The Philippines faces a critical dilemma over how to protect its data sovereignty and national security without isolating its economy, as the country accelerates its digital transformation under President Ferdinand Marcos Jr.’s “connected Philippines” vision.
The nation’s heavy reliance on foreign-controlled cloud services for everything from public services to private transactions has raised serious concerns about external control and cyber exposure.
This reliance on foreign hosting creates substantial risks. Cybersecurity firm Surfshark reported that over 24 million Filipino accounts were compromised in 2024, placing the country sixth in Asia for cyber incidents.
A highly publicized ransomware attack on state-run insurer PhilHealth demonstrated how weak data governance can directly harm citizens. While foreign hyperscale providers offer sophisticated safeguards, industry groups have warned that imposing strict data localization rules could increase costs for small and medium-sized enterprises (SMEs) and the IT-business process management (IT-BPM) sector, potentially deterring investment.
The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, believes the solution lies in “smart, enabling policies” rather than blunt restrictions.
“The evolving debate on data sovereignty presents a unique opportunity as the Philippines accelerates its digital transformation journey,” said PCCI director Benedicta Du-Baladad.
“We can strike a balance by embracing innovative solutions that prioritize security while still enabling growth,” said Du-Baladad.
PCCI is a key proponent of several legislative measures aimed at building a robust digital ecosystem, including the Open Access in Data Transmission Bill (Konektadong Pinoy Act) to expand connectivity and a Cybersecurity Act to deter online threats.
The group also supports the E-Governance Act and a proposed Artificial Intelligence Act to ensure ethical and secure data use.
Beyond policy, the PCCI urges collaboration, working with the Department of Information and Communications Technology (DICT) and the Department of Trade and Industry (DTI) on a unified digital roadmap that includes a National AI Framework.
The PCCI, through its Human Resources Development Foundation, has also teamed up with the Asia Foundation, Cyber Peace Institute and the Global Cyber Alliance to offer cyber hygiene training for MSMEs, civil society organizations and non-governmental organizations (NGOs).
“The path forward requires a balance of responsibilities: the government must establish clear guardrails, businesses must drive innovation, and citizens need assurance that their data is protected,” the PCCI said.
The national discussion on the country’s digital future is set to continue at the 51st Philippine Business Conference and Expo (PBC&E), scheduled on Oct. 20 to 21, 2025, at the SMX Convention Center Manila.
The event will focus on data sovereignty, security, and innovation, with policy forums featuring government agencies and industry leaders, including Converge, Huawei, Google and Microsoft.
