With 10% drop in piracy, RP economy to gain P19.2 billion

MANILA, Philippines - The Philippines stands to benefit big from reducing software piracy.

The recently concluded Piracy Impact Study conducted by the Business Software Alliance (BSA) and market research and forecasting firm International Data Corp. (IDC), showed that by reducing the country’s software piracy by only 10 percentage points, the economy stands to gain some P19.2 billion ($436 million) in income.

Moreover, it would be able to generate some 1,000 jobs for Filipinos by 2013 and would contribute around P1.7 billion to the government in the form of new taxes.

Even with the economic benefits as incentive, the fact remains that the software piracy rate for personal computers in the Philippines has been steady at 69 percent in the last three years. It only dropped significantly by two percentage points from 71 to 69 percent in 2007 but has never moved down again. Losses, however, continue to pile up from $147 million to $217 million.

Roland Chan, BSA senior director of marketing for the Asia-Pacific, said fighting piracy would mean greater economic benefits not just for the software industry but also for the entire nation.

“Because IT distribution and services are local and specific to each economy, much of the revenue generated through reductions in software piracy would be captured at the local level,” affirmed Victor Lim, IDC vice president for Asia-Pacific consulting operations.

The piracy impact study added that all forms of software theft  valued globally at more than $51 billion in 2009  is not typically mentioned among the many factors inhibiting economic growth.

Globally, IDC estimates that the piracy rate for PC software last year was 43 percent, slightly lower than the 69 percent piracy rate in the Philippines.

“This means that more than four out of 10 software applications installed on PCs were unlicensed. The commercial value of all that unlicensed software totaled more than $51 billion,” the study said.

“In the 42 countries covered in this study, the figure came to $45 billion  enough to pay for all the computers shipped to China, India and Brazil in 2009,” it added.

BSA and IDC believe that reducing the piracy rate by 10 percentage points is attainable, citing the experiences of Russia, whose piracy rate fell 10 points between 2005 and 2007; China, which successfully curbed its own piracy rate by 10 points between 2003 and 2006; and Qatar, which managed a nine-point drop in piracy between 2005 and 2008.

Going back to the Philippine software piracy statistics, the BSA-IDC study estimates that reducing the piracy rate from 69 to 59 percent in only two to four years would generate over 1,000 additional jobs, contribute $436 million more to the Gross Domestic Product (GDP) and some $39 million in new taxes to the government.

Meanwhile, reducing the piracy rate at the same percentage points in over four years, would mean slightly lower gains of $329 million for the GDP and $30 million in new taxes, but still significant nevertheless.

BSA has been actively campaigning for the reduction software theft and has been conducting a software piracy impact study with IDC since 2003.

Over the years it has been saying the same thing: promote education about the value of intellectual property (IP), implement the World Intellectual Property Organization’s Copyright Treaty to create an effective legislative environment for copyright protection, online and offline, and dedicate resources for enforcement of IP laws, including specialized IP enforcement units, and improved cross-border cooperation among law enforcement agencies.

The speed with which these efforts are taken seriously would determine how fast the economic gains could be realized, as illustrated by the study.

Uncurbed piracy could take away the much-needed growth in the economy  or your next job.