Anticipating the ASEAN Digital Economy Framework Agreement (DEFA)

The ASEAN Digital Economy Framework Agreement (DEFA) is set to become the world’s first region-wide and binding agreement dedicated to digital economy governance. This landmark initiative seeks to position ASEAN as a global leader in the digital economy by promoting deeper digital integration, cooperation, and inclusive economic growth across the region.

As a member state with rapidly advancing digital legislation and infrastructure, the Philippines is uniquely positioned to influence and contribute meaningfully to the shaping and implementation of the DEFA. Recent national reforms aligned with ASEAN’s digital objectives underscore the country’s growing strategic importance in the regional digital landscape.

This white paper synthesizes the key perspectives and actionable insights gained from an inclusive multi-stakeholder dialogue, bringing together representatives from government, civil society, and the private sector. Through active engagement, this process not only highlighted diverse viewpoints but also fostered collaborative, solution-oriented recommendations to address the anticipated challenges and opportunities presented by the upcoming ASEAN Digital Economy Framework Agreement, ensuring a comprehensive and forward-looking understanding of its potential regional impact.

The engagement process combined expert inputs with group discussions around four key themes of the DEFA:

1. Digital Trade & Cross-Border E-Commerce Competition Policy Payments, and E-Invoicing;
2. Cross-Border Data Flows and Data Protection;
3. Online Safety and Cybersecurity; and
4. Emerging Issues in Technologies, Ethical Governance, and Countering Malign Influence.

A series of expert panel discussions introduced the four thematic areas, provided contextual insights, addressed questions, and established a common foundation for participants. Next, four breakout rooms explored each thematic area. Breakout participants identified challenges, outlined key priorities, explored opportunities, and shared recommendations. A representative from each breakout room synthesized and presented the session’s key insights and discussion points to the plenary.

Key Challenges Identified

1. Cost and Accessibility of Digital Infrastructure and Technologies – High cost and limited access to digital infrastructure and technological tools hinder equitable access and adoption.
2. Policy and Regulatory Gaps – Fragmented or outdated policies and regulations obstruct effective governance, innovation, and security within digital services.
3. Lack of Trust in Digital Transactions – Concerns regarding data privacy, security, and transparency diminish user confidence in engaging with digital platforms, especially smaller players.
4. Digital Skills and Awareness Gap – Insufficient digital literacy and inadequate awareness of available tools and services restrict meaningful participation in the digital economy.

Key Priorities Identified

1. Secure and Accessible Digital Infrastructure – Ensure reliable, affordable, and resilient digital networks and systems for all stakeholders in the country.
2. Support for Local Innovators and Micro, Small, and Medium Enterprises (MSMEs) – Promote and support the growth and competitiveness of MSMEs and homegrown innovators.
3. Upskilling of Businesses and Consumers – Enhance digital literacy, technical capabilities, and awareness to enable effective participation in the digital economy.
4. Policy Alignment Across Governance Levels – Harmonize policies and regulations from regional authorities to local government units to ensure consistency, efficiency, and efficacy.
5. Regional Learning and Knowledge Exchange – Facilitate sharing of best practices, experiences, and innovative approaches to strengthen regional collaboration.

Key Opportunities and Recommendations

1. Leverage Existing Policies and Government Programs – Effectively utilize current Philippine policies and initiatives from various government agencies to strengthen digital economy strategies and implementation.
2. Leverage Local Government Units (LGU)’s – Leverage LGUs’ direct-to-constituent connection to ensure equitable and relevant deployment of development programs and support. LGUs may also enact their own ordinances in the absence of a national policy.
3. Harness Civil Society Expertise – Build on-the-ground experience of civil society organizations in capacity-building activities to enhance outreach and impact.
4. Collaborate with Academia and Industry for Technology Development – Engage academic institutions and industry partners to facilitate knowledge exchange, innovation, and adoption of emerging technologies.

The Five Pillars of the Digital Economy

The findings highlighted five key pillars of the Philippine digital economy:

1. Infrastructure – Secure, Resilient, and Inclusive Digital Infrastructure
2. Skills – Advancing Skills for Workers and Stakeholders
3. Cybersecurity – Strong Cybersecurity and Trust in Digital Transactions
4. Emerging Technology – Responsible Artificial Intelligence (AI) and Democratic Technology Governance
5. Policies – Harmonized Policies, Standards, and Cross-Border Cooperation

By addressing these challenges and leveraging opportunities, the Philippines can accelerate its digital transformation, enhance competitiveness, and ensure that all stakeholders—including MSMEs, local governments, and citizens—benefit from a robust and inclusive digital economy.