Republic of the Philippines

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Republic of the Philippines

• Where the East meets the West
• Renee Dobson
• Arpitha Reddy
• Desi Segundo

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The Philippines
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IT-led Development in the Philippines
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Environmental FactorsSocial / Political

• Population 84.5 million (July 2003)
• Capital City Manila (Pop 10 million)
• People Predominantly descendants of Malays,
  Chinese and Muslim
  minorities and a number of Mestizos
  (Filipino-Spanish or Filipino-Americans)
• Language Filipino. English and Spanish. Also
  numerous widely spoken
  indigenous languages.
• Religion 82 Roman Catholic, 9 Protestant, 5
  Muslim, 3 Buddhist
• Government Republic

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Environmental FactorsEconomic

• GDP 356 billion (2002)
• GDP Growth in the 1990s suffered due to
  the Asian Financial Crisis Poor Weather.
  Public sector has a debt of double the countrys
  GDP due to this crisis.
• Real Growth Rate GDP (2002) 4.6 Real Growth
  Rate GNP (2002) 5.2
• Gini Index 46.2 (1997) USA 40.8 (1997)
• Percentage below Poverty Line 40
• Currency Philippine Peso
• Exchange rate P 52.30/US (May 2003)

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Industry Structure

• Industry Textiles Garments, Pharmaceuticals,
  Chemicals, Wood Products, Food Processing,
  Electronics Assembly, Petroleum Refining
  Fishing.
• Top 5 Exports (as of total exports)
  
  Electronic Components (54.0), Apparel and
  Clothing Accessories (6.8), Ignition Wiring Set
  (1.5), Woodcrafts and Furniture (1.2), Metal
  Components (1.2)
• Exports partners (2002)
• US 24.9,
• Japan 15.0,
• Netherlands 8.8,
• Taiwan 7.1,
• Singapore 7.0

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Industrial PolicyEducation / Skills

• Philippine education is patterned after the
  American system, with English as the medium of
  instruction. Schools are classified into public
  (government) or private (non-government).
• The general pattern of formal education follows
  four stages Pre-primary level (nursery and
  kindergarten) offered in most private schools
  six years of primary education, followed by four
  years of secondary education. College education
  usually takes four, sometimes five and in some
  cases as in medical and law schools, as long as
  eight years. Graduate schooling is an additional
  two or more years.
• Computer technology/ literacy is only available
  in private elementary and high schools due to
  cost.
• Most colleges / universities are able to provide
  computers technology / literacy. In fact,
  computer literacy classes have been included in
  the curriculum.

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Industrial PolicyInfrastructure

• Total number of main telecommunication lines
  increased to 6.98 million in
• 2001 from 3.3 million in 1996
• Teledensity ratio ( of installed lines per 100
  people) 9.9
• Implementation of Service Area Scheme to make
  sure that all regions have access to the network.
• Current Domestic Telecom Players
• PLDT (Philippines Long Distance Telephone
  Company) Islacom, Globe Telecoms, Smartcom,
  Digitel, Philcom, Capwire and PTT, Eastern
  Telecom (ETPI), Piltel, Atlas Telecom and
  BayanTel
• PLDT accounts for 67 of the telephone service in
  the country

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Industrial PolicyInfrastructure

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Industrial PolicyTechnology Policy

• In July 1994, President Fidel V. Ramos approved
  the National Information Technology Plan.
• The National Information Technology Council
  (NITC) was constituted to oversee the
  implementation of the Plan, now called the IT
  Action Agenda for the 21st Century (IT21), the
  country's blueprint for IT development.
• IT21 was approved on October 28 1997, as the
  Philippines' guide for IT development in the
  country over the next 7-15 years.
• Its overall goal and vision of the country is to
  transform the Philippines into a "Knowledge
  Center in Asia.1

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Industrial PolicyTechnology Policy

• The plan sets forth an agenda to
• Develop the information infrastructure for
  interconnection and networking within the country
  
• Turn the Philippines into an Asian hub of
  software development and training
• Improve the government's capacity and efficiency
  in adopting IT to help in governance of the
  country and help spur the growth of the
  Philippine IT industry
• Develop and adopt IT in education, in both the
  public and private sector, as well as training
  institutions, to create a critical mass of IT
  professionals and an IT-literate workforce
• Upgrade available IT resources in the local RD
  sector
• IT21 relies on both the government and private
  industry to play leading roles in pushing forward
  IT use and IT production in the country

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Industrial PolicyTechnology Policy

• The Information Technology Agreement (ITA) was
  formed to eliminate tariffs on information
  technology by the year 2000
• The Philippines has already reduced the duties on
  selected IT products to 3. This began in 1995
  and continued until the year 2000.
• A final goal of this agreement is a uniform duty
  of 5 which will be introduced by the year 2004.
• Another government initiative, pushes for the
  interconnection of local Internet Service
  Providers into one Internet exchange
• This exchange, called the RPWEB, puts the entire
  government organization online.
• On November 7, 1997, the President directed all
  government agencies down to the local and field
  levels to interconnect through the Internet.

