Digital readiness for the new normal

I did my first Zoom meeting last week. Like shaving, I tried to hold back as long as I could. At the back of my mind, I was thinking that doing a Zoom meeting is like surrendering to the new normal being forced on me.

Even as I advocate moving our country fast on the road of digital modernity, I am personally happy to be a luddite. Beyond e-mail, MS Word and FaceTime, I can always ask family members if I need to use anything else.

Then, former foreign secretary Roberto Romulo invited me to be a reactor in a webinar featuring NEDA Secretary Karl Kendrick Chua on how this administration plans to get us onto the digital superhighway.

So, I asked my wife to set up her Apple laptop to get me onboard the webinar sponsored by the Carlos P. Romulo Foundation and the Makati Business Club. She has the Zoom app on her computer for her Bible meetings.

Sec Karl’s presentation was as usual professionally done. The economic team can always be depended on to make good presentations.

NEDA wants us to move towards greater integration with the world digital economy. It is good to know the economic team knows where we realistically are, where we want to be and the hindrances to getting there.

The current pandemic has highlighted just how important it is for us to get going in the digital economy. Digitalization could have enabled the public and private sectors cope better with the COVID crisis.

Sec Karl emphasized that society and the economy must operate in the ‘new normal’. We must veer away from the long-held manual and analog practices of both the public and private sectors.

Sec Karl pointed out that digital technology has emerged as key enablers of activities during the lockout. It minimized human contact, while maintaining communication and engagement. “In the new normal, digital technologies can facilitate social distancing, support business continuity, and prevent service interruptions.”

Digital technologies can increase the productivity of businesses, opportunities for people, and the efficiency of government. Sec Karl cited examples: e-commerce platforms, digital payment solutions, remote learning and working, conduits for information sharing and monitoring, among others.

Unfortunately, we are “kulelat” in the availability and use of digital technology. We are a global leader in internet usage, but we trail many regional neighbors in digital technology adoption.

The Philippines lags behind most regional peers in highspeed fixed and mobile broadband penetration, Sec Karl reports.

That didn’t prevent us from becoming top users of Facebook and a world capital for fake news trolls. From 2010, internet users in the Philippines have tripled to 73 million in 2020, Sec Karl revealed.

Filipinos, on average, spend nearly 10 hours on the internet per day (five hours on mobile internet and about four hours on social media). From 2012 to 2018, the value added of the digital economy posted double-digit growth averaging over 13 percent.

But as Sec Karl pointed out, the size of our e-commerce retail market shows the low levels of digital adoption in the country. E-commerce among the ASEAN amounted to $35 billion in 2015, but the Philippines share is only 0.5 percent.

Furthermore, the limited digital infrastructure contributed to a significant “digital divide”. In 2018, the United Nations (UN) Broadband Commission reported that about 40 percent of the Philippines’ total population and around 57 percent of the country’s 23 million households did not have internet access.

In terms of broadband speed, the Philippines is ranked 97th out of 207 countries and is behind Malaysia (30th), Thailand (45th), Vietnam (89th), and Indonesia (92nd). It is the same sad story for cost where Philippines (80th) lags behind Vietnam (10th), Thailand (37th), Indonesia (54th), and Malaysia (58th). Lousy na, mahal pa.

Sec Karl acknowledged that the business environment needs improvement. However, he admitted that this is made difficult because of restrictions imposed by complex regulations.

There are also high administrative burdens on start-ups making it costly for firms to enter the market. Investment restrictions also affect our ability to attract foreign direct investment (FDI).

Sec Karl noted that our available skills needed for digital transformation are below average. We lag in comparison with comparator countries in Asia. This is serious and more difficult to cure quickly than setting up infrastructure.

There is also low adoption for digital payments. Cash remains the main medium of exchange. Adoption of digital payments is also affected by several factors (e.g., low account ownership, lack of a national ID, and limited payment instruments).

Significant segments of the tech sector remain closed to foreign investment given the lack of legal clarity. This is a deterrent to faster innovation and growth.

Sec Karl offered some solutions. At least we know the government knows the problems and how to solve them.

Reduce the digital divide by lowering barriers to market entry and increase available spectrum for internet connectivity.

Streamline permit requirements for network deployment to reduce cost.

Increase the adoption of digital payments by accelerating the PhilSys and developing a policy to incentivize the use of e-payments.

Improve the business environment and level the playing field through the implementation of the Ease of Doing Business and Efficient Government Service Delivery Acts.

Maximize the potential of two important laws recently passed: The Innovative Start Up Act (RA 11337) and the Innovation Act (RA 11293).

Introduce additional reforms, namely: Amendments to the Public Service Act; amendments to the Foreign Investment Act; Open Access in Data Transmission Act.

Hay naku. Alam naman pala what to do. The next question is, when will they do all that? Will the President certify those pending bills?

As I noted in the webinar, it is easy to make good presentations or make good plans. The problem is execution.

But with luddites worse than me on top of DICT, we cannot reasonably hope to see anything in the next two years. If only DICT is placed under the economic team controlled by Sec Sonny Dominguez, maybe some change for the better can be expected sooner.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco