Press Release
June 23, 2020

Boost ICT competitiveness to help spur PH digital economy - Gatchalian

As the coronavirus 2019 (COVID-19) pandemic forced many countries to rethink their business models and adapt to the digital economy, Senator Win Gatchalian sees the urgency of passing into law key economic reforms that will attract more Information and Communication Technology (ICT) investments.

The Vice Chairman of the Senate Committee on Economic Affairs stresses the need for affordable, reliable and widely available internet services in the country as more Filipinos now rely on digital platforms for work, school, and other day-to-day activities amid the pandemic. Companies have since adopted a work-from-home scheme while schools have been working on implementing blended learning as a precautionary measure against COVID-19.

Gatchalian points out that the Philippines still lags behind its Southeast Asian peers in terms of internet connectivity due to lack of infrastructure. Citing the June 2020 World Bank Report, Gatchalian says 72% of Filipinos can access the country's 4G/LTE mobile broadband network coverage, lower than the ASEAN regional average of 88%. Only 4% of Filipinos are subscribed to fixed broadband services, much lower than the regional average of 10%.

The same report also cites that the Philippines' 3G/4G mobile average download speed of 7 Mbps is considerably lower than the ASEAN regional average of 13 Mbps. In terms of fixed broadband average download speed, the Philippines can download 26 Mbps versus the ASEAN average download speed of 59 Mbps.

Despite having lower download speed, Filipinos pay higher price, making the country the fourth highest cost next to Singapore, Brunei, and Malaysia. Meanwhile, the cost of a fixed broadband plan in the Philippines is close to the cost of similar plans in Singapore and Thailand, the countries which have the fastest speeds in the region.

If the Philippines want to expand and benefit more from the digital economy, Gatchalian stresses the need to address several bottlenecks in the ICT sector such as the lack of ICT infrastructure and weak competition, among others.

"It is now time for the government to really assess on how it plans to grow the country's digital economy. The country's problem right now is we have unreliable and expensive internet services because there's not enough competition in the ICT space and there's not enough infrastructure to cater to the growing demand of digital economy," Gatchalian said.

For this reason, Gatchalian sees the urgency to pass into law key economic reforms that will attract more investments in the country, such as the Foreign Investments Act (FIA) which is now up for interpellation at the Senate. The FIA, for example, will lower barriers and help open up key sectors, like telecommunications, to many investors. At present, Globe Telecoms and PLDT/Smart are the dominant players in the country while the third telco company, Dito Telecommunity Corporation, has yet to roll out its operation.

Gatchalian said the government should invest in the digitalization of public administration and public service functions.

"Our receptiveness to these changes may very well determine whether we can live up to our true economic potential or remain in the doldrums compared to our next-door neighbors," he said.

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