By Nguyen Hoang Minh Ngoc, Tech For Good Institute
Access to Information and Communication Technology (ICT) is a crucial target under Sustainable Development Goal 9, which aims to provide universal and affordable access to the internet in the least developed countries by 2020. However, the Philippines struggles with achieving this target, as its broadband access and speed lag behind the regional average, while costs remain high. To address this disparity, accelerating digitalisation has been identified as a cross-cutting strategy in the Philippine Development Plan 2023-2028.
Importance of Broadband for Economic Growth
Broadband is a critical element for the progression and expansion of the economy. A study by Ericsson showed that a 10% increase in mobile broadband adoption can lead to a 0.8% increase in GDP, highlighting its pivotal role in economic development. In the Philippines, an ITU-commissioned study found that mobile broadband contributed an annual 0.32% to GDP between 2000 and 2010, accounting for 6.9% of all GDP growth. In contrast, fixed broadband did not have significant impacts on the wider economy. This is partly because fixed broadband requires substantial investment in infrastructure, including cable modems, high-speed leased lines, fibre-to-the-home/building, powerline, and satellite broadband networks. Meanwhile, mobile broadband, with its smaller components such as handsets, cards, or USB modems, is much more accessible.
Despite the accessibility of mobile broadband, the strengths of fixed broadband, such as unlimited data, low latency, and stability, cannot be overlooked. These advantages highlight the necessity of developing fixed broadband alongside mobile broadband, as certain use cases specifically require these benefits.
Therefore, there is a pressing need for policy reforms to accelerate the development of fixed infrastructure, promoting the holistic adoption of broadband. This will not only enhance connectivity but also contribute significantly to the country’s economic growth.
Policy Recommendations for Broadband Adoption
From the discussion paper, the following recommendations and challenges were highlighted:
Governments play a pivotal role in fostering broadband adoption and achieving Universal Access and Service (UAS). This discussion paper explores the factors influencing broadband adoption, categorised into supply (network infrastructure and connectivity) and demand (content and services) factors. To expedite adoption and achieve UAS, governments can intervene in various roles: enablers, facilitators, and providers.
Enablers: Remove or lower barriers and allow diverse ownership models.
Facilitators: Reduce costs, regulatory burdens, and speed up infrastructure development.
Providers: Ensure service access in economically challenging areas, possibly through subsidies.
However, these programs may incur high costs, especially in less developed countries. Effective funding strategies are necessary to offset these costs. Research by UN ESCAP (2017) about the Universal Service and Access Funds (UASFs) revealed that the effectiveness of this funding is limited due to organisational factors such as insufficient designs, weak structures, and poor execution. Challenges include low disbursement rates, delays in execution, and non-compliance, which can hinder assistance to vulnerable groups and lead to potential legal disputes.
Historically, the Philippines has embarked on numerous telecommunications initiatives to expand and improve connectivity. Many of these projects have faced financial challenges, including high costs associated with building and maintenance, market competition, high capital requirements, and low profitability.
These experiences underscore the importance of careful financial planning and appropriate monitoring mechanisms to ensure program comprehensiveness. Additionally, transparency and accountability are essential to ensure that funds are used effectively and that intended beneficiaries truly benefit from these projects.
Multi-faceted Approach towards Philippine Development Plan 2023-2028
Since 2016, the Philippines has implemented a comprehensive approach to stimulate broadband adoption as part of its National Broadband Plan. This approach is characterised by a balanced focus on both supply and demand factors, recognising that both are crucial for achieving widespread digital connectivity.
On the supply side, the country has implemented significant policy and regulatory reforms to optimise the use of existing infrastructure. Key initiatives include the “Free Wi-fi for All” program and the use of satellite technology to extend connectivity to geographically isolated and disadvantaged areas (GIDAs). The Tech4Ed-DTC (Digital Transformation Centers) project also exemplifies this approach by providing valuable technical resources for educational purposes to underserved communities. Foreign aid through the United States Agency for International Development (USAID) is also making significant strides through its Better Access and Connectivity (BEACON) Activity to fuel digital connectivity in the Philippines.
Simultaneously, the Philippines has been boosting demand for broadband by digitising various sectors, including government services, education, healthcare, and initiatives promoting peace and development. By integrating digital solutions into these vital areas, the country is creating a strong incentive for broadband adoption.
Strategic Recommendations for Policymakers
A holistic approach that promotes both fixed and mobile broadband is essential to achieve Universal Access and Service (UAS) given their respective benefits and roles. While mobile broadband has seen significant growth and contributes to GDP, fixed broadband, despite its high costs and infrastructure requirements, offers benefits such as low latency, unlimited data, and stability. Therefore, a holistic approach that boosts both fixed and mobile broadband is crucial.
While the government plays a pivotal role in promoting broadband adoption, it must also address financial challenges and ensure robust monitoring mechanisms and effective project designs for successful implementation. The government’s crucial role as an enabler, facilitator, and provider is fundamental to broadband adoption. However, lessons from past initiatives indicate that financial constraints, inadequate monitoring mechanisms, and suboptimal project designs can impede the success of these projects. Consequently, meticulous financial planning, proficient project management, and consistent evaluation are indispensable for the successful implementation of large-scale telecommunications initiatives, particularly those related to broadband.
On the supply side, governments should bolster national, communal, and institutional access by optimising the current infrastructure. This can be achieved through public – private partnerships and regulatory reforms to encourage innovation and competition in the broadband market. On the demand side, digitalising various sectors like government services, education, and healthcare services can enhance the need for broadband. Moreover, encouraging content creation and localisation can further stimulate demand. By promoting locally relevant and engaging content, more individuals may be motivated to adopt broadband services.
However, to ensure the effectiveness of this digital transformation, comprehensive digital literacy programs should be implemented. These programs can equip individuals with the necessary skills to navigate the digital landscape, thereby maximising the benefits of broadband adoption.
This discussion paper offers valuable insights into the Philippines’ journey towards broadband adoption—a journey that is not confined to national borders but extends to the entire ASEAN region. The experiences of the Philippines, including the strategies employed, the lessons learned, and the challenges faced, serve as a practical roadmap for other ASEAN countries. By sharing these experiences and learning from each other, we can collectively navigate the path towards digital inclusivity and economic growth.
