NextGen Day

As the Philippines battles the COVID-19 epidemic in one of the world’s longest lockdowns, the country’s economic development continues to suffer.

In a July study, Moody’s Analytics lowered its growth prediction for the Philippines, anticipating that the country’s gross domestic product (GDP) would rise by 4.9 percent by the end of the year, down from 5.3 percent in May. This figure is considerably lower than the Philippine government’s goal of 6 to 7% growth for 2021.

While bigger businesses in the Philippines see their profits gradually recover, Filipino employees are bearing the brunt of the delayed relaxation of constraints and poor GDP growth. According to the Philippine Statistics Authority, unemployment in the Philippines increased to 8.7% in April 2021, a substantial increase from the previous month’s figure of 7.1 percent. The rise corresponded to a tightening of lockdowns in certain areas of the nation, as more instances of COVID-19 were recorded.

The gig economy is a new way of life.

As job possibilities in the nation become more restricted as a result of slower economic development and physical constraints, more Filipino employees are opting for remote employment. As a result, the digital gig economy has exploded in popularity in the Philippines.

The Philippine Institute for Development Studies published a report in December 2020 that emphasized the Philippines’ accelerated development of the digital gig economy, which was fueled by improved ICT infrastructure and impacted by the COVID-19 pandemic.

The Philippine government has also emphasized the importance of the gig economy in offsetting some of the country’s economic downturn, creating job possibilities, and boosting foreign remittances.

“We are seeing the growth of the so-called gig economy in the country, and with the extended lockdown imposed due to the Covid-19 pandemic, there will be even more activities on this front as businesses adjust to the new normal,” Senator Sonny Angara said in a statement released by the Philippine News Agency.

Angara introduced Senate Bill 1469, the National Digital Careers Act, in favor of digital employees, which establishes a framework to improve possibilities for digital workers throughout the nation.

Mobile wallets, the digital economy

As more Filipinos seek work online, whether, in the gig economy or e-commerce, the amount of money moving via digital channels has increased dramatically.

According to the Philippine Central Bank (BSP), the use of e-payments has increased by “more than 5,000 percent” as a result of the pandemic, owing to improvements in smartphone and mobile internet accessibility, as well as the increasingly widespread use of QR codes and other features designed to make money transfer between people and merchants.

“In the Philippines, people have been utilizing mobile wallets even before COVID-19 was discovered. “However, the pandemic has accelerated the use of digital methods (such as mobile wallet services) for making payments, and we will continue to see increased digital adoption for transacting for Filipinos here and those living and working abroad even after the pandemic subsides and is over,” said WorldRemit Country Director Earl Melivo.

Melivo went on to say that after introducing its [immediate] international transfer service to GCash, Paymaya, and Coins.ph wallets in April 2020, WorldRemit’s own data suggests that the adoption and usage of mobile wallets in the Philippines will continue to expand significantly.

Unbanked and underbanked Filipinos now have more access to financial services because to the development of the digital economy and the increasing popularity of mobile wallet transactions.

The majority of first-time digital payment users in the Philippines are unbanked, or individuals who do not have access to conventional banking services, according to Melivo. According to a BSP study, 71% of Filipinos remained unbanked at the end of the year.

“One of the major advantages of utilizing digital payments like WorldRemit is that it reduces transaction costs, allowing us to provide [more] to our consumers. It also removes the obstacles to having a transaction/financial account, allowing it to reach tens of millions of previously unbanked consumers. Furthermore, utilizing WorldRemit’s digital platform and/or app to transfer or receive money promotes a safer, quicker, and more comfortable way of dealing in the new normal, to which we are all adapting,” Melivo said.

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