Think tank Stratbase ADR Institute urged the government to invest in broadband infrastructure to boost the competitiveness of the country in the global digital economy.

Stratbase president Prof. Victor Andres “Dindo” Manhit said that digital transformation has always been a priority of this administration.

"But the government needs to allocate more resources to upgrade the national broadband infrastructure," he said.

The Stratbase chief explained that these actions could include expanding fiber-optic networks, deploying 5G technology, and improving last-mile connectivity to reach underserved communities.

Manhit emphasized that broadband infrastructure acts as the channel for digital data, enabling communication in commerce and social services, and fostering constant innovation.

“Business will be able to grow and expand, entrepreneurs will be given room to innovate, and individuals will be able to use information that they could use for educational and economic advancement,” he said.

He reiterated the Private Sector Advisory Council's (PSAC) request to increase the Department of Information and Communications Technology's (DICT) budget to P240 billion.

Over the six years from 2018 to 2024, the budget had totaled only P7.6 billion.

Manhit also noted that the transformative potential of broadband infrastructure can be best harnessed by the Philippines’ young and digitally savvy population, although all segments of society will benefit from digital transformation.

“Broadband connectivity is no longer a luxury, something that is nice to have or an added feature,” Manhit added. “Internet connectivity is an indispensable utility of a digital economy,” he said

“Access to fast and reliable broadband services is a fundamental requirement for full and meaningful participation in the digitalized global economy," he said, noting that the country loses significant real and potential benefits if it does not address the gaps in its digital infrastructure.

2.1% increase in internet users

Meanwhile, according to data from datareportal.com, there were 86.98 million internet users in January 2024, showing an increase of 1.8 million users (2.1 percent) compared to the previous year.

"However, the remaining 31.24 million individuals did not use the internet during this period, which translates to a good 26.4 percent of the population remaining offline," Stratbase said.

The think tank pointed out that despite the best efforts of private telecommunications companies in the Philippines, challenges persist in the digital sector.

Broadband penetration rates and internet speeds lag behind those of other countries in the region.

“The Philippines’ tremendous potential in the global economy stands to be undermined by the digital divide,” Manhit said.

Broadband investment gap

According to the World Bank, there is a significant broadband investment gap in the Philippines, estimated to be around $2 billion or P110 billion per year.

Due to low investments in connectivity, broadband services in the Philippines remain expensive, with slow speeds, and a considerable portion of the population lacks access to mobile broadband.

“The cost of inaction—loss of growth opportunity, people remaining unequipped for future jobs, and widening of the digital divide—are avoidable. Outdated policy and regulations have long stunted the growth of the country’s broadband industry and expansion of digital infrastructure,” the World Bank said in a report.

Moreover, the country has been investing less than one percent of its annual gross domestic product (GDP) in telecom infrastructure. Investments declined from 0.64 percent of GDP in 2018 to 0.44 percent in 2022.

To address these challenges, the institute underscored that substantial increases in budget allocations for broadband infrastructure are crucial.

Investment in digitalization is necessary to promote digital inclusivity, stimulate economic growth, and enhance global competitiveness.

It will also provide Filipinos with reliable internet access, catalyze innovation, and pave the way for a resilient, digitally enabled society.