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Future Growth for The Philippines Lies in Digital Innovations


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Wed, 23 Jan. 2019
    Oxford Business Group

In an interview with Global Platform, Jovy Hernandez, Senior Vice President of PLDT Enterprise, talks about leveraging the country’s talented and forward-thinking labour force by introducing new technologies and digital solutions to business operations. Crucial to the success of this digital transformation will be the adoption of security measures against cyber threats and the utilisation of data centres to disrupt current business models. Global fintech companies have already honed in on the Philippines’ potential, especially given its sizeable population in rural areas, and enterprises in other areas are expected to follow suit.


If I look at the Philippines in the next three years, so we have always been trying to set our eyes on 2022, or in this case 2021. We’re still the country with the fastest growth rate. Historically what we have seen is that the Philippine economy, despite the many challenges, and I think the business community has partnered together with the public sector to really make sure that the growth continues. The banking industry is still going to continue to grow as they try to reach more of the constituents even outside of Metro Manila.

We are seeing a lot of digital companies on fintech for example who are targeting the Philippines because there are still a lot of things that we can do to make the people in the rural area benefit from fintech technologies. The immediate growth that we are seeing from the BPO sector is not in Manila. We’re seeing them grow into Tier-2 and Tier-3 cities, which is very crucial as we try to move a lot of the expansion to the region. I’m seeing a very bright future for 2019 and up to, I think, more than five years from now.

Large enterprises in the Philippines have varying degrees of their levels of security measured. Some of them have implemented very sophisticated technologies already, and some are still just starting. Will they build their own data centres, for example? Will they build their own pool of expertise? Do they have access to the global intelligence reports? So that’s the holistic approach we wanted to try to espouse to our customers. The SMEs are smaller, and there is sometimes a false sense of security that we are small and we will not be attacked by cybercriminals.

In fact, there was a study by Wall Street Journal that – especially for small businesses – once they are attacked, almost 80% of the small companies that are attacked never get to recover, and that is the reason why cybersecurity needs to be at the core of their business as well. Cybersecurity for the government we feel is no different than cybersecurity for enterprises. A lot of their customers and constituents are now accessing data from the internet, so if you take a look at it from a cybersecurity professional’s perspective, there’s a bigger area to target.

We pursue innovation, we have learned that we cannot do it alone and the key to success for us has always been partnerships. You can partner with the provider such as PLDT or in this case EPLDT; you can just have a subscription model that allows SMEs to actually have access without having to build it on their own. A lot of US companies, for example, learn from customer services from the Philippines, and I think that is one of the key traits that the Filipino worker has. It’s the empathy towards a customer that is the reason also why we are the number one contact centre hub of the world.

Data is now the new currency of any business. We are trying to make decisions faster by making more data-driven decisions, and it has been talked about in the past that’s going to be the success factor of any digital business moving forward. Traditional businesses are getting disrupted and the newer guys that are coming in are all data-driven. Those data-driven decisions and changing the business models are the ones that are going to disrupt current business models. And you put the Philippines into the map for Asia.

It has always been our aspiration or a question whether the Philippines could be a data centre hub of Asia. Historically that has always been Singapore and Hong Kong. That is where all the big data centres are. But if we take a look at the recent history though we have had, over the past five years we have grown the number of data centres in the Philippines in the PLDT group alone from one to 10 data centres already and even all the regional guys, even the international global digital companies are here. And why would you say that? First, we have our 105m Filipinos today and we are still the biggest in terms of social media. Everybody is connected; that’s why all of these global companies are actually looking at the Philippines as a great destination because everybody is definitely connected. And the number of eyeballs that could be tapped as a potential is large.

The challenge that I’m seeing for digital transformation to happen here in the country first and foremost is in companies accepting that it is time to disrupt themselves. The traditional companies that we are seeing are now moving into digital transformation more actively compared to previous years and it is a very good sign. The SME segment still comprises 99% of the Philippine economy in terms of the number of enterprises, and if we’re able to grow that then the multitude of laws for the country in terms of its GDP is going to be tremendous. The role of ICT and that growth for SME is very, very critical. We’ve seen over the years that the most successful companies have made ICT or digital as part of the ecosystem.

The younger entrepreneurs today are more technologically adept, we think. They are more open to adopting the technology, and we’re seeing a lot of different models moving forward. Young budding entrepreneurs are now starting their businesses on their own, and that’s going to be good for the Philippines. The global Filipino talent is worth looking into more than just a cost arbitrage. Companies have realised that the Filipinos or the Philippines’ service is not just about labour arbitrage, it’s not about cost anymore. The quality of the Filipino workforce is something that we can be proud of.

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