ICT and Competitiveness

ICT and Competitiveness

August 26, 2014 10:24 pm

The Global Information Technology Report (GITR) 2014 (http://www.weforum.org/reports/global-information-technology-report-2014) is out. The GITR 2014 assesses an economy’s networked readiness based on a number of indicators grouped into the following:

• Political and regulatory environment, and business and innovation environment

• Readiness of infrastructure, digital content, affordability, and skills

• Usage by government, business, and individuals

• Economic and social impacts

In this 13th edition of the GITR, the Philippines is ranked at 78th place among 148 economies, up from the 86th place it held in 2013. The change in ranking indicates that the Philippines is progressing in networked readiness.

Focusing on Asean, the GITR 2014 ranks the Philippines at 6th in the region after Singapore (2nd), Malaysia (30th), Brunei Darussalam (45th), Indonesia (64th), and Thailand (67th). In the face of the Asean economic integration by the end of 2015, we need to look at how ready the country is and devise ways how to go further up the competitiveness ladder. The Asean economic integration is seen as a game changer and will usher in a new competition landscape. The GITR 2014 cites information and communications technology (ICT) as a key enabler of economic and social development and underscores the importance of ICTs for long-term competitiveness and well-being.

The country has taken great strides in ICT. The business process industry, which started at around the turn of the century, continues to grow. http://ipezone.blogspot.com/, in its 2014 ranking, reports that “[B]ecause of its head start and agglomeration or clustering effects, India (specifically Bangalore) still dominates the list. That said, Manila has displaced Mumbai as the #2 rated destination.” A World Bank study also shows that “[S]ervices export as a percent of total exports increased from 9 percent in 1999 to 21 percent in 2009 in the Philippines.”

Let’s take a look at a few of the indicators that I believe our country has to work on in order to further go up the GITR rankings.

The GITR 2014 ranks the Philippines at 75th place among the countries surveyed in terms of affordability of Internet access. But compared to its neighbors in Asean, cost of access in the Philippines remains high. Data from the National Telecommunications Commissions shows that the monthly cost of Internet access in the country is at P333 per megabits per second (Mbps) compared to Singapore’s P82/Mbps and Thailand’s P81/Mbps.

The Philippines is at the bottom of the totem pole in terms of Internet speed. ASEAN-DNA (https://www.facebook.com/ASEANDNA/photos/a.494193073943978.1 1343.494189467277672/801684926528123/) shows Philippine Internet speed at only 3.6Mbps, behind Laos at 4Mbps, Indonesia at 4.1Mbps, and Myanmar and Brunei Darussalam at 4.9Mbps. Singapore leads all economies in Asia at 61Mbps. Akamai, in its State of the Internet Report (http://www.akamai.com/stateoftheinternet/), finds the Philippines’ average connection speed at only 2.1Mbps.

One factor contributing to the high cost of access is the non-peered networks of the two telecommunications giants. Messages and data that are exchanged between the two giants’ networks are routed outside the country and the user bears the routing cost. A central Internet exchange that will connect the networks of the two giants is seen to lower the cost of access and improve speed.

In the legal and regulatory front, the GITR 2014 cites “significant improvement in the perceived efficiency in the country’s legal system and property rights protection drive, the political and regulatory environment up to 87th place.” But personal experience says otherwise.

Laws take about 10 years to go through the legislative mill. Taking more than a decade, the Data Privacy Act (DPA) and the Cybercrime Prevention Act (CPA) were passed into law in September 2012. While the laws had long become effective, implementation is held pending.

The Data Privacy Commission, mandated to be created under the DPA, has not been created. Ahead of its creation, the DPA Implementing Rules and Regulations (IRR) has been crafted, its promulgation waiting for the creation of the Commission.

Implementation of the CPA has been held in limbo. Under the current draft of the CPA IRR, the Department of Justiceis poised to create a third law enforcement agency. The CPA mandates the creation of the Office of Cybercrime (OOC) to handle matters involving international cooperation and mutual legal assistance and extradition. But under the draft CPA IRR the OOC is empowered with law enforcement functions, functions that encroach on the respective mandates of the National Bureau of Investigation and the Philippine National Police. The OOC is also empowered to manage the annual appropriation of Pesos 50 million beyond the intent of the framers of the law.

Let’s face IT!, ICT is our way forward. If we are to enhance our country’s competitiveness through ICT, government needs to push for improvements in the country’s ICT infrastructure, raise the efficiency of our legislative processes, and ensure proper implementation of laws and related IRRs.

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