THE Philippines is at the bottom rung, at 47, in a digital-economy ranking of 50 countries sponsored by MasterCard Inc.
Despite a positive change of 5.37 in the index score since 2008, the country is still ranked near Nigeria, which is at the bottom of the rung, with an index score of 13.77. The Philippines was given a score of 19.38, just a rung below Indonesia, which was given a score of 19.85.
The study by MasterCard and The Fletcher School at Tufts University analyzed each market’s evolution from 2008 to 2013 to understand country benchmarks, track progress and identify areas for improvement in creating and managing a digital economy.
The organizations grouped countries into four trajectory zones: Break Out, Stall Out, Stand Out, and Watch Out.
The Philippines was grouped under the Break Out zone, along with India, China, Brazil and Vietnam—countries that currently have low readiness scores, but are rapidly evolving.
“If their evolution rates sustain, these countries will emerge as strong digital economies, but the index shows that the next phase of growth may be harder to achieve.”
“Some of the countries that are ready to break out and on the cusp are also some of the world’s most populous nations, including China, India, Mexico, Indonesia, Brazil and the Philippines,” the report, titled “Digital Planet: Readying for the Rise of the e-Consumer,” said.
The report said it created the Digital Evolution Index (DEI) after analyzing datasets from public sources, such as the World Bank and private sources. “The research team created an analytical framework for recognizing patterns and making sense of the global digital landscape, discerning country trends, and evaluating their relative strengths and weaknesses.”
The authors, Bhaskar Chakravorti, Christopher Tunnard and Ravi Shankar Chaturvedi, said the DEI aims to “enable businesses and governments to make sense of the evolving global digital landscape, reveal patterns and provide insights into current and future Internet users.”
The report said the Philippines is among the countries that have “attractive demographics” but “underinvestment represent untapped potential.”
The report said 38.7 percent of the country’s total population of 98,393,574 are smartphone users.
Internet users form 37 percent of the total population, or 40 million.
The Philippines also has a low credit-card penetration of 3 percent, creating cash-on-delivery payment scenarios, according to the report.
Along with Chile, Colombia, Thailand and Indonesia, the Philippines is considered as among the fastest-evolving economies.
Its “growing per-capita demand score multiplied by the size of populations reveals immense demand potential.”
The Philippines has a per-capita gross domestic product (GDP) of $2,765. Indonesia, to compare, has $3,475; Chile, $15,732; Colombia, $7,826; and Thailand, $5,779, according to the report.
Nigeria, at the bottom of the rung, has a per-capita GDP of $3,010, while Vietnam, which is nearer the Philippines’s total population at 89,708,900, has a per-capita GDP of $1,911.
Vietnam was given a DEI score of 20.29 and is the 45th country in the ranking. Thailand and Singapore, also Asean members, have a DEI score of 28.42 and 56.21, respectively.
Singapore topped the DEI ranking at the No. 1 spot, ahead even of Sweden (55.23 DEI); Hong Kong (53.52 DEI); the United Kingdom (53.41 DEI); Switzerland (53.32 DEI) and the United States (51.79 DEI).
Thailand, China and Malaysia are the top 3 fastest-moving digital economies, a result of their rapidly increasing Internet and smartphone population.
“The increasingly integrated Asean economies, with their similar trajectories and 600-plus-million consumers, are also compelling candidates for digital-commerce investments,” the report said.
It added: “Yet, despite their rapid evolution, the Break Out countries of Indonesia, Thailand [and] the Philippines have received relatively little private equity investment to date.”
The authors believe, however, that “Asean’s integration and tariff harmonization will generate opportunities for the creation of regional marketplaces and delivery networks.” The report noted, too, that the Philippines has demonstrated an overall improvement in Digital Evolution score of almost 20 percent from 2008 to 2013.