Digitalization and the Private Sector as the force for recovery

Dindo Manhit, President, Stratbase ADR Institute

The results that policymakers had hoped for when the Philippines was locked down in March 2020 to curb the spread of COVID-19 did not happen. A year after, the National Capital Region and the surrounding provinces of Bulacan, Cavite, Laguna, and Rizal have again been put under lockdown, with 11 hours curfews, the highest infection rates, and healthcare systems stressed to critical levels. In this scenario, the week-long enhanced community quarantine has been extended.

The economy went into recession as thousands of businesses had to either temporarily or permanently halt operations, and millions of people lost their jobs and experienced involuntary hunger. To date, the Philippine economy is yet to show significant signs of recovery at pace with its Southeast Asian neighbors and might take some time to catch up as the economy contracted by 9.5% in 2020, the worst in 73 years and the lowest in the region. Recent data from the Philippine Statistics Authority (PSA) show that the unemployment rate was recorded at 8.8% in February 2021 — slightly higher than the 8.7% the month earlier — but this still translated to 4.2 million unemployed Filipinos. As such, the country is projected to be the last to recover in the region.

Despite having the most prolonged and strictest lockdown in the world, the spread of the virus in the Philippines has not been contained, and recent data showed record highs of more than 10,000 cases. While other countries are successfully implementing their vaccination programs to recover more quickly, the Philippine government continues to rely on prolonged lockdowns and curfews and is still in a state of trial and error in implementing their COVID-19 response efforts, including vaccination. Haven’t policymakers learned any lessons?

Economic managers have recognized the need for digitalization to adapt and recover from this emergency situation. The National Economic and Development Authority (NEDA) recently published an updated Philippine Development Plan (PDP) 2017-2022, which now takes into consideration the socio-economic impacts of the COVID-19 pandemic. It seeks to build the foundation for a healthy and resilient Philippines through five key programs under the new normal: 1.) health system improvement; 2.) food security and resiliency; 3.) learning continuity; 4.) digital transformation; and, 5.) regional development through the Balik Probinsya, Bagong Pag-Asa Program.

A noteworthy aspect of these five programs is digital transformation, as mobility restrictions have forced people to work-from-home, buy essential goods online, do online transactions, and the like. This has given rise to an emerging business sector engaged in mobility as a service.

Another imminent force in the country’s recovery and development is characterized by the growing clamor for a dynamic leadership of the private sector. Just recently, the Stratbase ADR Institute held a virtual roundtable discussion entitled, “The Private Sector as the Reliable Partner for Economic Recovery.” Chairman Ambassador Albert del Rosario commended the tech savviness of Filipinos, which he said is a great potential for the country. Everyone quickly shifted from predominantly face-to-face manual mode of interactions towards a digitalized system of communications and transactions. And that, without the government having to advise them to. Almost as quickly, public and private institutions teamed together to adapt to a “new normal” and change their ways by stepping-up their initiatives for digital transformation in order to continue delivering their goods and services to their clients. “This crisis has unveiled a transformative potential that is actually achievable with existing technologies,” he said. 

“Technology is a powerful tool not just for communications and business processes, but just as important, in managing the risks to the environment. This is a realm wherein nimbleness, innovation, expertise, and mobility of resources is needed, attributes that are native to the developmental spirit of the private sector,” he added.

Ayala Corp. Chairman and CEO Jaime Augusto Zobel de Ayala elaborated, saying that “the strengths of the private sector — its resources, ingenuity, energy and performance management discipline — are crucial to augment the Government’s massive machinery; and even co-develop new ways to deliver critical aid and other forms of support to our stakeholders.

“I sincerely believe that the private sector is a force for growth and a force for good. And if we continue to put our collective resources and determination to task, we will be able to multiply the growth and the good that we contribute to nation-building,” Mr. Zobel said.

A pioneering intervention is the country’s biggest 5G Hackathon, launched by De La Salle University’s Animo Labs in cooperation with Globe Telecom. The ongoing competition will create opportunities for students and professionals to develop our own innovations in 5G technology to solve real life problems in Education, Health Care, Livelihood, Retail, Manufacturing, Logistics, E-Commerce, Disaster risk management, Sustainability, Asset and Resource Management, and Transportation.

Digital transformation and private sector participation will not only bolster pandemic responses but will, in turn, jointly facilitate improvements in the agenda espoused by the updated PDP 2017-2022, i.e., health system, food security and resiliency, learning community, and regional development, by providing jobs, income security, and investments. Additionally, such development plans will entail the holistic engagement of the different stakeholders of society and set forward the path to national recovery.

In the aspect of leadership, President Duterte and his administration should inspire the people’s confidence and behavior with good governance demonstrated through transparency, professionalism, and statesmanship that does not polarize and produces positive results. Otherwise, the high trust and approval ratings of President Duterte is merely a synthetic embellishment that cannot not hide a suffering country.

This article was originally published in BusinessWorld.

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