TECH4GOOD
The recently released 2023 Network Readiness Index (NRI) shows that the Philippines has improved its ranking, moving up two spots from 71st in 2022 to 69th this year. The country is just one of the three ASEAN member states that moved up in the ranking in the latest report. However, there is still a long way to go to catch up with the other countries in the region, where the Philippines is ranked sixth after Vietnam. Why is it essential for the country to improve its NRI ranking?
The Portulans Institute’s annual NRI report is in partnership with Said Business School, University of Oxford. The report measures how thriving countries are prepared to use information and communication technologies (ICTs) to boost their economic growth and competitiveness. It is a platform that unveils the intersection of technology and social progress.
The 2023 NRI shows the strengths of the Philippines as well as the opportunities where it can further improve its ranking. The country's incremental improvement in the NRI is attributed to its strong performance in the Impact pillar, which measures the effect of ICT on economic growth, social inclusion, and citizens’ quality of life and well-being.
The Philippines also performed relatively well in the People pillar, which measures how individuals and businesses benefit from using ICTs and the quality of the government’s delivery of online services. The ranking would have been better if not for the low expenditure on R&D performed by both the government and higher education institutions relative to the country’s GDP.
The NRI also highlights two areas where the Philippines did exceptionally well, ranking first: e-commerce and high-tech exports. These speak well of the fast growth of e-commerce in the country and the global competitiveness of its semiconductor sector, including its digital creative products such as software.
However, the Philippines still needs to improve on its weakest pillars: Technology, where it is ranked 84th, and Governance, where it is ranked 85th. In the Technology pillar, Malaysia, Thailand, Indonesia, and Vietnam are all ranked in the 40s, while in the Governance pillar, all four are ranked in the 50s to 60s range. Singapore is not included in the comparisons as it is ranked second in the NRI.
The Technology pillar measures the availability and affordability of digital infrastructures and services and the country’s adoption of emerging technologies such as artificial intelligence (AI) and the Internet of Things (IoT). The Philippines achieved decent scores in most indicators, but its overall score for the pillar was pulled down by handset prices, where it ranked 131st and had a low number of internet domain registrations (ranked 102nd).
The fourth pillar, Governance, is another opportunity for the Philippines. While it ranked first in e-commerce adoption, its scores in two sub-pillars, ICT regulatory environment (109th) and rural gap in the adoption of digital payments (117th), were way below in the rankings.
Overall, the Philippines’ ranking in the 2023 NRI suggests that the country is making progress in its digital transformation and is starting to bear benefits for its citizens. However, there is still considerable room for improvement to be at par with the top five ASEAN peers, including Vietnam.
To achieve that, the Philippines could focus on expanding broadband access, improving mobile connectivity, reducing the cost of devices and ICT services, and promoting the inclusive adoption of digital financial services.
It will need to promote strong adoption of emerging technologies, which may involve investments in research and development, AI-enabled education system, upskilling its workforce, supporting businesses in their digital transformation initiatives, and raising public awareness of the benefits of emerging technologies.
The Philippines needs to strengthen the regulatory and policy environment for ICT. This would include policies that ensure the digital landscape is trustworthy, protect consumer rights, and promote data privacy. It should implement new policies to encourage further competition in the ICT sector, including fair access to infrastructure, and strengthen the drive to remove barriers necessary to accelerate the deployment of additional infrastructures.
Finally, I would like to reiterate the call of the business sector to carry out policy reforms in the country’s spectrum management landscape, which is necessary for the Philippines to enjoy the power of new wireless technologies such as 5G and 6G.
It will be a big challenge for the Philippines to position itself as a competitive investment destination globally if it is seen as a laggard among its peers in the region. If we want to capture the attention of global big names now looking for options outside of China, we need to improve on the factors that matter to them. ([email protected])
(The author is an executive member of the National Innovation Council, lead convenor of the Alliance for Technology Innovators for the Nation (ATIN), vice president of the Analytics and AI Association of the Philippines, and vice president, UP System Information Technology Foundation.)