Evolution of Tech Regulation in the Philippines: Empowering Consumers and Fostering Competition

In this article, Jestoni A. Olivo, Policy Research Officer at the Philippine Competition Commission, delves into the progressive development of tech regulation in the Philippines and shares his insights on fostering a responsive regulatory environment in the country. This article builds on the latest research on Tech Regulation by the Tech For Good Institute.

By Jestoni A. Olivo, Policy Research Officer at the Philippine Competition Commission

 

With robust growth momentum gained during the COVID-19 pandemic, the Philippine digital economy is expected to sustain a double-digit climb toward USD 35 billion in 2025, making it one of the fastest-growing digital economies in Southeast Asia. The pandemic has left a long-term legacy of increased reliance on digital technologies, and industrial growth substantially depends on companies’ ability to adopt and invest in these innovations. According to an IMF Study, digitalisation helped shield productivity from the pandemic, with the most digitalised industries experiencing significantly smaller losses.

While digital technologies provide innovative means for consumption and production, they also pose challenging issues that prompt governments to rethink their regulations. From the promises and threats of big data to the convenience of and security concerns in using digital payments, new regulations are born to address emerging issues. This transformation is evident in the Philippines, where, in almost 25 years, the regulatory regime has gradually transformed, adopting new policies of consumer protection and competition since the passage of the E-Commerce Act in 2000. This article provides a glimpse of the progressive development and future of tech regulation in the Philippines, particularly in telecommunications, transportation, and digital commerce.

 

Regulatory Developments in Telecommunications

Similar to other countries in Southeast Asia, the Philippines is not immune to disruptions in tech regulation. In the telecommunications sector, the global rollout of 5G technology challenged the country’s readiness to take advantage of its supposed benefits. Despite being one of the earlier countries to roll out 5G in mid-2019, the Philippines lags behind some Southeast Asian comparators in terms of speed and coverage. In an Ookla research tracking the development of 5G deployment in the first half of 2023, the Philippines has a median download speed of 133.47 Mbps, whereas Malaysia boasts 512.10 Mbps. Although performing relatively well among Asia Pacific countries, Ookla finds that Filipinos only enjoy 19.8% coverage compared to 26.8% in Thailand.

In response to the current limitations in speed and coverage, the government pushed for reforms to alleviate connectivity issues. The Mobile Number Portability (MNP) Act of 2019 presents an opportunity to rebalance the relationship between mobile service providers (MSPs) and subscribers by allowing the latter to change their MSP without abandoning their mobile number. Coupled with the entry of the third major telco player, DITO Telecommunity, in 2021, the MNP Act not only offers an immediate remedy for subscribers but is also expected to intensify the rivalry among players in their bid to retain and expand the current consumer base.

The government and other keen observers are also on the lookout for developments in the Open Access in Data Transmission (OADT) Act, still pending legislation. The OADT contains novel provisions encouraging the sharing of data transmission infrastructure and removing barriers to competition in data transmission services. Supporting its fastidious enactment, the National Economic and Development Authority advocates a series of strategic and complementary reforms in a policy note. For example, the OADT allows passive and active infrastructure sharing among operators, consistent with international practices. Effective implementation can lead to a more efficient use of network resources and facilitate the entry of new players.

 

Regulatory Developments in Transportation

In the transportation sector, the popularity of ride-hailing apps for 4-wheeled vehicles and the pending legal recognition of similar digital platforms for 2-wheeled vehicles (e.g., motorcycle taxis) stimulated the government to readjust regulations and competition analysis standards traditionally applicable to public utility vehicles.

While motorcycle taxis offer commuters an accessible and faster mode of transportation, there is still no law governing the safety and security of the riding public. This prompted the Department of Transportation in 2019 to launch the pilot implementation of motorcycle taxi services offered by three players – Angkas, Joyride, and Move It. The pilot program aims to provide sufficient information for the government to determine whether motorcycles are a viable mode of public transportation. Initial results show a 99.98% safety rating among the three players.

The novelty of these apps also exposed antitrust authorities’ varied standards in competition analysis. The Grab-Uber merger case in 2018 challenged competition agencies’ merger review methods in Southeast Asia. When the acquisition was announced, these agencies independently initiated investigations to determine if the transaction was anti-competitive. This led to contrasting conclusions in different markets, with the Philippines and Singapore deciding that the case was anti-competitive, while Indonesia and Vietnam found the opposite. This stems not only from the complexity of the digital economy but also from the legal and institutional gaps across countries. Ultimately, there is a need to synchronise antitrust actions in Southeast Asia by reducing heterogeneity in competition policies.

