2005/2006
2003/2004

2005/2006
2003/2004

2005/2006
2003/2004

Emmanuel C. Lallana

Overview

The Philippines is an interesting case study for ICT development led by the private sector. Unlike Singapore or Malaysia, where the state plays a dominant role in charting and jumpstarting ICT use and growth, the Philippine government plays a supporting role to the private sector. Recent strides in ICT development were achieved under a policy of liberalisation, competition and deregulation.

It is also noteworthy that while the country has a vibrant civil society, non-government and people’s organisations have not undertaken significant ICT initiatives for development. This is in contrast with Indonesia, an archipelago like the Philippines, where there are numerous interesting grassroots ICT initiatives.

Telecommunications and information infrastructure

The telecommunications and information infrastructure in the Philippines is still relatively underdeveloped and largely concentrated in metropolitan areas. Low PC penetration, relatively high Internet access costs and bandwidth limitations have slowed down the adoption of the Internet for higher-end uses.

Telephony and teledensity

The telecommunications industry was deregulated in 1987 after over 70 years under a private monopoly. By 2001, teledensity stood at 10.91 per 100 people. This represented a 900 percent jump from 1993. In that year, the government implemented the Service Area Scheme, which required the installation within three years of 300,000 land lines by new international gateway facility operators, 400,000 land lines by new cellular licences and 700,000 land lines by firms with both cellular and gateway licences. It further required that a portion of these new land lines be installed in rural areas. As a result, there are 6,634,934 land lines installed nationwide by 2002. However, only around three million of these lines are actually subscribed, due in part to high upfront costs and the growing preference for cellular mobile phones. In fact, the number of cellular mobile users has soared dramatically, from 959,024 in 1996 to over six million in 2000. Currently, the estimated 12 million Filipinos with cellular phones send an average of 130 - 150 million text messages a day using short messaging service (SMS). The Philippines’ 240 text messages per subscriber per month is significantly higher than Hong Kong’s 4 text messages.

PC penetration and Internet access

PC penetration is estimated at 1.9 for every 100 persons; Internet penetration is at 6 for every 100 persons (or 4.5 million of the total 76.5 million Filipinos). Of these Internet users, 3.1 million (about 70 percent) are said to access the Internet using prepaid cards at Internet cafés.

Two recent ACNielsen reports give a deeper insight on Philippine Internet users. Its "Activate" survey show that the majority of Filipinos between 13 and 30 years old access the Internet daily for at least an hour after work or school (and usually before bedtime). Heavier use has been observed during weekends, where they spend two to three hours mostly surfing or playing games. The other survey, NETScan, reveals that as of the second quarter of 2002 an estimated 6 percent of the total urban population is using the Internet, almost half of whom are based in Metro Manila (or 11 percent or 900,000 of the population in Metro Manila). Over half of those with Internet access belong to the upper and middle economic classes, although there is substantial representation from "Class D". This means that the upper and middle economic classes account for almost two out of three users.

There are an estimated 191 ISPs nationwide, mostly operating in urban areas, with 20 percent in areas with export processing zones. However, there are only about five Tier 1 ISPs. There are also three Internet exchanges, which are all located in Metro Manila. The subscriber base to date of these ISPs is approximately 1,850,000.

It has been noted that "Internet-wise, the Philippines is part of the US Internet at the end of a very long string across the ocean". This observation is based on the fact that "foreign (mostly US) traffic makes up 90 percent of the consumers’ consumption" and that "connectivity to other Asia-Pacific countries is a small fraction compared to the US connection". . . . . the complete text of this chapter is available for purchase and immediate download as a PDF file, please click here for more information.

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