Let’s double down on digital!

Filipinos deserve better, cheaper, faster and far more accessible internet services. However, intensified investment is needed for Philippine internet infrastructure. Investing in addressing the digital divide would undoubtedly pay generous dividends not only in terms of business but, more importantly, in making daily life better for Filipinos.

Just to highlight how important this topic is. I’m writing about this while preparing for the Digital and Intelligent Asia-Pacific Congress 2024 in Bangkok, Thailand. Here, I’ll be delivering a keynote speech on how internet service providers could help address the Digital Divide. I hope to entice more business and political interest in developing our digital economy.

Why is it so important to look at the digital economy of the Philippines?

In 2022, the digital economy contributed P2.08 trillion or a considerable 9.4 percent of the Philippines’ Gross Domestic Product (GDP). It is projected to contribute about P5 trillion annually by 2030. However, Philippine Statistics Authority (PSA) data in 2020 indicated that the only market segment with 30 percent of households with fixed wired broadband was the National Capital Region, while the rest of the country stood at less than 10 percent. Our own National Economic and Development Authority (NEDA) has highlighted our disconcerting high internet cost through fixed broadband with a mere 5 GB data package costing about 11.6 percent of gross national income (GNI) per capita. In comparison, China is a mere 0.5 percent, Singapore 0.8 percent and both Vietnam and Thailand at 3.5 percent. With raging inflation particularly with rice and unmoving wages, NEDA has noted “fixed broadband is out of reach for many, particularly those in the lower income brackets.”

Even in the case of the mobile broadband, being relatively better in terms of accessibility and affordability with a 2 GB mobile broadband package at 2 percent of GNI per capita, the Philippines lags behind our regional neighbors. The World Bank has noted that poor internet services leads to “weak and uneven technology adoption” across industries, which in turn limits productivity, efficiency, competitiveness and innovation.

Senator Grace Poe directly contributed to making our Philippine economic landscape more favorable to foreign investments in ICT through Republic Act 11659 or the Amended Public Service Act (Amended PSA). It has been credited as an essential element for the business operations of Elon Musk’s Space X’s Starlink in the Philippines, and in bringing reliable internet service to underserved areas throughout the country, including Pag-asa Island.

Our office is also the first to say that we cannot rest on our laurels just yet, even with the Amended PSA. Hence, we reiterate Senator Grace Poe’s longstanding call for the immediate passage of Senate Bill No. 864 filed on July 25, 2022 or the “Open Access in Internet Services Act” (OAISA). It is engineered as a game-changer for the entire telecommunications industry, benefitting competitors and consumers alike. It is high time for an expedited administrative process for the qualification and registration of internet service providers (ISPs), incentives for infrastructure sharing, enforceable rights of Filipinos using the internet and a new legal framework empowering the government to usher in a truly reformed internet services sector. ISP infrastructure sharing, for instance, has been associated as an important component of the policy paradigm of South Korea, which boasts one of the most advanced and widespread internet services in the world.

Further, we must confront the truth of our country’s terrible under-investment in broadband infrastructure compared to the rest of the world for the last decade. For the last 15 years, about 100 developing countries invested approximately one percent of their gross domestic product in telecom infrastructure for at least a year. The Philippines, in comparison, has never made the same investment.

The National Fiber Backbone (NFB) Project, in this regard, is a significant stride in doubling down on digital. Last April 19, 2024, President Marcos Jr. and Department of Information and Communications Technology (DICT) Secretary Uy led the grand launch of NFB’s Phase 1. It’s a government-owned fiber cable network that is expected to reach about 28,000 kilometers and to greatly enhance public infrastructure for internet connectivity. Phase 1, spanning the first 1,245 km, would run from Laoag, Ilocos Norte to Roces, Quezon City, connecting 14 provinces including four ecozones and two national government data centers. With four more phases in the pipeline, the DICT hopes it will bolster Philippine household fixed broadband penetration rate from the current 33 percent (which NEDA has transparently labeled as “alarmingly low,” particularly compared to our regional peers) to 65 percent by 2026. Moreover, it is claimed that this infrastructure would allow 346 national and local government offices connected to GovNet to heighten operational efficiency, saving taxpayers an estimated P145 million annually. NFB is consistent with President Marcos Jr.’s marching orders to build a “Digital Philippines” as an integral part of his administration’s “Bagong Pilipinas.”

Apart from the Amended PSA, OAISA and the NFB, the Philippines must pursue more comprehensive sustainable action that capacitates our citizens in ICT. United Nations data discloses that Filipinos are the least skilled in ICT in our region, with only two percent of Filipino youth and adults able to use basic arithmetic formulas, only six percent able to copy and paste, and seven percent able to attach a file to an email. Our educational curriculum needs stronger focus on ICT. The Department of Education’s Digital Rise Program and the Technical Education and Skills Development Authority’s free online technical and vocational education and training courses are good beginnings.

Ultimately, a Digital Philippines should not only be a far-off dream but a present reality that we should be working on. It’s no longer a nicety but a necessity. Let’s double down on digital!