By Beatriz Marie D. Cruz, Reporter
THE PHILIPPINES improved five spots in the World Digital Competitiveness Ranking by the International Institute for Management Development (IMD), but remained a laggard in the Asia-Pacific region.
The country ranked 56th out of 69 economies, with an overall score of 50.87 (out of 100), in the 2025 World Digital Competitiveness Ranking of the IMD World Competitiveness Center.
This was an improvement from last year when the Philippines ranked 61st, its worst ranking since the report was launched in 2017.
Among 14 Asia-Pacific economies, the country ranked 13th, ahead only of Mongolia (67th).
Switzerland ranked first in the global digital competitiveness index with a score of 100, followed by the United States (99.29), Singapore, (99.18), Hong Kong (97.79), and Denmark (97.23).
The ranking measures a country’s readiness to adopt and explore digital technologies to transform government practices, business models, and society overall.
The index measures a country’s capacity based on three key factors: knowledge or the quality of human capital, excellence of technological infrastructure, and future readiness.
The Philippines ranked 65th in the knowledge factor, 52nd in future readiness and 54th in technology.
According to IMD, the country showed weakness in the ease of starting a business (66th), enforcing contracts (66th), communications technology (66th), and secure internet servers (63rd).
However, the Philippines ranked high in investments in high-tech exports (3rd) and telecommunications (9th).
The country also slipped one spot in the knowledge factor, amid low rankings in talent (56th), training & education (62nd) and scientific concentration (63rd).
According to IMD, the Philippines inched up by two spots in the technology factor, ranking 46th in capital and 47th in technological framework. However, it ranked 67th for regulatory framework.
For future readiness, IMD said the country improved by six spots due to its performance in adaptive attitudes (40th), business agility (50th), and IT integration (57th).
IMD noted that the Philippines’ business process outsourcing (BPO) sector, which serves foreign clients across North America, Europe and Asia, is vulnerable to trade barriers.
“Trade-related barriers (e.g., remote work taxes, licensing hurdles, and data flow restrictions) make it harder or firms to maintain contracts and retain talent, especially in smaller BPO centers with limited shock absorption capacity,” according to the report.
Globally, countries’ digital competitiveness is challenged by increased volatility in trade relations, IMD said.
It also cited the growing difference among countries and regions on how they regulate, develop, and adopt technologies.
“Trade conflicts were once thought to be confined to disputes over tariffs or quotas, but are now clearly extending deep into the intangible roots of the digital economy: intellectual property, data flows, technical standards, and strategic technologies,” José Caballero, a senior economist at the IMD World Competitiveness Center, said.
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the Philippines’ low ranking in the digital competitiveness index highlights the need to address structural bottlenecks like digital infrastructure quality, broadband affordability, and skill readiness.
“While connectivity has improved, it remains uneven and costly outside major cities. Moreover, the shortage of highly skilled digital talent and slow technology adoption among micro, small, and medium enterprises limit how fast digital transformation spreads across the economy,” he said in a Viber message.
Higher production costs and slow trade activity could delay technology upgrading and job creation among high-value sectors, Mr. Rivera added.
“To stay competitive, the Philippines must double down on digital infrastructure investment, talent development, and innovation incentives, while pursuing trade diversification and stronger regional digital partnerships to cushion external shocks,” he added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the growth in online transactions and digital payment systems provide an opportunity to boost the country’s digital competitiveness.
The IMD report was published in partnership with IMD’s local partner institute, Asian Institute of Management’s Rizalino S. Navarro Policy Center for Competitiveness.