THE World Bank has approved a $750 million loan to support the Philippines’ digital transformation, aiming to boost economic growth and improve access to essential services.
In a statement, the Washington-based multilateral institution, said the Second Digital Transformation Development Policy Loan, equivalent to P44 billion, will help the government address barriers to internet access.
It also seeks to promote competition in the broadband sector, and enhance the efficiency and transparency of government services through digital technologies.
Moreover, the World Bank loan will support efforts to expand financial inclusion and improve the country’s competitiveness in the digital sector.
“Digitalization is a transformative force that can drive productivity-led growth and enhance the efficiency of critical services such as transport, healthcare, education, energy, and agriculture in the Philippines,” said Zafer Mustafaoğlu, World Bank Country Director for the Philippines, Malaysia, and Brunei.
“By leveraging digital platforms, the country can bridge gaps in service delivery, make sure that individuals and firms have access to affordable financial services and digital solutions that meet their needs, and build resilience against future crises and shocks,” he added.
The World Bank noted that greater digitalization is crucial for an economy like the Philippines, where a large population is spread across many islands.
The adoption of digital technology has increased rapidly in recent years, but more needs to be done to fully realize the advantages of digitization. A key priority is to address the lack of fixed broadband access for 72 percent of Filipino households.
“Financial inclusion and digitally enabled services are vital for the growth of micro, small, and medium enterprises, which employ over 60 percent of the total workforce in the country,” Mustafaoğlu said.
“Greater access to digital financial services enables such businesses to adopt innovative technologies and automation, thereby boosting their competitiveness and contribution to the economy,” he added.
According to World Bank projects documents reviewed by Manila Bulletin, the Philippines is scheduled to borrow an additional over $2.7 billion across seven new loans for the remainder of the current fiscal year 2025, covering the period July 1 of this year to June 30 next year.
The World Bank board is set to approve this coming December the $600-million Philippines First Energy Transition and Climate Resilience Development Policy Loan (DPL); $456-million Mindanao Transport Connectivity Improvement Project; and $496-million Philippines Health System Resilience Project.
In February of next year, the World Bank will green-light the $67.34-million Philippines Civil Service Modernization Project, as well as the $700-million Pagkilos – Locally-Led Climate Action.
By May 2025, the Philippines will borrow $150 million for the Project for Learning Upgrade Support and Decentralization; in June of next year, $250 million for the Philippine Water Supply and Sanitation Project.
To recall, Manila Bulletin earlier reported that Philippines was the fifth-biggest borrower among the World Bank’s International Bank for Reconstruction and Development (IBRD) developing country-clients during fiscal year 2024 or from July 1, 2023 to June 30 this year, during which a total of $2.35 billion in concessional loans were secured.
If poorer countries belonging to the International Development Association (IDA) are included, the Philippines ranked as the seventh-largest overall borrower from the World Bank in the previous fiscal year, just behind war-torn Ukraine ($4.086 billion in total loans), Ethiopia ($3.395 billion), Bangladesh ($3.362 billion), Türkiye ($3.191 billion), Indonesia ($3.028 billion), and India ($2.943 billion). (Derco Rosal/ MB)
