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Downloaded from the World Integrated Trade Solution (WITS, Data As of 5 January 2021) The Economic and Social Commission for Asia and the Pacific (ESCAP) serves as the United Nations’ regional hub for promoting cooperation among countries to achieve inclusive and sustainable development. The largest regional intergovernmental platform with 53 member States and 9 associate members, ESCAP has emerged as a strong regional think-tank offering countries sound analytical products that shed light on the evolving economic, social and environmental dynamics of the region. The Commission’s strategic focus is to deliver on the 2030 Agenda for Sustainable Development, which it does by reinforcing and deepening regional cooperation and integration to advance connectivity, financial cooperation and market integration. ESCAP’s research and analysis, coupled with its policy advisory services, capacity-building and technical assistance to governments, aims to support the sustainable and inclusive development ambitions of countries. Copyright © United Nations 2021 All rights reserved The report is available at: Disclaimers: The designations employed and the presentation of the material in the report do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The United Nations bears no responsibility for the availability or functionality of URLs. Opinion, figures and estimates set forth in this publication are the responsibility of the authors and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations. Any errors are the responsibility of the authors. Mention of firm names and commercial products does not imply the endorsement of the United Nations. This report has been issued without formal editing. Acknowledgements This ESCAP-PIDS report is part of the 11th Tranche of the Development Account on Measuring, monitoring and improving performance in regional integration within ECA, ESCWA and ESCAP regions. Under overall guidance of Yann Duval, Officer-in-Charge, Trade, Investment and Innovation Division of ESCAP, and section Chief, Trade Policy and Facilitation Section, and supervision of Witada Anukoonwattaka, Economic Affairs Officer and project manager, this report was prepared by the researchers of the Philippine Institute for Development Studies (PIDS), led by Francis Mark A. Quimba. The PIDS researchers that prepared this report include Sylwyn C. CaliZo Jr., Jean Clarisse T. Carlos and Jose Ramon G. Albert.1 The researchers are grateful to Martina Ferracane, European University Institute, for providing technical guidance and comments during the preparation of this report. The report is also benefited from inputs and comments received from national consultation meetings with several governments and non-government entities and experts in Philippines. 1 Francis Mark A. Quimba, Sylwyn C. Calizo Jr., Jean Clarisse T. Carlos and Jose Ramon G. Albert is Senior Research Fellow, Research Specialist, Project Evaluation Officer III (Philippine APEC Study Center Network), and Senior Research Fellow, respectively, from the Philippine Institute for Development Studies (PIDS). i Abstract This study assessed the Philippines' readiness for regional digital trade integration with the Asia-Pacific by using the Regional Digital Trade Integration Index (RDTII) framework to provide an analytical overview of the Philippines' digital trade policy and regulatory environment. Using the RDTII framework, the Philippines reported an overall RDTII score of 0.342 in 2020, which rates the country as having a relatively open digital trade environment. In the same year, the Philippines performed best in three pillars, particularly: pillar 1 (tariffs and trade defense measures); pillar 6 (cross-border data policies); and, pillar 8 (intermediary liability and content access). All of these three pillars scored less than 0.200, thus, indicating a non-restrictive policy and regulatory environment. In contrast, the Philippines performed worst in three pillars, namely: pillar 2 (public procurement); pillar 3 (foreign direct investment); and, pillar 5 (telecommunications infrastructure and competition). These three pillars reported a score of above 0.610, so these pillars were characteriZed with having a strongly restrictive policy and regulatory environment. Meanwhile, the Philippines was found to be slightly restrictive in intellectual property rights (pillar 4), domestic policies on the use of data (pillar 7), quantitative trade restrictions (pillar 9), standards (pillar 10), and online sales and transactions (pillar 11), which all received a score ranging from 0.210-0.400. This study finds that the Philippines generally has an open policy environment for digital trade, which suggests that it is ready for digital trade integration with the region. However, the proper implementation of some of these policies has not been fully achieved, and this could be a great obstacle or challenge to regional integration. Keywords: digital economy, regional integration, digital trade, Philippines, RDTII, regional digital trade integration index ii Contents Acknowledgements .................................................................................................................. i Abstract ................................................................................................................................... ii Contents ................................................................................................................................. iii Abbreviations and Acronyms ............................................................................................... vi Executive summary ................................................................................................................ 1 Introduction ............................................................................................................................. 5 A. About the project ............................................................................................................. 6 B. Objectives of the study .................................................................................................... 7 Why is Regional Digital Trade Integration Worth Pursuing by the Philippines? ........... 8 A. DigitaliZation is quickly transforming how the world trades .......................................... 8 B. Regional trade agreements are getting deeper ................................................................. 9 C. The Philippines is in a good position to pursue regional digital trade integration ........ 10 Methodology .......................................................................................................................... 16 A. The Regional Digital Trade Integration Index .............................................................. 16 B. Sources of data ............................................................................................................... 18 Results and discussion .......................................................................................................... 20 A. Measuring the Philippines’ readiness for digital trade integration ................................ 20 1. Pillar 1: Tariffs and trade defense measures applied on intraregional imports of ICT- related goods .................................................................................................................. 22 2. Pillar 2: Public procurement on digital goods and services ....................................... 26 3. Pillar 3: Foreign investment in sectors relevant for digital trade ............................... 28 4. Pillar 4: Intellectual Property Rights ......................................................................... 30 5. Pillar 5: Telecom infrastructure and competition ...................................................... 34 6. Pillar 6: Cross-border data policies ............................................................................ 36 7. Pillar 7: Domestic data policies ................................................................................. 38 8. Pillar 8: Intermediary liability and content access ..................................................... 40 9. Pillar 9: Quantitative trade restrictions ...................................................................... 42 10. Pillar 10: Standards .................................................................................................. 44 11. Pillar 11: Online sales and transactions ................................................................... 45 B. Exploring the Philippines’ collaboration with the international community ................ 46 1. The Boracay Action Agenda to GlobaliZe MSMEs ................................................... 47 2. Digital Science and Analytics Competencies ............................................................ 48 3. WIPO Internet Treaties .............................................................................................. 48 iii 4. ASEAN Single Window ............................................................................................ 49 5. Budapest Convention on Cybercrime ........................................................................ 50 Conclusion and policy recommendations ........................................................................... 51 A. The Philippines is Ready for Regional Digital Trade Integration
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