Navigating digital transformation and geopolitical rivalry

The Philippines is pursuing digital transformation to drive economic growth, with its digital economy contributing 8.5% to GDP in 2024. However, the country lags behind ASEAN peers in infrastructure and digital literacy. This gap has been filled largely by Chinese investments via the Digital Silk Road, with companies like Huawei, Alibaba, and Tencent dominating sectors such as telecommunications, cloud computing, and fintech. While these investments provide essential capacity, they create security risks and sovereignty concerns, exacerbated by territorial disputes in the South China Sea. The paper recommends that the Philippines update its regulatory frameworks, adopt ASEAN-centric ICT norms, and pursue 'friendshoring' with allies like the US and Japan to reduce dependence on Chinese technology.

• The Philippines' digital infrastructure and readiness consistently lag behind its Southeast Asian neighbors, specifically Indonesia, Thailand, Malaysia, and Singapore.
• China's Digital Silk Road (DSR) has established a significant presence in the Philippines through investments in telecommunications, subsea cables, data centers, and financial technology.
• Chinese technology firms hold dominant positions in critical Philippine digital sectors: Huawei provides hardware for major telecoms, Alibaba Cloud services over 200 domestic companies, and Tencent powers the PayMaya e-wallet.
• Huawei has expanded its influence through informal technology transfers and outreach, including partnerships with 11 universities for training and ICT equipment as of 2020.
• The Philippines faces a strategic trade-off between the economic benefits of Chinese digital investments and security concerns driven by the South China Sea territorial dispute and a general public distrust of China.
• The Philippine security sector maintains a cautious 'Trust but verify' approach toward Chinese technology, particularly since 90% of the country's technologies are imported.
• To maintain strategic autonomy, the authors recommend 'friendshoring' by sourcing technology from allies such as the US, Japan, and Australia to insulate the country from political shocks from Beijing.

APA

Baladjay, D. M. N., III, J. S. A., & Carrozza, I. (2025). Navigating digital transformation and geopolitical rivalry. Peace Research Institute Oslo. https://cdn.cloud.prio.org/files/ed6267f1-fea4-48bc-ad0f-935963c00c9e/Amador III et al Navigating digital transformation - PRIO Paper 2025.pdf?inline=true

Chicago

Baladjay, Deryk Matthew N., Julio S. Amador III, and Ilaria Carrozza. Navigating digital transformation and geopolitical rivalry. Peace Research Institute Oslo, 2025. https://cdn.cloud.prio.org/files/ed6267f1-fea4-48bc-ad0f-935963c00c9e/Amador III et al Navigating digital transformation - PRIO Paper 2025.pdf?inline=true.

Wikipedia

{{cite report |last1=Baladjay |first1=Deryk Matthew N. |last2=III |first2=Julio S. Amador |last3=Carrozza |first3=Ilaria |title=Navigating digital transformation and geopolitical rivalry |publisher=Peace Research Institute Oslo |date=2025 |url=https://cdn.cloud.prio.org/files/ed6267f1-fea4-48bc-ad0f-935963c00c9e/Amador III et al Navigating digital transformation - PRIO Paper 2025.pdf?inline=true |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{baladjay2025navigating, author = {Baladjay, Deryk Matthew N. and III, Julio S. Amador and Carrozza, Ilaria}, title = {{Navigating digital transformation and geopolitical rivalry}}, institution = {Peace Research Institute Oslo}, year = {2025}, url = {https://cdn.cloud.prio.org/files/ed6267f1-fea4-48bc-ad0f-935963c00c9e/Amador III et al Navigating digital transformation - PRIO Paper 2025.pdf?inline=true}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }