World Bank approves $600M loan for Philippines

 World Bank approves $600M loan for Philippines’ digital transformation.

Washington-based multilateral lender World Bank has approved a $600-million policy loan financing scheme to support the Philippine government’s digitalization initiatives.

In a statement on Saturday, the World Bank said its Board of Executive Directors approved the amount for the Philippines’ First Digital Transformation Development Policy Loan.

The loan program aims to promote the digital transformation of government and digital infrastructure policies, expand financial inclusion through digital finance, and stimulate the growth of digital services, the multilateral lender said.

It added that the financing scheme will also help the Philippine government digitize operations and service delivery, foster competition in the digital infrastructure markets, and encourage the adoption of digital payments and financial services.

Moreover, the program will facilitate reforms to promote e-commerce, enhance competition and value-added activities in digital services markets, and strengthen skills development in the industry.

“Greater adoption of digital technology can improve the efficiency and transparency of government services, empowering individuals who were previously far away from decision-making centers,” said Ndiamé Diop, World Bank country director for Brunei, Malaysia, the Philippines, and Thailand.

“Digitalization can also drive productivity growth, by reducing operating costs for firms and enhancing their resilience and preparedness for future crises,” said Diop.

Digital economy

The World Bank noted that widespread adoption of digital payments in the Philippines is essential for the development of a digital economy, benefiting millions of citizens and small businesses.

The lender said that currently, cash is the dominant form of payment for over-the-counter purchases in grocery stores at 95%, government service payments such as driver's licenses or birth certificate issuance at 97%, and government fees and penalties like traffic violation tickets at 88%.

“Transitioning to a cashless economy would provide various benefits, especially during climate-related and natural disasters, enabling the government and the private sector to respond swiftly and efficiently,” said Smita Kuriakose, lead economist in the World Bank’s Finance, Competitiveness, and Innovation Global Practice.