Consumer advocacy group CitizenWatch Philippines has urged the government to reform the country’s Spectrum User Fee (SUF) system, warning that the current fee structure is hampering digital infrastructure growth and could leave millions of Filipinos disconnected.
SUFs impose substantial annual costs on telecommunications providers based on the frequency bandwidth assigned to them. These fees are determined by the size and type of spectrum allocated, with higher charges applied to wider bandwidths and more commercially valuable frequency bands.
In a statement released this week, CitizenWatch highlighted the country’s growing digital infrastructure gap, noting that internet penetration in the Philippines remains significantly lower than in its regional neighbors.
“As more Filipinos rely on mobile data for work, education, and digital transactions, telecom firms must acquire more spectrum to maintain service quality—but doing so automatically triggers higher SUF payments,” said CitizenWatch co-convenor Orlando Oxales.
“The system may have been relevant in the past, but now, it has become a barrier. It discourages investment and penalizes growth at a time when expansion is most needed,” he added.
CitizenWatch stressed that the government’s goal of achieving nationwide internet access will remain out of reach unless structural barriers—such as the existing SUF regime—are addressed.
Under the current system, telecom companies are charged annual fees based on the quantity and type of spectrum they hold. While the policy is intended to regulate spectrum allocation, CitizenWatch argued that the increasing costs are disproportionately burdensome, especially as demand for mobile data continues to grow.
From 2018 to 2022, SUF collections totaled ₱26.9 billion, peaking at ₱6.7 billion in 2022. The group warned that this fee model discourages innovation and hinders progress toward nationwide connectivity goals.
CitizenWatch also pointed to the imbalance between public and private sector investment in digital infrastructure.
According to the group, telecommunications giants Globe Telecom and PLDT have collectively invested over ₱761 billion in capital and operational expenditures in recent years to expand broadband networks and fiber infrastructure.
In contrast, the government’s digital infrastructure budget, through the Department of Information and Communications Technology (DICT), amounted to just ₱7.6 billion over a six-year period—far short of the ₱240 billion recommended by the Private Sector Advisory Council (PSAC) to meet digitalization targets.
CitizenWatch contrasted the Philippines’ limited public investment with more aggressive infrastructure programs in countries such as Vietnam and Indonesia, which have prioritized broadband expansion to remote areas.
“These countries understand what the Philippines must also embrace: digital infrastructure is not merely a commercial concern—it is a strategic national asset,” Oxales emphasized.
‘Incentivize investments’
To address these challenges, CitizenWatch called for the rationalization of SUFs to ensure they fulfill their intended regulatory function of managing spectrum efficiently, rather than serving primarily as a revenue-generating mechanism.
The group proposed lowering the fees to encourage telecom providers to invest in underserved and unserved areas.
“Lowering SUFs will unlock more capital for telcos to invest in new cell sites, backbone upgrades, and last-mile connectivity—accelerating the nation’s transition to a fully digital economy,” Oxales said.
“These infrastructure investments directly translate to greater digital access for more Filipinos—especially critical at a time when the digital economy is rapidly growing and expanding opportunities across sectors,” he added.
CitizenWatch said that combining SUF reforms with increased public investment and streamlined permitting under Executive Order No. 32 would reflect a “whole-of-nation” approach to bridging the digital divide.
“If we are serious about inclusive growth, digital empowerment, and long-term competitiveness, we must stop taxing connectivity and instead incentivize more investments in it,” the group concluded.