Information Technology
Philippines
Overview
(In $ Millions)
2004 2005 2006 (estimated)
Total Market Size 4.23 billion 4.03 billion 4.30 billion
Total Local Production 7.47 billion 7.63 billion 7.60 billion
Total Exports 7.47 billion 7.63 billion 7.60 billion
Total Imports 4.23 billion 4.03 billion 4.30 billion
Imports from the U.S. 185 184 186
(Notes: 2004 and 2005 are actual figures taken from National Statistics Office. 2006 data are estimates gathered from industry experts. According to industry sources, recorded exports include parts, disks and recorded media, among other items, which are locally assembled at Export Processing Zones and re-exported. That is, none of the locally assembled IT products are sold in the domestic market. Total Local Production therefore equals Total Exports.)
The Philippine IT industry remains bullish, primarily as a result of the continued growth of the Business Process Outsourcing (BPO) industry. The Secretary of Trade announced that the BPO industry posted $3.6 billion in revenue and 244,675 jobs in 2006.
The GRP acknowledges the significance of IT development in the country and its role in economic growth by undertaking measures to promote ICT consciousness, capacity building, and provide a conducive information and communication technology (ICT) environment for business, public administration, services delivery, education, and communications. Below are some of the GRP’s efforts to cultivate ICT development:
· The CyberServices Corridor – included in President Gloria Macapagal-Arroyo’s ten-point agenda declared during the State of the Nation Address (SONA). The CyberServices Corridor is an ICT channel running over 600 miles across the country, from Baguio City in the North to Zamboanga in the south of the archipelago. This is supported by a $10 billion high bandwidth fiber back-bone and digital network, and is home to numerous cyberservice providers that supply expert services in various fields of ICT like business process outsourcing (BPO), contact centers, animation, medical and legal transcription, software development, e-learning, e-entertainment and gaming and other back office operations (e.g. finance and accounting, human resource development, etc.)
· In November 2006, the Inter-Agency Committee on ICT Statistics was formed to provide policy assistance and guidance for the value estimation of e-Commerce transactions, ICT satellite accounts, and ICT statistics.
· Computer for All Initiative - to increase number of computer and internet users by bringing down cost of computing
· Community eCenters - to provide the general public with access points for the delivery of e-government services and affordable access to a variety of ICT services
· e-University Network in Human Resource Development (HRD) - this is an APEC project as a center of excellence in HRD for e-Government through e-Learning vocational courses/system by using new networking technology
With PC penetration estimated at 4.5 per 100 population in 2004 and Internet penetration rate at 9.3% - translating to 7.8 million Internet users, there is still much room for IT development in the Philippines. Latest data from the National Statistical Coordination Board (NSCB) shows the Philippines ranked fairly in various ICT indices released by international groups. Detailed rankings may be found in the NSCB’s website (http://www.nscb.gov.ph/factsheet/pdf06/fs11_06.asp). Among the metrics used is e-Readiness where the Philippines ranked poorly, number 51 out of 65 countries sampled. e-Readiness assesses the countries ability to promote and support digital business and ICT services and measure the extent to which a market is conducive to Internet-based opportunities. The Philippines low e-Readiness marking can be attributed to low connectivity (broadband and wireless internet connection) and low PC penetration.
Internet connectivity is through PCs at home, school, in the office, or in Internet cafés. 75% of Internet users still access the net through dial-up connections, though broadband and wireless services continue to post increasing number of subscribers. Further growth is expected in the next two to three years.
Best Prospects/Services
- Networking Systems/Solutions (servers, LAN, WAN)
- Enterprise Software (CRM, ERP)
- Broadband Solutions
- Wireless Applications
- Innovative Applications
- VoIP
- Workforce Management
- Call Recording Systems
Opportunities
A report prepared by callcentres.net estimates 70% of call centers in the Philippines are expected to purchase new technologies in 2007, and top technologies to be purchased will VoIP, workforce management and call recording systems.
Apart from call centers and BPO’s, corporations (local or multinational), small-to-medium businesses and the education sector are also expected to maintain steady ICT purchases to maintain quality business processes.
Another major growth segment for the IT industry is computer gaming – both PC-based and online. This segment has renewed the “Internet Café” business in the Philippines. Computer gaming, particularly, online gaming, is cutting across social boundaries (gender, age, economic class) and is driving growth in computer literacy.
Resources
For additional information on the latest developments in the IT industry, please refer to Commission on Information and Communications Technology (CICT) - http://www.cict.gov.ph, Business Processing Association Philippines (BPAP) - http://www.bpap.org, and the Computer Manufacturers Distributors and Dealers Association of the Philippines (COMDDAP) - http://www.comddap.org
Aida L. Miranda, Sr. Commercial Specialist
U.S. Commercial Service, Philippines
Email: Aida.Miranda@mail.doc.gov , Manila.Office.Box@mail.doc.gov