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'The draft Presidential Executive, if passed, would effectively force the localization of broad categories of public and private sector data in the Philippines'
As one of the fastest growing digital economies in Southeast Asia, the Philippines is well-poised to benefit from the new ASEAN-wide Digital Economy Framework Agreement that is currently being negotiated, as well as the immense strength of ASEAN’s digital economy. According to the Boston Consulting Group, the economic bloc’s digital economy is projected to triple to $1 trillion by 2030.
However, a new proposal by the Philippine government to severely restrict the transfer of data overseas threatens to undermine the country’s digital economic potential. The draft Presidential Executive, if passed, would effectively force the localization of broad categories of public and private sector data in the Philippines. Data is fundamental to e-commerce and the free flow of data across borders is critical to the growth of the Philippine digital economy.
Given that the Philippines has always been a regional leader for cross-border data flows, the sudden reversal in policy direction will impact investor trust and confidence. It is also completely unclear what is motivating this paradigm shift in the country’s policy position.
are enabling fintech innovation and financial inclusion for the underbanked. Data localization mandates will increase the cost for digital banks, reducing access to secure global IT infrastructure, and broadly, set back financial inclusion for large swathes of Filipinos. The IT-BPM industry is expected to generate $35.9 billion in revenues this year, up 10.5% YOY .
Data localization mandates run counter to Philippines’ international postures and commitments on cross-border data flows. For example, in the
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