Group ‘alarmed’ at decline of PH competitiveness due to poor ICT adoption

An ICT group, the Better Broadband Alliance (BBA), has sounded the alarm button over the declining competitiveness ranking of the Philippines due to inept policies and lackluster use of ICT in the country.   

In a statement issued on Monday, Oct. 28, the BBA said it is saddened by the significant drop in the global competitiveness ranking of the Philippines in the World Economic Forum’s latest report, which now ranks the country on 64th out of the 141economies surveyed, from 56th place last year.

“This means the nation fell short in terms of measures that will create an enabling environment, improve human capital, increase productivity of markets, and support an innovation ecosystem that will enable wealth-generation for its citizens,” it said.

The BBA said it is particularly alarmed that the decline in the country’s competitiveness is mainly caused by its poor ranking in “ICT adoption,” measured by the population’s subscription to mobile cellular, fixed and mobile broadband services, and the percentage of Internet users vis-à-vis the total population.

Under the ICT adoption pillar, the Philippines ranked 88th and garnered a score of 50, about 20 points lower than the average in East Asia and the Pacific and lagging behind ASEAN peers like Cambodia, Indonesia, Malaysia, Thailand, and Vietnam.

The group stressed that studies have shown how Internet penetration and adoption impact a country’s economic development. A 2009 World Bank report revealed that increasing broadband penetration by 10% results in a 1.38% increase in GDP in developing economies between 2000 and 2006.

In the Philippines, the contribution of mobile broadband adoption can be as much as 0.61% of GDP, according to a 2012 study funded by the ITU and the Broadband Commission.

Internet speed also affects people’s ability to generate wealth, the BBA said. A 2013 Ericsson study found that introducing a 0.5-Mbps broadband connection can increase household income by as much as $800 per year in less developed countries.

“Thus, the cost to the Philippine economy of poor Internet access and slow Internet speed can be enormous. The main culprit: using analog policy in the digital age,” the group said.

According to a Google-funded study by the BBA and The Asia Foundation, the Philippines’ policy and regulatory framework is stuck in the landline era.

“Outdated policies have resulted in 50 million Filipinos still offline; fixed and mobile broadband connections among the slowest in the world; and broadband services that remain unaffordable to a large segment of society, especially those living in the rural areas,” it noted.

To address this, the BBA urged Congress to pass laws that will update policies and promote digital connectivity. In particular, the BBA said it strongly supports the “Open Access in Data Transmission” bill, which is critical to establishing a forward-looking and future-ready digital policy framework for the Philippines.

The bill aims to create the space for different types of service providers to build and operate data networks. It proposes a simplified registration and qualification process in order to attract more players to invest in much-need data transmission infrastructure.

The bill also encourages infrastructure sharing to make network deployment faster and more cost-efficient, promotes transparency in spectrum management, and mandates interconnection among operators.

“Digital connectivity, anchored on reliable, secure, and affordable broadband services, is the foundation of a country’s digital transformation. In return, key government and private sector initiatives, such as e-commerce, e-health, e-learning, and e-government initiatives, including the recently approved national ID system, are expected to provide a strong demand pull that will drive broadband penetration and ICT adoption,” the alliance said.

“The proposed Open Access in Data Transmission Act will provide the digital connectivity policy framework that will not only bring the country to the digital age but also improve overall competitiveness,” it added.

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