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THE huge digital divide in the Philippines is preventing more Filipinos from reaping the benefits of digital technologies, according to a report by the World Bank and the National Authority for Economy and Development (Neda).
The report, titled “Better Normal Under Covid-19: Digitizing the Philippine Economy Now,” said that about 60 percent of Filipino households do not have access to the internet. This, despite We Are Social’s findings that Filipinos spend 10 hours online a day.
World Bank economist Kevin Chua, lead author of the report, said in a briefing on Monday that most Filipinos rely on mobile data to connect to the global web. Part of the reason is that the digital connection in the Philippines is expensive, slow, and has a low broadband penetration rate.
“Internet connectivity, the foundation of the digital economy, is limited in rural areas and, where available, services are relatively expensive and of low quality,” said Ndiame Diop, World Bank Country Director for Brunei, Malaysia , The Philippines and Thailand.
“Upgrading digital infrastructure across the country will introduce fundamental changes that can improve social service delivery, increase resilience to shocks, and create more economic opportunities for all Filipinos,” he said.
Where Internet services are available, Filipino consumers experience slow download speeds. At 16.76 megabytes per second, the Philippines’ mobile broadband speed is much lower than the world average of 32.01 Mbps.
In the region, the report said that the average 3G / 4G mobile download speed is 13.26 Mbps compared to just seven Mbps in the Philippines. Chua said that the most used in the country is 3G, which is the lowest version of the Internet connection.
The World Bank also noted that efforts to improve digital infrastructure in the Philippines are hampered by a lack of competition, as well as restrictions on investment in telecommunications markets.
These restrictions include the designation of public telecommunications services, which limits foreign ownership and places a cap on the rate of return.
“In this digital transformation of the whole society, the government can take the initiative by accelerating electronic governance projects, such as the foundational identification system and the digitization of its processes and procedures, which will help promote greater inclusion, improve efficiency and improve security, ”Chua said. “In addition, the government can play an active role in promoting policies that reduce the digital divide and create a more conducive business environment for the digital economy to flourish.”
Force the hand
Unionbank Vice President Justo Antonio Ortiz, who was a member of the panel at a briefing on Monday, said the government can accelerate digital technologies by issuing an Executive Order that can end the use of cash payments at a specified time.
Ortiz said that such an abrupt change in making payments could force companies to change their business models; the government to innovate its processes; and for Filipinos to become more familiar with the digital economy.
He said the ongoing pandemic has done exactly this for e-commerce. Ortiz said that when the pandemic hit, thousands of small businesses turned to the digital world to keep operating, while others became digital entrepreneurs overnight.
Data shared by the Department of Commerce and Industry backed it up. DTI Undersecretary Mary Jean T. Pacheco said total trade name registration is already 22 percent higher this year at 780,000 compared to the entire 2019 record year of 637,000.
Pacheco added that since the community quarantines began on March 15, there has been an increase of 4,435 percent in the registration of commercial names of online businesses or those that are engaged in retail sale through the Internet.
“This pandemic has caused substantial disruption to the national economy, as community restrictions have limited the movement of people and reduced business operations across the country. As we now live with the new normal, the use of digital technology and digital transformation have become important for Filipinos to cope with the current crisis, move towards economic recovery and get back on track towards our long-term aspirations. ” Neda. Said Undersecretary Rosemarie G. Edillon.
Fiber backbone
In order to support the country’s efforts towards the new digital normality, the Department of Information and Communications Technology (DICT) said that its main project is the National Broadband Network (NBN).
DICT Undersecretary for Digital Philippines Emmanuel Rey R. Caintic said in a presentation that the NBN will generate significant savings in terms of Internet use.
Caintic said the project will reduce government internet costs to P50 from the current estimate of P350. This will lead to total profits worth P5.9 billion between 2020 and 2025.
“I want to dream of the stars, at least I will reach the moon. So that’s the main goal of the DICT in delivering connectivity. Without the fiber backbone, we have nothing to talk about because there is no way to distribute, ”said Caintic.
However, he said, this is only a minimal estimate. If the House of Representatives grants additional funding to the DICT and the agency obtains funding from the country’s development partners, the benefits will be even greater.
According to their estimates, the DICT would need an additional P17 billion to undertake additional improvements to the country’s fiber backbone, Caintic said. This is in addition to the P18 billion they already have for the NBN.
The additional funds will cover the additional fiber backbone, as well as the construction of microwave radios for remote parts of the country such as Tawi-Tawi, Itbayat, Mahatao, Catanduanes, Oriental and Occidental Mindoro, Siargao, Puerto Princesa, Marinduque and Quirino.
To date, Caintic said the DICT is already in talks with the Japan International Cooperation Agency (Jica) for a P8 billion loan to provide fiber broadband facilities for the country’s east coast from Sorsogon to the east. of Mindanao.
With this, Caintic said, the DICT only needs about P10 billion more to carry out Phase 1 and Phase 2 of the NBN. The DICT can also turn to the World Bank for help.
“An additional P17 billion, just P17 billion, will be able to completely cross the entire nation next year, turn on the NGCP [National Grid Corporation of the Philippines] fiber backbone that we have, ”said Caintic.
The World Bank said that the rapid adoption of digital technologies can help the Philippines overcome the impact of the Covid-19 pandemic, recover from the crisis and achieve its vision of becoming a poverty-free middle-class society. The report said that the use of digital technologies such as digital payments, e-commerce, telemedicine and online education is increasing in the Philippines.
This has helped individuals, businesses, and the government cope with social distancing measures, ensure business continuity, and provide public services during the pandemic.
