Election puts ICT growth of PH hanging in the balance: IDC

Share on facebook
Share on twitter
Share on linkedin
Share on email

ICT PH Despite the government ban on major ICT projects, IDC said ICT vendors and service providers get the opportunity to work on election-related projects and various spending measures. ?But the election also drives end-users, particularly the enterprise sector, to a wait-and-see attitude toward spending, and some are forced to downgrade or altogether scrap any major ICT-related expenditure due to uncertainty,? it noted. Over the past two presidential elections, IDC said it has seen the country’s ICT spending experience differing fates. In 2004, the year Gloria Macapagal-Arroyo won as the president, ICT spending grew by 12%. The following years reached a plateau of 5?7% on ICT spending growth and increased by 15% growth in the next four years. Most government projects were discontinued by Pres. Noynoy Aquino in 2010 as part of various check-and-balance exercise. This resulted in an ICT spending growth of 5% at the end of 2010. After a similar 5?9% growth in the following two years, 2013 observed a 27% growth on the back of government-led projects, fiscal reforms, and anti-corruption measures that led to improvements in the country’s international ratings and rankings. “This year, IDC expect the total ICT spending growth in the country will hover between 8% to10%. Barring any major wildcard events such as natural disasters, a worldwide recession and political revolution, IDC believes that the country’s ICT sector is headed toward a positive ICT outlook at the end of 2016 and beyond,? said Jubert Alberto, country head of IDC Philippines. ?Although there may be short-term uncertainties, the country’s momentum toward ICT adoption is well on its upward track, brought on by the rise of millennials, disruptive technologies, the impact of the business process outsourcing (BPO) industry, demands from small and medium-sized enterprises (SMEs), and the impact of Next-Wave Cities.” However, IDC cautioned that an ICT growth path may be dwarfed by short-sighted and drastic strategies that will be seen only at the immediate six to eight months after the election. Ill-planned strategies, it warned, can make the economy more vulnerable to external shocks, and “rocking the boat” too much with radical policies and questionable methods may result to instability and hit the domestic viability and investor confidence. IDC underscored the following key areas on which the next administration should focus to aid the ICT sector to continue on its upward trajectory: ? Prioritize the establishment of the Department of Information and Communications Technology (DICT). “This move is crucial for the government to ensure the ICT sector, which is among the most profitable divisions of the Philippine economy (projected to contribute $50 billion in revenue in 2016) and one of the top drivers of employment growth, will be secure in the upcoming years. If these stage of priorities are created, the DICT will be the primary government entity to plan, promote, and help develop the country’s ICT sector and address issues concerning Internet connectivity, communications services, data privacy, cybersecurity, and cybercrime ? functions that are currently divided among several disparate agencies,” said Sean Paul Agapito, associate market analyst at IDC Philippines. ? Develop large-scale ICT initiatives. Compared to other Asean countries, the Philippines is still waiting for large-scale initiatives that could greatly impact the ICT market. “However, iGovPhil and MITHI are good ways to start. We need to support the local ICT vendor to gain a strong foothold in the local, regional, and global scenes so that their top-notch IT skills can be recognized. The government should also support ICT adoption in non-IT industries such as resources and agriculture,? said Alon Anthony Rejano, associate market analyst at IDC Philippines. ?A vision of digital agriculture in the long term is needed. Where the farmers can sit at their homes waiting for a message on their smartphones saying their crops can now be harvested. However, this process should be done gradually. The collaboration between the public sector and service providers will be the most important stage right now.” ? Address the country’s connectivity problem on a major scale. The government must impose the new regulations to accelerate the internet connection development in the country. The government with its authority need to penalize telcos who are unable to deliver internet speeds as promised. “In addition, support for the global telco in the Philippine market is also needed to spur competition. This action will ultimately give consumers better services at lower cost. But in the same vein, the government should endeavor to shorten the starting business process in the country and cut red tape surrounding the establishment of telco infrastructures such as cell sites and fiber builds,” Rejano added. ? Take cybersecurity more seriously. The online leakage by hackers of the confidential information of Filipino voter’s highlight how the Philippines is lacking in terms of cybersecurity. This case should be a wake-up alert for the upcoming government to look at this matter in earnest. Digitalization sector become more pervasive to ensure the confidential data that people send online is secure. “The looming threat of cyberattacks could potentially jeopardize the Philippine’s e-government initiatives, such as iGovPhil and MITHI, especially for those who involve the use or submission of confidential data. Moreover, these cyberattacks have negative implications on the country?s suitability as an ICT hub, after the latest string of cyberattacks on the government,” added Agapito. ? Place a bigger focus on the BPO industry in the country. The BPO industry is expected to surpass the gross domestic product (GDP) contribution of OFWs. With the gradual change from traditional voice services to higher-valued services (e.g., knowledge process outsourcing), the government must address the shortage of skilled labor and professionalize the industry. There must be collaboration with education agencies such as the Department of Education (DepEd) and the Commission on Higher Education (CHED) to align the curriculum with the demands and requirements of the IT sector. The expansion of BPOs in the country greatly helps in the “expansion of ICT wealth” through the rise of Next-Wave Cities. These are viable locations in which BPO incumbents have based their operations to supplement Metro Manila-based businesses. ? Provide greater support to Smart City initiatives. In connection with the greater support on BPOs, there is also a need for even greater support from the next administration on Smart City initiatives in the country. Although it’s good to see a number of Smart City initiatives, such as Cauayan City’s electronic government application system (eGAPS), most of the projects in other areas are still stuck at pilot testing stage. “A key roadblock to implementation is budget constraint on the part of the local government. Greater budget should be allocated by the national government in funding Smart City initiatives to help these projects come to fruition,? said Jerome Dominguez, market analyst at IDC Philippines ?Through Smart Cities, the improvement of quality of life and better delivery of government services will be achieved. Healthy collaboration among the local government, solution providers, and other government agencies is also key in driving these projects forward.? ? Drive growth toward the SME sector. People are still waiting for the government initiatives to develop SMEs in the ICT market. The SME ecosystems, including start-ups and microenterprises of developed markets in other Asean country like Singapore, are more solid than the Philippines’ SME sector because the government of Singapore takes a part to support their actions. There should be effective government funding to contribute to the success of our own start-ups, with the new administration crafting a pro-business and start-up-friendly nation. The government should support them by providing a legal certainty, low-tax system, and a readily available workforce. ? Improve peace and order in the country. The next president also needs to work on addressing the peace and order situation in the country. With the continuing unrest in certain parts of Mindanao, the negative perception on the country as a safe haven also persists. Mindanao is a fast-growing region in terms of population (projected to grow faster than the national average) and economy (driven by the booming manufacturing and BPO sectors). Foreign investors are already eyeing Mindanao as their next focus area of investments. ? ICT on the forefront of the agenda. IDC strongly encourages the next administration to bring ICT usage and adoption at the forefront of its operations moving forward. Optimized system performance and digitization of records in the education sector as well as eHealth innovations in the Philippines bolster ICT usage, as local hospitals continue to adopt electronic medical record/electronic health record (EMR/EHR) and mobile health applications. Deep-dive adoption of cloud-based services for various government transactions is essential. “Digital transformation (DX) in the Philippine government does not only improve the delivery of government services but also democratizes the public’s access to national affairs. Greater ICT adoption by the next administration will help the country keep its growth momentum moving forward,” added Alberto. ]]>

Facebook Comments

Latest Posts