WEDNESDAY / 12 JULY 2017

IN FOCUS: ICT development in the Philippines

In today’s knowledge-based economy, the competitiveness of a country depends on the efficiency of its information and communications technology (ICT) sector.  As such, the Philippines needs to have a reliable ICT infrastructure and an ICT-competent workforce to keep up with the digital economy.

Currently, roughly three in every five (58%) Filipinos have access to the internet, according to the report, Digital, in 2017 by social media consultancy firm, We Are Social, and social media management platform, Hootsuite. This places the Philippines fifth in Southeast Asia in terms of the number of internet users, and slightly above the average global ranking based on internet penetration level, which is at 50 percent.

However, while the Philippines has experienced an incredible internet population growth since 2000, researchers Jose Ramon Albert, Ramonette Serafica, and Beverly Lumbera from the Philippine Institute for Development Studies (PIDS) still noted a relatively weak uptake of ICT services in the country. 

In their study, Examining Trends in ICT Statistics: How Does the Philippines Fare in ICT?, Albert et al. attributed this to the high cost of ICT services. In terms of telephone services, for instance, users usually pay around PHP 1,800 for their monthly fees, currently the most expensive in the region. They observed the same scenario in other ICT services, such as mobile cellular and fixed broadband services, where the Philippines has the second and third highest retail prices, respectively, in Southeast Asia.

Despite this high cost, the Philippine ICT environment remains significantly below the international standards. In a study, Rebooting Philippine Telecommunications through Structural Reform, Serafica, together with Ma. Kristina Ortiz and Jose Carlos Alexis Bairan, noted the country’s poor performance in ICT governance and regulation. Specifically, they cited the country’s failure to institute an independent regulatory body for the ICT sector, the presence of unnecessary and biased policy of requiring legislative franchise to authorize ICT service providers, and the nonissuance of unified license, as factors behind the ineffective regulatory environment in the country.

To achieve an ideal ICT environment, Albert et al. urged the government to explore partnerships with the private sector for building new and better infrastructures and for upgrading the capacities of ICT staff to keep up with the fast-changing technologies.

Meanwhile, Serafica et al. encouraged the creation of an independent regulatory body that has both decisionmaking powers and a stable and reliable source of revenue for their operations. They added that it should likewise have officials who have fixed terms of office that should not coincide with the tenure of the executive and legislative branches of government.

In a policy note, PIDS President Gilberto Llanto also stressed the crucial importance of revisiting the radio spectrum management policy. Under the current setup, the government—through the National Telecommunications Commission (NTC)—assigns all radio frequencies to private companies and government agencies. The NTC grants licenses based on an entity’s financial and technical capacity to provide the capital and infrastructure required to optimally use the awarded spectrum bands. However, not all are using their allocated frequencies (nor paying the required fees), resulting in inefficient use of this scarce resource. Llanto suggests alternative approaches like market-based methods (e.g., auction).

Ultimately, PIDS researchers recommend the formulation of better laws, rules, and regulations; increasing ICT investments to upgrade infrastructures; monitoring and regulation of network interconnectivity; and enhancements in the capacity and accountability of offices that manage the ICT sector like the Department of Information and Communications Technology.

You may access the following publications as well as related studies from the PIDS website and the Socioeconomic Research Portal for the Philippines. Simply type the relevant keywords in the Search box.

• Rebooting Philippine Telecommunications Through Structural Reform

• Examining Trends in ICT Statistics: How Does the Philippines Fare in ICT?

• Making digital dividends inclusive

• e-Government Initiatives of Four Philippine Cities

• The Philippine Information and Communication Technology Sector: Evolving Structure and Emerging Policy Issues

• E-governance at the Local Government Level in the Philippines: An Assessment of City Government Websites

• E-commerce in the Philippines: A Preliminary Stocktaking

• Reviewing the Philippines’ Spectrum Management Policy
  
  
• Narrowing the Digital Divide: A Must for the ICT Sector
  
  
• Competition Policy and Regulation in Power and Telecommunications
  
  
• E-governance at the Local Government Level in the Philippines: An Assessment of City Government Websites

August 24, 2017, 9-5PM
ERIA-PIDS-MinDA-AS Public Symposium on “Building ASEAN Socio-Cultural Community and Nation Building”
Venue: Marco Polo Hotel, Davao City

July 26, 2017, 9:30-11:30AM
Assessment of Tax Reform as Proposed under House Bill 5636 (Senate Economic Staff Forum Series)
Venue: Senate of the Philippines, Pasay City

July 11, 2017, 9:30-11:30AM
Seminar on "Have We Institutionalized DRRM in the Philippines?"
Venue: PIDS Conference Room, 18th Floor Three Cyberpod Centris - North Tower, EDSA cor. Quezon Ave., Quezon City

The Philippine Journal of Development is a professional journal published by the Philippine Institute for Development Studies. It accepts papers that examine key issues in development and have strong relevance to policy development. As a multidisciplinary social science journal, it accepts papers in the fields of economics, political science, public administration, sociology, and other related disciplines. It considers papers that have strong policy implications on national or international concerns, particularly development issues in the Asia-Pacific region.

