A consumer advocacy group urged the national government to look into the country’s fee structure on telecommunications providers, saying the existing system hinders the growth of digital infrastructure and threatens to leave millions of Filipinos disconnected.

CitizenWatch Philippines is referring to the Spectrum User Fee (SUF) system, an annual cost on telecommunications providers based on the frequency bandwidth they are assigned.

CitizenWatch Co-convenor Orlando Oxales explained that the SUFs are calculated based on the size and type of spectrum assigned to telcos, with higher fees incurred for wider bandwidths and more commercially valuable frequency bands. 

"As more Filipinos use mobile data for work, education, and digital transactions, telecom firms must acquire more spectrum to ensure service quality—but doing so automatically triggers higher SUF payments," Oxales said.

"The system may have been relevant before, but now, it has become a barrier as it discourages investments and penalizes growth at a time when expansion is most needed," he added. 

In a statement released this week, CitizenWatch highlighted the country's widening digital infrastructure gap, noting that internet penetration—which is the percentage of a population that has access to and uses the internet—in the Philippines remains significantly lower than that of its regional counterparts. 

According to Oxales, the government’s target of achieving nationwide internet access will not be achieved unless structural barriers—such as the existing SUF regime—are addressed.

Under the current system, telecommunications companies are charged annual fees based on the amount and type of spectrum they are assigned. 

From 2018 to 2022, SUF collections reached ₱26.9 billion, peaking at ₱6.7 billion in 2022. 

While the policy is meant to regulate spectrum allocation, CitizenWatch argued that the escalating costs are disproportionately burdensome, particularly as demand for mobile data continues to increase.

The group also warned that this fee model discourages innovation and slows progress toward nationwide connectivity goals, adding that the imbalance between public and private sector spending on digital infrastructure.  

CitizenWatch compared the Philippines’ limited public investment to more aggressive infrastructure programs in neighboring countries such as Vietnam and Indonesia, both of which have prioritized broadband expansion to remote areas.

"These countries understand what the Philippines must also embrace: digital infrastructure is not merely a commercial concern—it is a strategic national asset,” Oxales emphasized.

To address these challenges, CitizenWatch called for the rationalization of SUFs to reflect their intended regulatory purpose of managing spectrum efficiently rather than serving as a revenue-generating mechanism. 

The group proposed lowering the fees to encourage telecommunications providers to invest in underserved and unserved areas.

"Lowering SUFs will unlock more capital for telcos to invest in new cell sites, backbone upgrades, and last-mile connectivity, accelerating the nation’s transition to a fully digital economy," Oxales stressed.

“These infrastructure investments directly translate to greater digital access for more Filipinos—especially critical at a time when the digital economy is rapidly growing and expanding opportunities across sectors,” he added. 

CitizenWatch said that pairing SUF reforms with increased public investment and streamlined permitting under Executive Order No. 32 would demonstrate a "whole-of-nation" approach to closing the digital divide.

"If we are serious about inclusive growth, digital empowerment, and long-term competitiveness, we must stop taxing connectivity and instead incentivize more investments for it,” the group said.