PHILIPPINE businesses are among Southeast Asia’s most digitally prepared firms, posting stronger adoption rates for digital payments, e-signatures and electronic authentication than their regional peers. However, the World Economic Forum (WEF) warned that ASEAN remains far from achieving seamless cross-border digital trade despite the conclusion of negotiations on the Asean Digital Economy Framework Agreement (Defa).
The Asean Digital Economy Outlook 2026 showed that 100 percent of surveyed Philippine enterprises use digital payment systems, while 93.6 percent are familiar with digital payments and digital trade tools.
The Philippines also surpassed regional benchmarks in the use of digital trust technologies, with 87.7 percent of firms adopting electronic signatures and 85.8 percent using electronic authentication.
The WEF conducted a two-year survey from 2024 to 2026 involving 1,500 businesses across Asean member states.
Despite the country’s strong domestic digital adoption, less than half, or 46.2 percent, of Philippine businesses surveyed were aware of Defa, the region’s planned digital trade framework. Still, this was significantly higher than the ASEAN average of 27.8 percent.
The Department of Trade and Industry said negotiations on Defa concluded in May, with Asean leaders expected to sign the agreement at the Manila Summit in November.
Defa seeks to harmonize rules governing digital trade, including cross-border e-commerce, digital payments, electronic transactions, data flows and digital identities, to create a more integrated regional digital economy.
Domestic readiness, regional disconnect
The WEF report pointed to a gap between strong domestic digital adoption and actual cross-border digital commerce across Asean.
Despite Asean’s digital economy being on track to exceed $300 billion in gross merchandise value (GMV) by 2025 and digital exports reaching $387 billion, only 53 percent of businesses participate in cross-border digital trade.
The findings suggest that while firms are increasingly digitalized within their home markets, many still face difficulties conducting transactions across Asean economies because of regulatory and operational barriers.
‘The next challenge for Asean is to ensure that firms can use digital systems to trade, pay, authenticate, sign, transfer data and comply with rules across borders,’ the report said.
Defa implementation gaps
The report identified several obstacles that Asean must address if Defa is to deliver its intended benefits.
Among companies already using cross-border digital payments, 66.8 percent reported transaction delays, while 62.5 percent cited high transaction costs.
Paperless trade also remains incomplete. Although firms increasingly submit trade documents electronically, 58.4 percent said border authorities still require hard-copy documents, forcing businesses to maintain parallel paper-based processes.
Data governance remains another major concern, with 65.9 percent of surveyed firms citing uncertainty over rules governing cross-border data transfers.
The findings underscore the lack of interoperable systems for digital payments, electronic documentation, digital identities and trusted data-sharing arrangements across the region.
MSMEs left behind
The digital divide is particularly pronounced among micro, small and medium enterprises (MSMEs), which are expected to be among the biggest beneficiaries of reduced trade barriers.
Across Asean, 73.4 percent of large firms participate in cross-border digital trade, compared with only 49.9 percent of MSMEs.
A similar gap exists in cross-border digital payments, where adoption reaches 83.2 percent among large enterprises but falls to 51.6 percent among MSMEs.
In the report’s foreword, Asean Secretary-General Kao Kim Hourn said the success of Defa would ultimately depend on whether it delivers tangible gains for businesses and consumers.
‘The success of the Asean Defa will ultimately be measured by how its commitments lead to tangible benefits for businesses and people,’ Kao said.
He added that the agreement could help smaller enterprises scale operations, expand market access and participate more actively in regional trade.
Priorities for Asean
To translate Defa into practical benefits, the WEF urged Asean governments to focus on five priorities:
Accelerating end-to-end paperless trade and National Single Window interoperability;
Expanding cross-border payment connectivity and e-invoicing systems;
Strengthening digital identity and e-signature infrastructure;
Establishing more predictable data governance through Asean Model Contractual Clauses; and
Providing MSMEs with digital trade support services and simplified compliance requirements.
The report said closing these gaps will determine whether Asean can move from strong domestic digital adoption toward a truly integrated regional digital market.