 

Regulatory Developments in E-commerce

In electronic commerce, the passage of the E-Commerce Act in 2000 authorised the Department of Trade and Industry (DTI) to promote e-commerce activities in the country. The appreciation of e-commerce has evolved over time, and a number of policies have been developed to cater to the expanding sector. Fast forward to the 2020s, where numerous products and services are now sold online, various consumer protection issues have emerged, including fake online orders and counterfeit products.

The Internet Transactions Act (ITA) of 2023 serves as a strong disincentive for relevant actors to engage in unfair trading practices. The ITA explicitly aims to protect online consumers and merchants by setting up an online dispute resolution and penalising actors found guilty of deceptive sales or unjustified order cancellation. The law also attaches fresh mandates to the DTI to ensure the robust and dynamic development of the digital commerce sector through the establishment of the E-Commerce Bureau.

A cross-cutting issue in these sectors is the collection, processing, storage, and disposal of personal information. In 2012, the Philippines put into place comprehensive legal protection of personal information through the Data Privacy Act. Consequently, the National Privacy Commission was formed in 2016 to establish a regulatory regime that ensures accountability in the processing of personal data.

 

In conclusion, the country should sustain the digital economy’s promising growth trajectory by complementing existing reforms with a more responsive regulatory regime. The government may consider the following broad recommendations:

  • Reinforce the digital economy with the right mix of competition and regulation. Sector regulation should be infused with a competition lens, and competition policy should be guided by public policy considerations.
  • Ensure tech policy coordination. This is crucial among regulators most disrupted by technological innovation. A whole-of-government approach that calls for interagency solutions to broad digital economy issues should be institutionalised. The importance of coordination in tech policy is further echoed by the Tech For Good Institute’s Tech Regulation research, which underscores the need for a responsive regulatory environment.
  • Boost and widen the coverage of consumer advocacy programs. Consumer education is vital for them to be informed of their rights and to spot competition issues affecting their consumption amidst the digitalisation of commercial transactions in various sectors.

 

The views and recommendations expressed in this article are solely of the author/s and do not necessarily reflect the views and position of the Tech for Good Institute.

 

About the writer

Jestoni A. Olivo is a Policy Research Officer at the Philippine Competition Commission where he conducts research on competition-related cases and the effects of competition on welfare and development. He is interested in policy issues affecting agriculture, energy, and digital markets.

Download Report

Download Report

Latest Updates

Latest Updates​

Keep pace with the digital pulse of Southeast Asia!

Never miss an update or event!

Mouna Aouri

Programme Fellow

Mouna Aouri is an Institute Fellow at the Tech For Good Institute. As a social entrepreneur, impact investor, and engineer, her experience spans over two decades in the MENA region, South East Asia, and Japan. She is founder of Woomentum, a Singapore-based platform dedicated to supporting women entrepreneurs in APAC through skill development and access to growth capital through strategic collaborations with corporate entities, investors and government partners.

Dr Ming Tan

Founding Executive Director

Dr Ming Tan is founding Executive Director for the Tech for Good Institute, a non-profit founded to catalyse research and collaboration on social, economic and policy trends accelerated by the digital economy in Southeast Asia. She is concurrently a Senior Fellow at the Centre for Governance and Sustainability at the National University of Singapore and Advisor to the Founder of the COMO Group, a Singaporean portfolio of lifestyle companies operating in 15 countries worldwide.  Her research interests lie at the intersection of technology, business and society, including sustainability and innovation.

 

Ming was previously Managing Director of IPOS International, part of the Intellectual Property Office of Singapore, which supports Singapore’s future growth as a global innovation hub for intellectual property creation, commercialisation and management. Prior to joining the public sector, she was Head of Stewardship of the COMO Group and the founding Executive Director of COMO Foundation, a grantmaker focused on gender equity that has served over 47 million women and girls since 2003.

 

As a company director, she lends brand and strategic guidance to several companies within the COMO Group. Ming also serves as a Council Member of the Council for Board Diversity, on the boards of COMO Foundation and Singapore Network Information Centre (SGNIC), and on the Digital and Technology Advisory Panel for Esplanade–Theatres on the Bay, Singapore’s national performing arts centre.

 

In the non-profit, educational and government spheres, Ming is a director of COMO Foundation and Singapore Network Information Centre (SGNIC) and chairs the Asia Advisory board for Swiss hospitality business and management school EHL. She also serves on  the Council for Board Diversity and the Digital and Technology Advisory Panel for Esplanade–Theatres on the Bay, Singapore’s national performing arts centre.

 

Ming was educated in Singapore, the United States, and England. She obtained her bachelor’s and master’s degrees from Stanford University and her doctorate from Oxford.