With a population of more than 100 million people, the Philippines is the thirteenth largest Internet audience in the world. As such, it has a huge potential when it comes to B2C (business-to-consumer) eCommerce development.
About half of the population is below 28-years-old, which means they are likely tech-savvy consumers. Less than 10% of adult Internet users in the Philippines relied on the Internet to make online purchases in 2014.
Even with this, online shopping and other related businesses are expected to get a boost with increasing Internet and smartphone penetration. But, as most of us experience daily, Internet speed has always been a problem.
Not Just a Connection Problem
The Philippines may be one of the fastest-growing economies in Asia, but it also has the slowest Internet in the region. Philippine Chief Justice Maria Lourdes Sereno even pointed this problem out during the recent 2015 Manila Social Good Summit.
“The Philippines has become the leading social media user in the world even if our Internet bandwidth is horrifyingly narrow and outrageously slow… This is a negative shoutout to the two major telcos,” the Chief Justice was quoted as saying in a report from Rappler.
Senator Benigno Paolo “Bam” Aquino IV echoed the same sentiments, adding that the growing Internet problem could be hindering the country’s full economic growth potential. Aquino is the chairperson of the Senate Committee on Trade, Commerce, and Entrepreneurship.
“When it comes to our quest for better Internet, we are talking about making the lives of our micro, small, and medium entrepreneurs easier… The facets of the Internet go beyond just communications. If we want to grow this country, we have to solve this Internet issue fast,” Aquino was quoted as saying.
He adds that to boost connection speed, we need more market competition and better infrastructure. “With competition, services will be better, prices will be lower, and the consumers will be winners,” he said.
ECommerce, Economy Growth
Better Internet services can only mean good things for consumers and businesses. For one, faster Internet connections can aid in the further growth of mobile shopping and social commerce. According to recent statistics from 2014, a high double-digit share of online shoppers in the country used their phones to make purchases, more than any other country in Southeast Asia.
Moreover, online users in the Philippines are some of the most engaged in social media by global standards, making social networks an important, potential-filled platform for online sellers. Lazada.com.ph, for example, has more than 12 million fans on its Facebook page, making it the second most popular Facebook page in the country—the only online retailer or business to make it on the Top 10 list.
Internet connectivity is also an issue that may be discussed in the upcoming Asia-Pacific Economic Cooperation (APEC) Summit. The Department of Foreign Affairs also said better Internet connectivity is crucial in boosting the region’s agenda on inclusive growth and sustainable communities.
A Push to Improve Services
One way the government is pushing the private sector to improve Internet services is by offering free Wi-Fi services nationwide. The government aims to provide the free connection to half of its towns and cities by the end of 2015, and nationwide coverage before the end of 2016.
This free service will cost the government around 1.5 billion pesos every year and will be available in hospitals, public schools, airports, parks, and other public properties. “If subscribers move to using free public Wi-Fi, telecoms may need to lure them into getting higher-end services,” Information and Communications Technology Office Deputy Executive Director Monchito Ibrahim said in an interview.
This new service is seen to lower data charges in the country. According to research firm International Data Corporation (IDC), Philippine consumers pay about US $18/Mbps. That’s about Php840/Mbps or more almost four times more than the global average of US $5 (Php230).
From the commercial perspective, the expensive Internet service has minimal impact on potential foreign investments. For consumers, however, it’s a big problem, as most of us are forced to pay big bucks for better services.
A Step in the Right Direction
In another move to improve IT connectivity, the government tapped the Philippine Long Distance Telephone Company (PLDT), the country’s largest telecommunications company, to help in providing the public hassle-free and faster services.
On September 7, PLDT became the third physical connection point of the Philippine Open Internet Exchange (PHOpenIX) with the signing of a memorandum of agreement with the Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO) and the Advanced Science and Technology Institute (ASTI).
This partnership will allow government websites to be locally peered and enable faster Internet speed in the country. Users can connect to government websites faster, and data sent to such websites no longer have to leave the country to reach its intended recipient, which means fewer security risks and faster data transfer.
PHOpenIX was also designated as the official Government Internet Protocol Exchange (G/IPX). Furthermore, the Philippine Health Insurance Corp. (PhilHealth) has partnered with PLDT Alpha Enterprise for the upgrade of the government agency’s regional and local offices. The agreement will ensure all PhilHealth offices will be using Internet Protocol-Virtual Private Network (IP-VPN) technology that will improve frontline operations.
With the recent remarks of Facebook founder Mark Zuckerberg saying Internet access can end poverty, the problem with our slow Internet connection becomes all the more crucial. Free Wi-Fi access, IP peering, and other small steps help in achieving better IT services for all, but what we need is a more comprehensive, long-term plan to improve Internet connectivity. Change will come—we just have to keep pushing for it.