Digital infrastructure gaps will need Presidential action

President Ferdinand Marcos, Jr. was clear and unequivocal in his message to the international business community during his trip to Davos, Switzerland last week. Time and again, he emphasized that the Philippines is well aware of the central role that digital technology plays in the life of our nation and our economy.

In statements at various events of the World Economic Forum, Mr. Marcos acknowledged the need to digitally transform the bureaucracy, to ensure wider and better quality connectivity for all Filipinos across the archipelago, to partner with the private sector in bringing about investments in digital infrastructure, to ensure the security of public and private information in cyberspace, and to constantly improve and upgrade the skills of our human capital so they can fully participate and prosper in the digital economy.

He acknowledged that more needs to be done in providing connectivity to millions of Filipinos wherever they may be in the country. Initiatives in digitalization of both government and private transactions will be critical in boosting efficiency and productivity across all sectors.

The President has also directed Congress to prioritize legislation like the E-Government and E-Governance Act which would accelerate the digital transformation of both the national and local government bureaucracies into an integrated system that will deliver efficient public services to the people.

And indeed, we saw firsthand, during the height of the pandemic lockdowns, how indispensable the internet has become not only in our work and education but also in our personal, day-to-day requirements. We also saw the urgency of expanding access and improving the quality of broadband services to meet the sudden surge in demand for fast and reliable connectivity.

To be sure, there has been progress in the past two years or so. Connectivity here has significantly improved. The November 2022 Ookla Speedtest Global Index has ranked the Philippines 45th in the world in terms of fixed broadband speed — a marked improvement from its 71st place in October 2021. For mobile internet speed, the Philippines pushed up to 80th place globally in November 2022 from 93rd in October 2021.

Admittedly, we have a long way to go relative to other countries — but this is a promising start.

The stark improvement in connectivity can be traced not to an efficiency innovation or a hi-tech tool, but to the drastic cutting of red tape in terms of streamlined and clearly articulated bureaucratic guidelines.

Specifically, two Joint Memorandum Circulars (JMC) — JMC No. 1, Series of 2020 for the issuance of permits, licenses, and certificates for the construction of telco towers, and JMC No. 1, Series of 2021 for the installation of telecommunication and internet infrastructure — have been instrumental for these gains.

The bureaucratic mess was so dauntingly complex that the circulars had to involve the Anti-Red Tape Authority, the Department of Information and Communications Technology, the Department of the Interior and Local Government, the Department of Public Works and Highways, the Department of Health, the Department of Human Settlements and Urban Development, the Food and Drug Administration, the Civil Aviation Authority of the Philippines, the National Telecommunications Commission, and the Bureau of Fire Protection.

Within just 18 months, processing time to secure permits was drastically reduced: from eight long months to 16 days for telco towers, and from 2.5 years to just two and a half months for other digital infrastructure. The number of permits that had to be obtained went down from 13 to eight, and the number of other required documents fell from 86 to 35.

Because of the rationalized permitting process, 7,000 additional towers were established in just 18 months, bringing the total to 29,700 from 22,700.

But while the JMCs have thus far been effective in achieving tangible results, they will only be in effect until July this year, after which they would expire. Given that some local government units are still not fully complying with these JMCs, there is the risk of sliding back to the debilitating red tape problems.

The Private Sector Advisory Council and the Anti-Red Tape Authority had earlier issued a joint statement calling on the Palace to immediately issue an executive order (EO) that would cover all the provisions of the two JMCs. The EO, which has the force and effect of a law, would ensure compliance by the pertinent units and agencies, and would institutionalize the guidelines that have given rise to remarkable results.

We support this call.

We cannot afford to lose the momentum we have built in the past two years, and revert to the bloated, inefficient, counter-productive ways that turn off investors and stymies businesses, thereby stalling our economic recovery.

These concerns, after all, fall under the ambit of the President’s priority of nationwide connectivity and digital transformation. After his impassioned calls for foreign investment and bannering our economic advantages and action areas, we are hopeful that the President acts expeditiously on something as patently responsive, proactive, and effective as this executive order. Certainly, this would help clear the bureaucratic hurdles and significantly minimize, if not eliminate, the red tape that prevents us from achieving the full potential of our industries and skilled workforce. It will also show the rest of the world that we mean business and determined to fix our policy and regulatory environment.

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.