RP needs to boost ICT competitiveness

Did you know that only one percent of Philippine businesses are online? And that the Philippines lags behind its ASEAN neighbors Singapore, Malaysia and Thailand in the number of Internet users, although we are ahead of Indonesia?

This is a big irony considering that the Philippines has the second highest number of information and communications technology (ICT) training facilities in Asia (with 643 institutions as of March 2002).

Did you know that despite the wealth of natural talent in the Philippines, our deteriorating proficiency in math, science and English will seriously hamper our global ICT competitiveness if immediate educational reforms are not made?

As the United States and other Asian economies show unmistakable signs of steady recovery, 90 experts and representatives from the government, academe, IT industry and other business sectors convened last Wednesday at the Manila Galleria Suites for a meeting on "ICT Infrastructure and E-Readiness Assessment of the Philippines."

The conference was convened by the Ateneo Research Network for Development (ARND) led by Dean Dr. Emmanuel Velasco of Ateneo’s Gokongwei School of Management, the Department of Trade and Industry (DTI) led by Secretary Mar Roxas and infoDev/World Bank represented by operations manager Christian Rey.

It was a revelation that most small and medium enterprises (SMEs) in the Philippines still have low use of ICT, and have not yet reaped the benefits of electronic commerce.

Most of these enterprises are not aware of the benefits of ICT, cannot afford such services, are unsure of the positive returns on ICT investments, and lack the qualified personnel to design and maintain ICT tools and systems.

In fact, Development Bank of the Philippines (DBP) president Simon Paterno told The STAR that the DBP will soon launch Internet cafés in its Makati headquarters and other offices to enable more SMEs to access the Internet.

Apart from presenting research findings about the overall e-readiness of the Philippines, the conference conducted four workshops on the e-readiness of SMEs in four business sectors: the electronics sector, led by Ateneo Economics professor Ronald Tamangan; the furniture sector, led by Ateneo Economics professor Marissa Paderon-Macam; the processed foods sector, led by independent consultant Asuncion Sebastian; and the garments sector, led by Ateneo Economics professor Cruzita Carbon.

ARND convenor Dr. Ma. Cecilia Soriano acted as moderator of the whole conference. Speakers included Planters Development Bank president Flordeliza Aguenza and Ateneo Economics professor Dr. Fernando Aldaba.

ICT strengths

The Philippines today has five ICT parks that serve as locators for ICT development and services. President Arroyo has vowed full support for initiatives to develop the Philippine ICT industry, as part of her administration’s vision to transform the country into a full-fledged e-services hub in ASEAN and the whole of Asia.

But what are the strengths of the country’s ICT human resources? The conference cited three: adaptability to foreign technology, high productivity and widespread English literacy of the population. From 2000 to 2001, enrollment in IT courses in the Philippines jumped 47.6 percent, representing an additional 336,642 students.

On the macro level, the conference suggested the following measures to prop up the country’s ICT competitiveness:

• Passage of laws on competition,

• Convergence,

• Comprehensive data protection, and

• Creation of the new Department of Information and Communications Technology (DICT).

On the business environment, lower transaction cost through e-government and fiscal incentives for more ICT investments were recommended.

Challenges to

e-readiness

The conference agreed that the Philippine economic and political environment has improved steadily under President Arroyo, with Gross Domestic Product (GDP) rising from 3. 4 percent in 2001 to a projected four to 4.5 percent in 2002. However, it was pointed out that the Philippine economy and the overall e-business environment continue to be bedeviled by four problems – peace and order, corruption, kidnappings and excessive politicking.

The Philippines has so much untapped economic potentials, even as a possible regional ICT power, except for three major telecommunications problems – interconnection, the dominance of one telecommunications carrier with almost 60 percent market share, and the highly askew distribution of telephone lines.

The Philippine telecommunications industry was liberalized in 1995, and telephone density or "teledensity" had increased from 4.66 lines per 100 people in 1996 to 9.05 in 2000. However, by ASEAN and East Asian standards, the Philippines still needs to further modernize and expand wireline services for better ICT infrastructure and systems.

Meanwhile, Philippine Internet service providers (ISPs) face three major challenges – low density of telephones and personal computers (PCs), that they should shoulder transmission costs and pay for bandwidth and telecommunications for better Internet access, and competition from telecoms firms’ provision of Internet-related services.

The conference participants also pointed out problems in ICT education: the absence of a comprehensive study on the quality of Philippine ICT education; deteriorating proficiency in English, math and science; incomplete and outdated data on availability of Filipino human resources; and high wage differential between the Philippines and foreign countries, causing outward migration of Filipino ICT professionals.

So is the Philippines e-ready? The conference said: "It cannot be a full yes...or a full no...The crucial point is that the Philippines has all the potential to maximize the benefits from ICT as long as there is collaboration of key sectors and stakeholders so that things can move forward."