The nation’s digital economic system continues to develop, albeit at a slower charge.
MANILA, Philippines – The digital economic system of the Philippines grew at a slower charge in 2024, leading to a smaller share to complete output, after e-commerce posted a softer enlargement following the nation’s earlier bout of excessive inflation and rates of interest.
The gross worth added of the native digital economic system went up by 7.6 % year-on-year to P2.25 trillion in 2024, the Philippine Statistics Authority (PSA) reported on Tuesday.
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However that tempo of enlargement marked a moderation from the 8.8-percent development seen in 2023.
Such a slowdown, in flip, translated to a smaller contribution to the Philippines’ gross home product (GDP).
The PSA stated the digital economic system contributed 8.5 % to the nation’s P26.4-trillion GDP final yr, decrease than its earlier share of 8.6 % in 2023.
E-commerce
State statisticians stated the digital economic system encompasses digital transactions below 4 key parts: digital-enabling infrastructure, digital content material and media, e-commerce and authorities digital providers.
Information confirmed the expansion of e-commerce––which accounted for 13.5 % of the native digital economic system––considerably eased to 10.2 % in 2024, from 31.8 % beforehand.
It was the one part of the digital economic system that registered a weaker enlargement.
Reinielle Matt Erece, an economist at Oikonomia Advisory & Analysis Inc., stated the final episode of excessive inflation and costly borrowing prices may need prevented e-commerce from mustering a stronger development.
“The sluggish e-commerce development is reflective of sluggish client demand development,” Erece stated.
“In 2024, the inflation numbers, particularly through the first half of the yr, could have affected expectations, and consequently demand for items which can have inspired saving,” he added.
In the meantime, digital-enabling infrastructure––the largest contributor to the digital economic system with an 83.8 % share––grew at a quicker charge of seven.3 % from 6.4 % earlier than.
Below this section, ICT-enabled providers, which depend skilled and enterprise assist providers in addition to digital cost providers, expanded by 11.1 % from 10.4 % beforehand.
Progress of digital content material and media additionally sped as much as 5.1 % in 2024, from 4.4 % within the previous yr.
Lastly, authorities digital providers returned to development mode after increasing by 2.3 %, a reversal from the 37.5 % contraction in 2023.
Sustained development
Erece stated the federal government might play a extra energetic function in boosting the digital economic system by ramping up digitalization initiatives, significantly in tax assortment.
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“This requires higher digitalization efforts to reinforce income assortment, ease of doing enterprise and general enhance authorities effectivity,” he added,
By way of employment, the digital economic system engaged 11.30 million employees in 2024, up by 4.8 % from 10.78 million in 2023. The sector’s share to the full nationwide employment stood at 23.1 %.
John Paolo Rivera, a senior analysis fellow at state-run assume tank Philippine Institute for Improvement Research, believed that the digital economic system would doubtless clock in stronger development within the subsequent few years.
“Shifting ahead, development on this sector will doubtless stay robust, fueled by e-commerce, digital finance, well being tech, AI purposes and distant providers,” Rivera stated.
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“Though bottlenecks in digital infrastructure and regulatory challenges have to be addressed to unlock its full potential,” he added.