Filipinos are paying one of the most expensive, but slowest Internet services in the world, a joint study by the World Bank and the National Economic and Development Authority (NEDA) revealed.
Based on the “A Better Normal Under COVID-19: Digitalizing the Philippine Economy Now” report, the Philippines lags behind neighboring middle-income nations in terms of two key indicators pertaining to Internet services.
According to the report, 57 percent of Filipino households, or 12.2 million families, are still not connected to the Internet, while those who have access experience slow download speeds.
The average mobile broadband download speed in the country is only 16.76 megabytes per second (mbps), well below the global average of 32.01 mbps.
Its 3G/4G mobile average download speed of 7 mbps is also behind the ASEAN average of 13.26 mbps.
In terms of prices, the cost of a fixed broadband plan in the Philippines is close to the cost of similar plans in Singapore and Thailand, or countries which have the fastest speeds in the region.
For prepaid, handset-based mobile broadband, a 500 megabyte Internet service is costing $6.3 a month in the Philippines, the fourth highest in ASEAN after Singapore, Brunei, and Malaysia.
The World Bank and NEDA report traced the country’s Internet woes on anemic digital infrastructure, long-standing duopoly in the telecommunications sector and outdated regulatory rules.
Another issue raised by report is the country’s designation of telecommunications as public utility, which effectively limited foreign ownership and placed a cap on the rate of return.
The report also identified the low transaction account ownership, the lack of a national ID, underdeveloped payment infrastructure, and the perceived risk of digital transactions as restricting the wider adoption of digital payments.
These constraints, the report said, have resulted in slow adoption to digital technologies in the Philippines, which are important to overcome and recover from the COVID-19 pandemic as well as achieve its vision of becoming a middle-class society free of poverty.
Socioeconomic Planning Undersecretary Rosemarie G. Edillon said the COVID-19 has caused substantial disruptions in the mostly analog Philippine economy as community restrictions have limited movement of people and reduced business operations nationwide.
“As we are now living with the new normal, the use of digital technology and digital transformation have become important for Filipinos in coping with the present crisis, moving towards economic recovery, and getting us back on track towards our long-term aspirations,” Edillon said.
Ndiame Diop, World Bank Country Director for Philippines, also noted that Internet connectivity in the country – the foundation of the digital economy – is limited in rural areas, and where they are available, services are relatively expensive and of weak quality.
“Upgrading digital infrastructure all over the country will introduce fundamental changes that can improve social service delivery, enhance resilience against shocks, and create more economic opportunities for all Filipinos,” Diop said.
Kevin Chua, World Bank economist, meanwhile, raised the need of digital adoption by the government, businesses, and citizens.
Chua explained the digital adoption is critical, not only to help the Philippines adapt to the post-COVID-19 world, but also to achieve its vision of becoming a society free of poverty by 2040.
“The government can take the lead by speeding up e-governance projects, such as the foundational identification system and the digitization of its processes and procedures, which will help promote greater inclusion, improve efficiency, and enhance security,” Chua said.
“Moreover, the government can take an active role in fostering policies that reduce the digital divide and create a more conducive business environment for the digital economy to flourish,” he added.