Weak internet infrastructure in the Philippines constrain the digital potentials of citizens and firms by slowing inclusive recovery and growth and worsening the digital divide, according to a policy note published by the World Bank.
According to the report titled, “Better internet for all Filipinos: reforms promoting competition and increasing investment for broadband infrastructure,” inadequate and antiquated policy environment have created and reinforced a market structure with weak competition and limited investments in rural connectivity infrastructure.
“Unaddressed, weak internet might derail the country’s achieving upper middle-income status in the coming years and its aspiration for a prosperous middle-class society by 2040,” the report said.
According to the study, key policy and regulatory gaps that call for immediate reforms include barriers to market entry and investment; unlevel playing field; rigid and non-transparent spectrum management; and ineffective infrastructure sharing policy framework.
“These are closely interrelated and require comprehensive reforms for meaningful changes in market participants’ incentives and conduct,” the report said.
In the short-term, the World Bank said the passage of the proposed Open Access for Data Transmission (OADT) Act in the 19th Congress is a promising opportunity to reform the Philippines’ decades-old policy frameworks, thereby adapting to technology and business model changes in the broadband value chain.
“To compromise on the breadth and depth of Internet policy reforms would be a missed opportunity to resolve the problems created by regulatory weaknesses,” the report said.
“Once enacted into law, the OADT’s immediate reforms can be an entry point to broader, medium- and longer-term digital connectivity agenda,” it added.
The World Bank pointed out that the cost of inaction–loss of growth opportunity, people remaining unequipped for future jobs and widening of the digital divide–is too high for the Philippines.
“Outdated policy and regulations have long stunted the growth of the country’s broadband industry and expansion of digital infrastructure. As the government prioritizes digitalization with a view toward benefiting all Filipinos, updating policy to promote competition, encourage investment and upgrade broadband infrastructure is urgent and necessary,” it added.
