ASEAN digital economy deal seen lowering business costs

BUSINESSES are expected to enjoy lower costs and smoother cross-border digital trade within five years at the earliest as the Association of Southeast Asian Nations (ASEAN) prepares for the signing of the Digital Economy Framework Agreement (DEFA) this year, the Philippine Chamber of Commerce and Industry said. 

In a policy brief, the chamber said that although no immediate changes, particularly in Philippine laws, are expected, regulatory alignment and cooperation can begin to take shape in the first three years.

“Bigger benefits such as lower compliance costs and smoother cross-border digital trade are expected over five to 10 years,” it added.

Once signed, the DEFA will set common rules for e-commerce, digital trade, data flows, cybersecurity, digital payments, emerging technologies, and movement of digital talent.

“The stakes are enormous. ASEAN’s digital economy is already on track to reach about $1 trillion by 2030. With DEFA in place, that number could double,” it said.

“For the Philippines — one of the fastest-growing digital economies in the region — this represents a historic opportunity to scale up exporters, attract investment, and position Filipino workers at the center of regional digital value chains,” it added.

The benefits of the agreement include lower compliance costs, more predictable rules, and easier access to customers across the region.

“For micro, small and medium enterprises (MSMEs), it could reduce the uncertainty that often discourages small firms from selling abroad,” it said.

“For the information technology and business process management and digital services sector, DEFA could support trusted data flows, regional recognition of skills, and new demand for high-value services,” it added.

However, the group said that the DEFA is no substitute for domestic reform, which presents the need for the country’s continued investment in broadband, digital skills, logistics, MSME financing, and competition policy.

“The agreement opens doors, but we still need to help Philippine firms and workers walk through them,” it said.

“DEFA positions ASEAN and the Philippines as a serious trade bloc. For Philippine firms, it means more customers, more opportunities, and a clearer path to compete regionally in the digital economy,” it added. — Justine Irish D. Tabile