PHL risks getting left behind as internet remains slow, expensive

THE Philippine digital economy may fail to realize its full potential, as digital infrastructure remains weak and internet speeds are among the slowest and most expensive in the world, a report by the World Bank and National Economic and Development Authority ( NEDA) showed.

During the launch of the “Philippines Digital Economy Report 2020” on Monday, World Bank Economist and Task Team Leader Kevin C. Chua said ramping up digital adoption in the Philippines would help it become more efficient and competitive, its local businesses to be more resilient and economic growth to be more inclusive.

“In the Philippines, COVID-19 ( coronavirus disease 2019) has accelerated the adoption and use of digital technologies. However, digitalization is largely constrained by the country’s low high-speed broadband penetration, which lags behind neighboring middle- income countries,” the World Bank and NEDA said in the report.

The report noted the Philippines has a big digital divide, with around 60% of households having no access to the internet.

“Digital infrastructure is limited in remote and rural areas, and where they are available, the internet services are relatively expensive and of poor quality. This has led to a digital divide between those with and without access to reliable internet, which contrib

utes to unequal access to services that are delivered via the internet. The unequal access to the internet poses a challenge to the effective and intended delivery of digitalization,” the report read.

Mr. Chua said the internet is more expensive in the Philippines compared with some of its ASEAN peers, with the entry-level fixed broadband costing 6.5% of gross national income (GNI) per capita in the country against the 2% recommended threshold by the United Nations Broadband Commission.

Download speeds also remain to be among the slowest in the region. Mr. Chua noted the country’s mobile broadband speed at 16.76 megabits per second (Mbps) is significantly lower than the 32.01 Mbps global average. Fixed broadband average speed is at 26 Mbps compared with the regional average of 59 Mbps.

Mr. Chua said 3G remains the dominant connection for mobile broadband, with average download speed at 7 Mbps compared with the 13.2 Mbps regional average.

“Moreover, at $6.30 per month for 500 MB of prepaid, handset based mobile broadband, the Philippines has the fourthhighest cost next to Singapore, Brunei, and Malaysia. Surprisingly, despite middling in terms of fixed broadband speed, the cost of a fixed broadband plan in the Philippines is close to the cost of similar plans in Singapore and Thailand, countries which have the fastest speeds in the region,” the report read.

Despite high internet usage among Filipinos, the report said the country’s digital adoption lags behind most Association of Southeast Asian Nations ( ASEAN) neighbors.

“[Based on the] World Bank’s digital adoption index in business, people, and government, the Philippines falls behind the world average on digital adoption and it performs poorly compared to some of our regional neighbors like Thailand, Malaysia and Singapore,” Mr. Chua said. —