Improving PH regulatory environment key to lift subpar ICT performance: report

Implementing bold policy reforms is needed to enable the Philippines to achieve inclusive and accelerated digital connectivity, address the widening digital inequality, and catch up to its regional neighbors in digitalization acceleration, a new report says.

A Philippine Institute for Development Studies (PIDS) report underscores the need for stronger measures as the Philippines “continues to demonstrate subpar performance” in information and communications technology (ICT) compared to other ASEAN members and countries at the same level of development.

The Philippines falls short in affordability for broadband services, particularly fixed broadband, said the research paper. Moreover, in 2019, only 17.7% of Philippine households were connected to the Internet, significantly below the global average of 61.5% and 52.6% for developing countries. This means that roughly four in five households in the country are excluded from participating in the digital economy.

Internet access is also highly uneven across the Philippines. The National Capital Region (NCR) has the highest proportion of connected households, with 33.2%, while the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) has the lowest, with only 4.5%. Thus, households in the NCR are seven times more likely to have internet access than those in the BARMM.

The paper entitled “Upgrading the ICT Regulatory Framework Toward Accelerated and Inclusive Digital Connectivity” attributes this poor internet performance to the gaps and weaknesses in the Philippine regulatory environment.

“The quality of the ICT regulatory environment in the Philippines falls short of global standards, especially in light of technological changes,” according to the paper released this month.

The report said that while the arrival of new technologies offers significant benefits, their impact on Philippine industries and the economy could be limited by the presence of restrictive and outdated regulations or the absence of an enabling environment.

“To remain relevant and effective, the regulatory framework, composed of the institutions and specific regulations, needs to be updated to respond to changing technological and market conditions,” it stated.

The paper pointed out that the poor quality of the country’s ICT regulatory environment impedes the use of various technological solutions available to bridge the gap in digital inequality.

“Digitalization is one of the major tools to increase resilience to socioeconomic shocks brought on by the pandemic,” explained the report authored by Ramonette Serafica and Queen Cel Oren. “It encourages digital transformation of business (e.g., adoption of digital payments, e-commerce). It is also a major factor for a more efficient and coordinated whole-of-government approach to delivering better government services. However, the digital gap could exacerbate existing socioeconomic inequalities.”

The report added that while significant policy changes have recently been introduced, more reforms are needed for inclusive and accelerated digital connectivity. Priorities include reforming the licensing regime, formulating a spectrum policy and plan, and reinventing the National Telecommunications Commission (NCT) to ensure regulatory independence.

The paper pushed for reforming the licensing regime to facilitate ICT development.

“The licensing regime is restrictive and burdensome, resulting in costs and delays in network buildup and the deployment of new technology. The types of licenses issued should be reviewed to liberalize market entry further,” it said.

The importance of establishing a policy framework that will manage radio spectrum was also highlighted. “Almost two decades later, with 5G already commercially available and 6G on the horizon, a national spectrum policy has yet to be formulated for the NTC to implement,” the document said.

Another recommendation is to ensure the regulatory independence of the NTC. “… a new charter may be needed to consolidate the mandate of the NTC based on various laws, clarify the scope of its quasi-judicial and administrative functions and processes, and define its relationship with other agencies (e.g., the Philippine Competition Commission), among other things,” the report suggested.

Finally, the research paper also recommended further research and analysis on the barriers to entry and expansion in the ICT sector in order to reduce the digital divide.

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