The country’s top think tank is calling on the government to invest in broadband infrastructure to boost the competitiveness of the Philippines in the global digital economy.
“Digital transformation has always been a stated priority of this administration,” said Professor Victor Andres “Dindo” Manhit, President of the Stratbase Institute. “But the government need to allocate more resources to upgrade the national broadband infrastructure.”
Manhit said these can take the form of expansion of fiber-optic networks, the deployment of 5G technology, and the enhancement of last-mile connectivity to reach underserved communities.
He echoed the call of the Private Sector Advisory Council (PSAC) which asked for an increase in the budget of the Department of Information and Communications Technology (DICT) to P240 billion, which in the six years from 2018 to 2024 totaled only 7.6 billion.
According to Manhit, broadband infrastructure serves as the conduit through which digital data flows, facilitating communication in commerce and social services, and enabling constant innovation.
“Business will be able to grow and expand, entrepreneurs will be given room to innovate, and individuals will be able to use information that they could use for educational and economic advancement,” he said.
Manhit added that the transformative potential of broadband infrastructure can be best harnessed by the Philippines’ young and digitally savvy population, even as all segments of the citizenry stand to benefit from digital transformation.
“Broadband connectivity is no longer a luxury, something that is nice to have or an added feature,” Manhit added. “Internet connectivity is an indispensable utility of a digital economy.”
“Access to fast and reliable broadband services is a fundamental requirement for full and meaningful participation in the digitalized global economy. We stand to lose so much in real and potential benefits if we do not address the gaps in the country’s digital infrastructure.”
Despite best efforts by private telcos in the Philippines, challenges continue to hound the digital sector, with broadband penetration rates and internet speeds lagging behind those of other countries in the region.
“The Philippines’ tremendous potential in the global economy stands to be undermined by the digital divide,” said Manhit, adding that this divide can only perpetuate the deep socio-economic disparities and inequities in our society.
According to datareportal.com, there were 86.98 million internet users in January this year, representing an increase of 1.8 million users (2.1% ) year on year. However, the remaining 31.24 million individuals did not use the internet during this period, which translates to a good 26.4 percent of the population remaining offline.
“Imagine if we could reach these underserved segments, and how they could contribute to economic activity as well as enhance their own technological know-how,” said Manhit.
Investment gap
No less than the World Bank has said that the Philippines has a broadband investment gap of around $2 billion or P110 billion per year, and even fiscal measures and direct investments by the government would hardly be enough to cover the deficit.
The World Bank added that current low investments in connectivity have led to expensive broadband services, slow speeds, and a still-high percentage of the population that does not have mobile broadband services.
Further, it said that the Philippines has invested less than 1% of its annual GDP in telecom infrastructure. In fact, from 0.64% of GDP in 2018, investments declined to 0.44% of GDP in 2022.
“The cost of inaction—loss of growth opportunity, people remaining unequipped for future jobs, and widening of the digital divide—are avoidable . Outdated policy and regulations have long stunted the growth of the country’s broadband industry and expansion of digital infrastructure,” the World Bank said in a report.
The succeeding budget cycles should have substantial allocation increases for broadband infrastructure as this is crucial for the Philippines to foster digital inclusivity, stimulate economic growth, and enhance global competitiveness. It will empower Filipinos with reliable internet access, catalyze innovation, and pave the way for a resilient, digitally enabled society.