TL;DR: The Philippines is ramping up its digital assets and digitalization agenda, from stricter oversight of payment operators and VASPs to a 34.4 billion artificial intelligence (AI) infrastructure plan and deeper ASEAN digital integration. Additionally, the national government is also seeking PHP 53.1 billion ($848 million) for the ICT and digitalization budget in 2027.
The Philippines central bank freezes payment-system operator registrations
On September 7, the Philippines’ central bank—the Bangko Sentral ng Pilipinas (BSP)—has proposed halting new payment-system operator registrations for a year while imposing stricter controls on payment arrangements involving virtual asset service providers (VASPs).
According to a draft circular, the BSP plans to temporarily suspend acceptance and processing of applications for operators of payment systems (OPS) to “holistically” review its taxonomy and licensing framework.
“The acceptance and processing of applications for OPS registration shall be suspended for a period of twelve (12) months from the effectivity of this Circular. The suspension is being imposed to facilitate the BSP’s holistic review of the OPS taxonomy and licensing framework, including the attendant risk management and regulatory considerations,” the draft circular read.
Applications before the suspension would still be evaluated, but the BSP would not approve or deny any requests until the freeze ends. Companies are not permitted to commence activities requiring OPS registration unless the BSP authorizes them.
Under the newly proposed rules, BSP-supervised institutions that provide merchant acquisition services must enter into direct arrangements with regulated VASPs. According to the central bank, these relationships would be subject to proper due diligence and monitoring, transaction and settlement limits, and other risk-based controls.
The draft rules apply only to VASPs that are required to obtain a license, registration, or authorization from the BSP, the country’s Securities and Exchange Commission (SEC), or other relevant regulator. VASPs would be treated similarly to other high-risk businesses, such as gambling and gaming operators, adult-oriented businesses, and money service providers.
At the time of writing, the BSP is inviting stakeholders to submit comments on the proposal. Once approved, the draft circular would take effect 15 days after publication.
Philippines unveils $34 billion roadmap for ASEAN AI hub
In another development, the national government launched the final draft of the Philippines AI+ Infrastructure Masterplan (PAIIM) 2026 – 2033, a $34.4 billion roadmap that aims to position the Southeast Asian nation as a regional hub for artificial intelligence (AI) infrastructure, the Philippines News Agency reported.
PAIIM was introduced earlier this year, but the master plan for the roadmap was presented only on September 8 at an event at the Crowne Plaza Manila Galleria in Quezon City. Of the total $34.4 billion investment, $13.5 billion, or 39%, will come from public funds, while $21 billion, or 61%, is expected to come from private investors.
By 2033, the AI initiative is expected to generate over 500,000 AI-related jobs and an additional 175,000 jobs from AI infrastructure projects, while raising the Philippines’ GDP to 10-12% through AI-driven productivity gains.
In addition, the master plan includes reskilling programs targeting 1.3 million individuals in the country’s Information Technology and Business Process Management (IT-BPM) sector for AI services, together with the establishment of a fully operational national AI governance and data framework by the end of the planning period.
The Department of Information and Communications Technology‘s National ICT Planning, Policy and Standards Bureau Officer-in-Charge Gemma Baysic said that the country aims “to build, host, power, and support the AI ecosystem of the future.”
One of the action points of the master plan is to expand the country’s AI data center capacity 30-fold, from a baseline of 50 megawatts (MW) to 1.5 gigawatts (GW) by 2033, having an initial deployment of around 400 MW that is planned to be completed by 2030 during the roadmap’s first phase.
According to the Department of Energy’s (DOE) Undersecretary Maria Francesca Del Rosario, the Philippines is expected to power about 152,000 graphics processing units (GPUs) for the planned AI project. However, she clarified that the DOE will be responsible for generating this power, clearing out speculations that the electricity will be drawn from Filipino households.
Del Rosario also noted that natural gas plants will meet immediate electricity needs, as they aim to source 40% of total power for AI infrastructure from renewable energy sources such as solar and geothermal by 2033. The DOE is also probing the use of nuclear power as a long-term option under the Republic Act 12305, or the Philippine National Nuclear Energy Safety Act (PhilAtom Act).
Baysic explained that the development of AI infrastructure will support six pillars, namely: Connectivity infrastructure; AI compute and data centers; sustainable energy and water sourcing; AI workforce development; policy and regulation; and demand creation and adoption.
