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Ease of doing business, infrastructure to boost small firms’ digital shift

By Arjay L. Balinbin, Senior Reporter

INVESTING in infrastructure and improving business conditions are critical components in accelerating the digital transformation of small and medium-sized enterprises (SMEs) in the Philippines, an industry expert said.

“It’s the infrastructure where Huawei can play a big role, but there’s also that part in terms of how we manage the ease of doing business,” Jose W. B. Decolongon, chief operating officer and managing director of Corporate Foresight, Embiggen Consulting, said at Huawei’s July 29 online forum titled “Accelerate Digital Economy for Inclusive Integration in Asia-Pacific.”

“Obviously, technology can play a big role. If we have [enough internet] coverage, then it will really help. Also, the mechanisms to make sure we make the best use of the coverage,” he added.

Mr. Decolongon noted the Philippines has around 73 million people out of its 108 million population who are already accessing the internet.

“That’s good, but we can be better… There’s also the question of speed. The Philippines, for example, has one of the slowest speeds in the region,” he said.

PLDT, Inc., a major telecommunications player, said on July 26 that the Philippines’ fixed and mobile internet speeds have more than doubled between June 2020 and June 2021.

Citing Ookla’s latest Speedtest Global Index, PLDT said in a statement that in June this year, the average mobile internet download speeds in the country were at 32.84 megabits per second (Mbps) or twice as fast as the speeds posted in the same period in 2020. It said fixed broadband download speeds have nearly tripled to 66.55 Mbps compared to June 2020.

“The latest Speedtest Global Index reflects the Philippines’ fixed broadband download speeds are just behind Vietnam’s 74.46 Mbps, but well ahead of ASEAN countries Laos (44.56 Mbps), Brunei (38.56 Mbps), Indonesia (26.17 Mbps), Cambodia (26.10 Mbps) and Myanmar (24.86 Mbps),” it said.

“Similarly, the country’s mobile internet download speeds are just under Vietnam’s 43.02 Mbps but also ahead of ASEAN neighbors Laos (30.01 Mbps), Malaysia (26.03 Mbps), Cambodia (25.52 Mbps), Myanmar (22.16 Mbps) and Indonesia (22.14 Mbps),” PLDT added.

In terms of ease of doing business, Mr. Decolongon said: “Even though some government agencies are quite fast as they are doing everything online, there are others… [where] it will take you months to actually get all the requirements done because things still have to be done on paper, and we have to submit stuff in person. Obviously, that becomes a challenge if you have quarantine regulations.”

“Our SMEs also need to know some simple stuff like in terms of marketing and having the skills to actually know… the opportunities in exploring the digital space,” he noted.

“Security and being able to manage fraud and cybercrime are also very important. In the Philippines, we have 50% that are reported and addressed. That is still a number we can improve on. Being able to improve that, we will increase the trust and confidence of sellers and buyers in digital platforms,” Mr. Decolongon said.

For his part, Alvin P. Ang, economics professor at Ateneo de Manila University, said the digital divide is “the biggest challenge of the digitalization process because it’s so fast and it’s really going to leave a lot of rural areas behind.”

“Suffice it to say that there is no substitute for making basic telecoms or technology infrastructure a public good,” he said.

He added that stakeholders should look at the economy and the social networks of people in rural areas.

“That is where education is very powerful. The education system, whether it is delivered online, hybrid or face to face, must put in context the foundational elements of digitalization,” Mr. Ang said.

“We have to invest in [people] and give our rural areas an opportunity to catch up by at least providing them with basic skills to get through the technology highway.”

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.