How the Philippines can tackle digital transformation challenges in 2025
WHILE often associated with global tech giants, the “digital economy” is also gaining strong traction in the Philippines. The sector expanded to P2.25 trillion in the past year, equivalent to 8.5 percent of GDP and a 7.6 percent increase from 2023.
It now employs 11.3 million people, or nearly a quarter of the national workforce, underscoring digital transformation’s role in the country’s economic resilience and future growth.
And this is just the beginning. Projections estimate that the Philippine digital economy could reach $150 billion by 2030, putting businesses under pressure to accelerate their transformation journeys. But success in this new digital landscape will require more than just adopting new tools — it will demand a clear strategy, future-ready skills, and an organization-wide shift in mindset.
Digital efforts must align with business strategy
According to PwC, 46 percent of Philippine CEOs believe their companies will no longer be viable over the next decade if they stay on their current path. Those who acknowledge this are already taking action — diversifying revenue streams, investing in automation and artificial intelligence (AI), and upskilling their workforce.
Among the emerging technologies reshaping strategy, it’s generative AI that CEOs view as particularly transformative. Already in use by 40 percent of companies, 71 percent of CEOs are confident it will fundamentally change the way they create and deliver value.
But transformation for its own sake rarely delivers impact. Technology adoption must be anchored in business goals — whether reducing costs, improving efficiency, or driving growth. Without that alignment, digital investments often fall flat.
Harvard Business Review reports that nearly 70 percent of digital transformation initiatives fail to deliver meaningful outcomes. That’s why strategy cannot be an afterthought. Don’t start with “We need AI.” Start with “What do we want to achieve?”
Close the digital skills gap
As AI adoption accelerates, the demand for talent is rising just as fast. The faster the technology evolves, the greater the pressure on organizations to upskill their people.
According to the World Economic Forum (WEF), 67 percent of organizations in the Philippines have identified skills shortages in the labor market as a major obstacle to digital transformation. By 2030, nearly seven in 10 Filipino workers will need retraining to stay relevant — but only 38 percent have received training so far, which is well below the global average of 50 percent.
Low-code/no-code (LCNC) platforms offer a direct, scalable way to close this gap. These tools empower nontechnical professionals — such as those in operations, finance, HR, and customer service — to build apps, automate workflows, and digitize processes with little to no coding. They put digital tools in the hands of those closest to the problem, enabling faster outcomes, better alignment, and greater agility across the organization.
By empowering business users to grow their digital skills and freeing up IT teams from routine development tasks, organizations build broader and deeper capabilities across the workforce.
But companies don’t have to go it alone. National efforts such as the Philippine Digital Workforce Competitiveness Act, combined with stronger partnerships with educational institutions and strategic hiring, can go a long way in accelerating talent development and closing the digital skills gap.
When culture leads, tech follows
Change is never easy, but if companies want meaningful digital transformation, it must begin with a cultural shift and a company-wide mindset change. The shift starts at the top. If the leadership team isn’t on board, the rest of the organization won’t be either.
Want employees to embrace digital transformation? Empower them. Citizen development is one of the fastest ways to gain buy-in. It fosters stronger collaboration between IT and business teams, leading to faster rollouts, more responsive updates, and more strategic use of resources.
Most importantly, involving those closest to the problem in building the solution ensures alignment with real business needs. It also gives them a sense of ownership that makes digital adoption far more effective and sustainable.
Where PH innovation goes next
Given all these advantages, it’s no surprise that low-code and no-code platforms are fast becoming essential tools for accelerating digital transformation.
But technology alone isn’t enough. Only those who are prepared to address and solve the deep-rooted issues within their organizations will rise from being local players to digital market leaders across borders.
The real winners in the digital economy won’t be those who merely chase trends. They’ll be the ones who innovate with purpose, invest in their people, and cultivate a culture that thrives on change.
Dinesh Varadharajan is the chief product officer at Kissflow, a cloud-based digital transformation platform designed to help organizations automate workflows, manage projects, and build custom business applications — often without needing extensive coding knowledge.