She also identified four areas where the country’s AI industry will be developed, such as the Clark-Bataan acting as the primary anchor; the Batangas-Aurora corridor, which would act as a strategic gateway; the Subic and CALABARZON corridor as supporting hubs; and the Cebu, Iloilo, Davao, and Cagayan de Oro as future regional nodes.
The AI master plan highlighted the Philippines’ advantageous geographic position, its robust network of 21 submarine cables, over 95% mobile coverage, and its 1.3 million IT-BPM workforce as significant factors enhancing its appeal for AI infrastructure investments. It also noted that there is currently only one AI-focused data center in the country, with an operational capacity of around 50 MW.
DEFA to connect ASEAN economies via digital trade
More recently, Trade and Industry Secretary Ma. Cristina Roque shared the ASEAN Digital Economy Framework Agreement (DEFA) at the second ASEAN Business Media Exchange on September 7 at One Ayala in Makati.
She revealed that the DEFA will help connect ASEAN region’s economies by strengthening cooperation in e-commerce, digital trade, payments, and cybersecurity.
“Our main deliverable for our ASEAN Chairship, which is the first in the world, will be the Digital Economy Framework Agreement (DEFA),” Roque said. “This is the biggest deal actually in ASEAN for trade. This will connect now all ASEAN countries in the e-commerce platform, also for cyber security, for digital trade, for payments, and also to make sure that we get information through digital space.”
Roque said that the successful implementation of DEFA will help ASEAN’s digital economy, with studies indicating it could reach up to $2 trillion by 2030.
In May, ASEAN member states concluded negotiations on DEFA, making it the bloc’s first region-wide digital economy deal aimed at advancing a digital integrated, secure, interoperable, competitive, and inclusive regional economy.
The Department of Trade and Industry (DTI) will lead the digital transformation, with DEFA facilitating digital commerce and cooperating in e-commerce, electronic payments, cybersecurity, and data governance.
National government proposes digitalization budget for 2027
One of the latest developments in the Philippines’ digital ecosystem is the proposed 2027 national budget of PHP 53.1 billion ($846 million) for ICT and digitalization expenditures.
Under the 2027 National Expenditure Program (NEP), the Marcos administration said it is targeting 38,829 active free public internet access points nationwide—an increase of nearly 69% from the 2026 goal of 22,916.
In a statement on September 9, the Department of Budget and Management (DBM) expressed that the expansion is anchored on the PHP 5 billion ($79 million) Free Public Internet Access Program, which retains this year’s funding level under the 2026 General Appropriations Act (GAA), while also targeting a much higher number of active access points in 2027.
Apart from that, the number of public locations targeted for the approach will increase from 13,671 to 14,969, while localities are expected to have connectivity.
“By expanding reliable connectivity, we bring essential government services, education, healthcare, and economic opportunities closer, regardless of location,” said President Ferdinand “Bongbong” Marcos Jr. in his 2027 budget message to Congress.
Another scope of the 2027 budget is to accelerate the digitalization of government services. Funding for the eGovernment Program is proposed to more than double, from PHP 1.49 billion ($23 million) in 2026 GAA to PHP 3.23 billion ($51 million) in 2027. In addition, PHP 950 million ($15 million) will be allocated for the National Government Data Center Infrastructure, 27% higher than this year’s PHP 748 million ($11 million) budget.
These investments are said to improve the interoperability and integration of government information systems through platforms like eGovPH—the country’s official app for local and national public services.
As for the National Government Portal—the country’s one-stop digital platform—the proposed budget is PHP 312 million ($4 million), up from PHP 292 million ($4 million) in 2026. Funding for the National Broadband Program will also increase by 69.3% to PHP 1.1 billion ($17 million) in 2027 from PHP 667 million ($10 million) this year. Meanwhile, the Philippine Digital Infrastructure Project will be receiving PHP 2.16 billion ($34 million).
“An efficient government begins with reliable digital infrastructure and data-driven decision-making. To advance our digital transformation agenda, we are providing PHP5 billion for the Free Public Internet Access Program, expanding connectivity to nearly 40,000 access points nationwide enabling more Filipinos to access government services, education, and economic opportunities,” DBM Acting Secretary Kim Robert de Leon said.
The DICT will receive PHP 14.4 billion ($229 million) in ICT-related expenditures, the largest share among national government agencies in the PHP 53.1 billion ($847 million) budget. About PHP 722 million ($11 million) will go to the department’s ICT Capacity and Industry Ecosystem Development and Management Program, PHP 143 million ($2 million) will support the ICT Workforce Upskilling and Reskilling Program, and PHP 193 million ($3 million) will go to the Digital Transformation Centers.
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