WEF sees PHL digital economy benefiting from ASEAN DEFA

THE Philippines’ growing digital economy can benefit from cross-border collaboration through the Association of Southeast Asian Nations (ASEAN) Digital Economy Framework Agreement (DEFA), the World Economic Forum (WEF) said.

“The Philippines’ economy has the potential and already is one of the leading forces when it comes to areas like e-commerce,” WEF Head Regional Agenda Asia Pacific Joo-Ok Lee said during the BusinessWorld Economic Forum.

“There’s a very strong service sector within the Philippines that would have a stronger impact on the digital economy and cross-border collaboration.”

In 2023, ASEAN leaders agreed to start negotiations on DEFA, the world’s first major region-wide digital economy agreement, in response to increasing digital transformation and the digital divide.

“By 2025, ASEAN should be integrated with a harmonized set of rules and regulations governing the digital economy and also within the nine elements that exist within the agreement to adapt towards the changing digital economy,” he said.

These pillars are digital trade; cross-border e-commerce; payment and e-invoicing; digital ID and authentication; and cross-border data flow and data protection; online safety and cybersecurity; cooperation on emerging topics; talent mobility and cooperation; and competition policy.

Mr. Lee, citing WEF, said that if DEFA is concluded an estimated $1 trillion gross merchandise value can be achieved by 2030.

He also cited high expectations for the Philippines as it chairs ASEAN summit meetings in 2026, giving it a key role in the key stages of ratifying or implementing DEFA.

Citing Google’s e-Conomy SEA Report 2023, Southeast Asia’s revenue from the digital economy was reported at $100 billion and is projected at $600 billion gross merchandise value (GMV) by 2030.

This is driven by online engagement, a young tech-savvy population, and a rise in e-commerce and financial services.

However, Mr. Lee said that the Philippines should not be complacent even with the region-wide digital economy in good health, citing the need for reskilling, upskilling, and talent development “to make sure that generative artificial intelligence… doesn’t disrupt and destroy jobs.”

In terms of cybersecurity, he added that even without DEFA, there is already a need for cross-border collaboration.

“It’s just that DEFA provides a framework of how they can coordinate the different approaches within ASEAN across different countries and how to really build a mechanism towards a stronger joint cyber security protection,” he said.

With the backing of the ASEAN-Korea Cooperation Fund, the WEF is supporting the ASEAN DEFA negotiations with the ASEAN Digital Economy Agreement Leadership project (ASEAN DEAL).

The key areas of this project are providing an online depository of all previous relevant digital economy agreements (DEAL Depository), an annual business survey, and capacity building. — Aubrey Rose A. Inosante