, the country can bridge gaps in service delivery, make sure that individuals and firms have access to affordable financial services and digital solutions that meet their needs, and build resilience against future crises and shocks,” he added.
A substantial component of the loan will be dedicated to promoting digital financial services — crucial for increasing financial inclusion among the micro, small and medium enterprises (MSMEs) that employ over 60 percent of the Philippine workforce.
Enhanced access to secure digital services will support MSMEs in adopting innovative technology, driving competitiveness and contributing to economic growth.
Mustafaoglu noted that digital financial inclusion was essential to empower MSMEs, facilitating technology adoption that can lead to better automation and efficiency.
“Financial inclusion and digitally enabled services are vital for the growth of micro, small and medium enterprises, which employ over 60 percent of the total workforce in the country,” he said.
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