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IT DiffusionIT Production / Use

• PLDT (Philippines Long Distance Telephone
  Company) offers Integrated Voice and Data
  Services include Diginet (domestic leased line),
  Fibernet (international leased line), DataPac
  (international and domestic packet switching),
  PhIX (Philippine Internet Exchange) and ISDN
  (Integrated Services Digital Network). The Voice
  and Messaging Services include VideoCon (video
  conferencing) among others.
• PLDT is part owner of an existing fiber optic
  submarine cable systems.
• Cables connect the Philippines to the rest of
  Asia and to the rest of the world via these 20
  gig cables.
• A new backbone network has been installed
  allowing PLDT ability to offer new services such
  as Voice over IP, VPNs and unified messaging.

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IT DiffusionIT Use

• Cellular teledensity has risen to 27 of all
  telephone subscribers in the country
• A leading adopter of Cellular technology - Text
  messaging has been available for the past 5 years
  and the picture phone for the past 3
• Companies Smart Globe

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IT DiffusionIT Use E-commerce

• Internet users estimated to be 4.5 million.
  (2002)
• Philippines Internet Exchange (PHiX) allows local
  ISPs to access and exchange local internet
  transactions w/o accessing the global internet.
• This network solves the problem of dropped data
  and also decreases the time data is sent between
  Philippine companies.
• The number of Philippine ISPs increased from 19
  in 1995 to 88 in 1996, and to over 160 by the end
  of 1997. The number of ISPs in the country is now
  estimated to be around 190. (1999)

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IT DiffusionIT Use

• Software Development
• The software and services subsector has been a
  consistent export winner.
• With export revenues reaching US206 million in
  1996, up by 51 from the US125 million in 1995,
  which was a phenomenal increase from the US66
  million in 1994. Target exports by year 2000 is
  US300 million.
• Most of the country's software exporters only
  serve as subcontractors for bigger software
  producers in other countries such as the United
  States.
• Though the IT21 Agenda is making efforts to
  increase the nation's niche market in software
  production, still, many major players are US
  owned businesses who have decided to move their
  software services in the Philippines for the
  Asia-Pacific region. Some of these players are
• Computer Associates Philippines
• Linux Philippines Corporation
• Microsoft Philippines
• Oracle Philippines

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Economic Payoffs?Strengths Weaknesses

• Strengths
• Well-educated, competent, reliable and
  price-competitive labor
• English proficiency within the nation
• Growing record of successful IT work
• Fast-growing telecom infrastructure
• Government interest in the industry
• A democratic government system fostering
  flexibility and creativity
• Less regulation than some neighbor countries
• Large investment interest from the foreign and
  private sector
• Creation of a special IT office complex to give
  the IT industry incentives to grow through
  tariff-free imports of capital equipment and
  simplified tax returns
• Quick adopter of new technologies

• Weaknesses
• Power and wealth distribution Too many people
  are either very rich or very poor
• Lagging behind in basic infrastructure w/ limited
  access to networks
• Inefficiencies of current ISPs network Too
  much downtime as PhIX had to be adopted just to
  keep local e-commerce business up and running
• A scarcity of middle to high-end IT professionals
• Difficulties marketing the nation and the
  industry globally
• Capital cost and scarcity of monies available
• A small domestic market
• Insufficient IT education
• Competition from neighboring countries such as
  Malaysia or India which both have strong IT labor
  forces already established infrastructure more
  equipped to handle IT demands

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Recommendations

• General
• Continue to increase teledensity widen coverage
  nationwide
• Continue to expand the telecommunications
  infrastructure across all urban rural areas
• Increase computer technology and literacy -
  People must be taught how to use computers at an
  earlier age
• Increase computer schools, training facilities
  computer science engineering degree programs
  within Universities
• Accelerate the deregulation of government
  ownership, provision direct operation of
  telecommunications services
• Specific
• Adoption of the Mondex Card - use it in
  conjunction w/ a smart chip to eliminate the use
  of other cards information
• Increase the use of E-Commerce - although still
  in its infancy very pricey there is a
  government initiative to reduce the cost of it

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Resources

• CIA The world factbook http//www.cia.gov/cia/pu
  blications/factbook/index.html
• Information Technology Association of Philippines
  http//www.itaphil.org
• The Official Government Portal of the Philippines
  www.gov.ph
• Information Technology in the Philippines
  http//www.american.edu/carmel/bree/
• Gervacio Brondial director of kodaly program
  California State University