CLICK HERE for the guidelines in the preparation of articles. Submissions and inquiries may be sent to PJD@mail.pids.gov.ph

POLICY NOTES

• PN 2017-14: Estimating Filipinos’ Vulnerability to Poverty
  by Christian D. Mina and Celia M. Reyes
  
  Natural disasters, together with other shocks, have contributed to the vulnerability of both poor and nonpoor Filipino households to poverty. While the government needs sufficient information to formulate appropriate interventions for these vulnerable households, the country’s official poverty statistics have not paid much attention to measuring the Filipinos’ vulnerability to poverty. This Policy Note provides an estimate of Filipinos’ vulnerability to poverty and finds that Caraga and Zamboanga Peninsula regions had the highest proportion of vulnerable households. Moreover, it reveals that vulnerable households tend to have younger and less-educated heads, have higher dependency ratio, are located in rural areas, and lack access to irrigation. It urges the government to continue implementing policies and programs that develop human capital, such as the Pantawid Pamilyang Pilipino Program. It also recommends increasing the productivity of nonagriculture industries to improve labor absorption and provide more and better jobs. Click here for the full article.
  
  
  
• PN 2017-13: Analyzing Housework Through Family and Gender Perspectives
  by Connie B. Dacuycuy and Lawrence Dacuycuy
  
  Housework shapes the invaluable role that women play in the society. However, given that the time allocated to housework affects the time spent on market work, this raises several critical issues based on economic and sociological perspectives. This Policy Note analyzes the role of wage and attitudes toward gender roles within the family in determining the time allocated to housework. Using the 2002 International Social Survey Program and instrumental variable technique, the study finds that the female respondents' wage positively affects husbands' time devoted to housework, which reflects the shifting dynamics of gender roles among households and in the labor market. It recommends government to address issues that severely increase the time outside of home and reduce family members' interaction, such as poor road conditions. To support parents who work, it also calls for the government to explore the provision of day-care and tutorial services at affordable costs to ensure that children are getting good supplementary care. Click here for the full article.
  
  
  

• DP 2017-23: Scoping Study on Reducing Unnecessary Regulatory Burdens in the Philippine Food Manufacturing Industry
  by Nerlita M. Manalili, Suzette Simondac, Imelda V. Valenton, and Mara Michelle Q. Pangilinan
  
  The food manufacturing industry (FMI) is a major contributor to the country's total manufacturing output. However, despite the industry's performance in terms of job creation and income generation, it is constrained by existing regulatory procedures and processes. This scoping study assesses the Philippine FMI subsectors and the regulatory system governing them. The study reveals that the FMI faces four major regulatory burdens specifically related to 1) organizational matters, 2) regulation compliance, 3) trade and market access, and 4) consumer-related concerns. Thus, industry-wide plans covering both development tracks and the needed regulatory enhancements covering the abovementioned areas would be beneficial to all the food manufacturing subsectors. Read more about the results of the scoping study and possible options to address these regulatory burdens in the FMI. Click here for the full paper.
  
  
  
• DP 2017-22: The Impacts of Roll-On/Roll-Off Transport System in the Philippines
  by Kris A. Francisco
  
  It is well recognized in the literature that a country's transport system plays a central role in its development. This paper shows the economic impacts of improvements in the transport system by studying the experience of the Philippines with the roll-on/roll-off (Ro-Ro) policy promoting the use of Ro-Ro ferry terminal system. Using difference-in-difference strategies in analyzing agricultural household income and children's education, the study finds that the operation of Ro-Ro ports largely benefited the households living near the Ro-Ro ports. More specifically, estimates suggest that agricultural households gained higher income from the operation of these ports because both agriculture- and nonagriculture-related activities were stimulated. School attendance of children in municipalities near Ro-Ro ports also increased, which may be a result of the increase in family income experienced in these areas. Know more of the results of the research as well as the short- and long-run impacts of improving a country's transport system through this paper. Click here for the full paper.
  
  
  
• DP 2017-21: A Review of Philippine Government Disaster Financing for Recovery and Reconstruction
  by Deanna T. Villacin
  
  The study assesses the disaster risk financing mechanisms in the Philippines. It looks at the sources and levels of disaster financing specifically for recovery and reconstruction. It also looks at the adequacy and execution of the current disaster risk finance and insurance mechanisms. Case studies presented showcase detailed analysis at the sectoral level. The study notes that the government has been mainly relying on budget allocations to fund recovery and reconstruction. The uncertainties in annual budget allocations and the protracted funds flow processes slow down reconstruction/rebuilding, thus, adversely affecting economic recovery of disaster areas. The paper suggests that the government develop a more adequate, effective, and efficient overall disaster risk financing and insurance program to mitigate the impact of disaster. Read more about the review and the policy recommendations to improve disaster financing in the Philippines. Click here for the full paper.
  
  

ECONOMIC ISSUE OF THE DAY

• EID 2017 Vol. XVII No. 1: The Rise of Collaborative Economy in the Philippines
  by Rejinel G. Valencia
  
  Collaborative economy is an emerging trend of consumption that allows peer-to-peer economic exchange particularly among the young and the urban. This Economic Issue of the Day provides an overview of collaborative economy as a new business phenomenon in the Philippines and explores the regulatory issues that come with its rise in the country. It urges the government to revisit its regulation mechanisms and explore how to integrate businesses arising from it into the broader economy and make them legitimate economic entities. The end goal should be to lay down a set of coherent and evidence-based policies to maximize the fruits of this emerging economy for the benefit of the Filipino people. Click here for the full article.