Conversations on Cloud Episode 2: Accelerating digital infrastructure toward economic growth

Digital infrastructure now sits at the base of daily life. From the moment a person checks a phone to the time a business processes payments, a network of systems operates in the background to form a structure that supports both online tasks and large-scale economic activity.

In the second episode of the BusinessWorld B-Side podcast series titled “Where the Digital World Converges: Conversations on Cloud,” Converge Vice-President and Head of Digital Infrastructure Noriel Ong and Department of Information and Communications Technology (DICT) Assistant Secretary Atty. Christian G. Guingcangco discussed how digital systems affect economic activity.

“If you look at every business, if you look at the way we live on a daily basis, it all depends on the digital infrastructure,” Mr. Ong said. “I believe the country’s competitiveness will definitely rely on how well the digital infrastructure is established.”

Mr. Ong outlined four main components that make up this system: terrestrial fiber networks, international gateways, data centers, and digital platforms.

“All these have to work together to function. What if one of them fails? Everything falls apart,” Mr. Ong explained. “It is very important that the systems are completely integrated to perform their functions.”

From a policy standpoint, Mr. Guingcangco compared today’s investments in digital systems to earlier efforts that focused on roads and bridges. He mentioned that the priority has moved to enabling the movement of data and services.

“In the old days, we were building roads and bridges to move around goods and services,” he said. “But right now, we’re building digital infrastructure, basically the information highways to move around ideas and capital.”

Such change now allows businesses to operate beyond their immediate location. The access improves business capacity and opens opportunities that were not available in earlier systems.

Addressing bottlenecks

Despite progress in connectivity, barriers still hold back development.

One of the most common problems involves right-of-way access. Mr. Ong said this issue often delays the installation of cables and poles, especially in densely populated or privately owned areas. Without clear and faster approvals, projects face long timelines before construction even begins.

“The government plays a very important role in this for the right-of-way issue, especially if we’re talking about a critical infrastructure. In other countries, some governments have a process designed for the critical infrastructure such as data centers and the fiber networks. Just like our major highways, our skyways, these are national critical infrastructure, and they should be given priority,” he noted.

Mr. Ong added that permit processing also takes time and requires changes. A more direct system, he said, could help speed up expansion.

“The government would play a very important role to look at the framework and see what kind of solutions we can set to overcome these challenges,” he said. “If we have a one-stop shop process for national critical infrastructure development, we can set the framework and workflow.”

The DICT said it has started to address these gaps through policy efforts. These include the Konektadong Pinoy Act and the National Digital Connectivity Plan (NDCP), which aim to improve coordination and simplify processes.

“These two policies, we encourage them from being the gatekeeper to become the gateway,” Mr. Guingcangco said. “Basically, we’re granting our stakeholders ease of accessing in getting permits.”

He also pointed to interoperability as a key part of digital systems. Under the E-Government Act, agencies must connect their layers of systems, which is physical and virtual, so services can move across platforms without delays.

“You may have the best and fastest smartphone… but if you don’t have the infrastructure, you won’t be able to access it,” Mr. Guingcangco noted.

To expand coverage, the government is also looking at shared investment models. Mr. Guingcangco described a setup where 60% comes from the private sector and 40% from the government. In this arrangement, the government handles access and support, while companies build and maintain systems.

“It was stated in the NDCP for us to essentially deploy an infrastructure that will be maintained and operated long-term. We need to involve the private sector to help us out and tap their expertise,” he explained. “We understand that the private sector might not find it feasible to reach these far-flung areas right now via fiber or other modality. That’s where the government steps in, because we ensure that there’s no Filipino left behind.”

Data processing and storing

Meanwhile, Mr. Ong said the challenge goes beyond improving internet speed or coverage. He pointed to the need for a broader approach that includes fiber networks, subsea cables, data centers and digital platforms working as one system.

“You’re spending $20 billion a year for offshore data processing and storing,” Mr. Ong said. “If you repatriate all your data here in the Philippines, that amount of money that you pay offshore is spent inside the Philippine economy.”

Mr. Guingcangco shared that local data hosting could support several industries, from finance to online services. He raised the possibility of the Philippines serving as a hub for the region if it builds the right systems.

“So, what if we become the host for the region? It would really not just improve, it would meet the reason why are we investing in the first place.”

Listen to the full episode on BusinessWorld B-Side on Spotify or watch on BusinessWorld’s official YouTube channel.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.