A consumer advocacy group said heeding the call of President Ferdinand Marcos Jr. to embrace digitalization entails encouraging investments in digital infrastructure and upgrading the digital skills of Filipinos, and that only these parallel efforts will ensure a digital transformation across the board.
“There is no more argument that digital is the way to go,” said Orlando Oxales, co-convenor of CitizenWatch Philippines, in a statement made after Mr.Marcos’ speech during the Telco Summit 2022 held this week in Pasay City.
“One of the best examples of how financial transactions have gone digital especially for millions of ordinary and unbanked consumers who are now using payment platforms such as GCash as their default mode of payment for everyday purchases,” he added.
According to mobile data and analytics firm App Annie, the GCash app was the most downloaded for in the first nine months of 2020 which was the height of lockdowns.
In the Dec 2022 report by Statista stated that, “GCash had an average of 60 million users as of March 2022, accounting for about 83 percent of the adult population in the Philippines.”
“What we need to plan carefully and execute effectively is how we can achieve real digital transformation not only in select sectors or geographic locations, but across the archipelago. Collaborating with the private sector, providing more incentives, and instituting a digital skills improvement program are key steps to achieve this,” Oxales added.
The President had earlier said that the landscape change accelerates faster, compelling the country “to be even smarter, even bolder in finding digital solutions to many problems.”
Oxales said this is a cue that not only physical, but also digital, infrastructure must be given priority as the Philippines makes its way out of the economic crisis brought on by the pandemic. “These efforts should complement ongoing telco network upgrades and expansion,” he said.
No less than the World Bank, in its Philippine Economic Update in June 2022, is pushing for digital infrastructure investments to strengthen the digital economy and boost recovery.
“We should take the cue from the Bank’s recommendations especially on the matter of tapping PPPs to achieve near-universal connectivity,” Oxales said.
The Philippines, the WB said, should “promote investment in connectivity by ensuring an efficient allocation of spectrum and advancing public private partnership models for infrastructure.”
“The government, through the DICT, can stimulate increased mobile network expansion in rural areas through an efficient spectrum allocation by the operator (for 4G/ LTE and 5G).”
The WB said it would entail reviewing and revising regulations on spectrum allocation for mobile broadband.
The government should also leverage public-private partnerships to attract private investment and manage government assets, including physical assets, right-of-way, aggregated demand to create alternative sources of international bandwidth, the submarine cable landing station, and the domestic backbone network, especially in far-flung areas.
“Consideration may be given to the creation of incentives for attracting additional investment in broadband internet in underserved and unserved regions,” the World Bank said.
Oxales said the new administration has its work cut out for it — harnessing the PPP framework and offering incentives that would attract more investors in digital infrastructure. “This would, at the minimum, close the backlog of telco common towers for mobile phone signal coverage.
“Telco infrastructure is listed in the BOT law where private investors can work with govern
ent as well as database facilities and information and communications technology networks,” Oxales said.
Empowering MSMEs
Oxales also said the MSME sector carries vast potential for the Philippine domestic economy as they account for 99.5% of approximately 1 million registered establishments in the country.
MSMEs also employ 63% of the Philippine workforce.
“These MSMEs must be empowered with digital skills to help scale up their operations and reach potential markets beyond their localities,” Oxales said.
He pointed out that while most people resorted to online transactions during the pandemic, there remains great disparity in people’s ability to maximize the Internet’s potential in the new normal.
“We must, first and foremost, solve the systemic gaps in our digital readiness by upskilling our workforce,” he said.
“Without this parallel effort, all our initiatives in upgrading and expanding digital infrastructure would be for nothing.”
According to Oxales, the private sector also has much to offer for the digital education and training of Filipino workers and MSMEs, and is another area for PPP that carries vast potential.
“This is so they could be aligned not just with industry demand for skill sets but so our economy could support linkages to nurture cutting-edge digital innovations.”