MANILA, Philippines — Technology will play a major role in the reconfiguration of global value chains in a post-pandemic world and developing economies like the Philippines should take advantage of that in order to secure much-needed recovery.
In a webinar yesterday, Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) said digitalization would be a key driver in reshaping value chains especially as countries rebound from the pandemic.
COVID-19 has caused massive disruption in the value chain, with lockdowns hampering supply and trade across economies.
The height of the pandemic last year gave birth to more online transactions in the Philippines and most of developing countries due to government protocols on mobility restrictions and social distancing.
“More businesses would leverage on digital technology. It is a much more creative and diverse business environment and it will accelerate the whole process because of the pandemic last year,” AMRO chief economist Hoe Ee Khor said.
Some sectors were able to switch to digital operations while those that require travel or face-to- face interaction and account for a large share of employment in many economies were severely affected.
AMRO said the pandemic has accelerated the shift to the digital economy and policymakers must make the necessary changes to policies and invest in supporting infrastructure to facilitate continuity.
The challenge for many emerging economies like the Philippines will be to mobilize the funding to build the necessary infrastructure.
“The digital economy is a very important area. Application of technology is straightforward, governments just have to develop the environment and review policy and regulations,” Khor said.
Denis Hew, director of the Policy Support Unit at the Asia-Pacific Economic Cooperation, argued that technology would also cause inequality to widen and get worse.
“That’s why equal access on infrastructure will be important. Digital economy will change the way we are doing business and it is happening already,” Hew said.
AMRO said the outlook for digital consumption remains highly positive, including in the ASEAN+3 region.
Full deployment of new technologies will require the region to develop and install the necessary hard and soft infrastructures, especially for information and communication technology (ICT).
Last month, the Philippine Institute for Development Studies (PIDS) said many Filipinos are still facing a lot of infrastructure problems even as ICT is already being considered a basic necessity in the digital world.
Only around 18 percent of Filipino households have their own internet access at home and some 10 percent of barangays are still without cellular phone signals.
Worse, there are still five percent of households that do not have electricity at home while efforts to install free public WiFi in barangays have a long way to go as only 13 percent have such.
Philippines urged to utilize technology to reshape global value chains
