The Philippines will need to pursue and implement reforms aimed at encouraging competition and investments to improve its broadband infrastructure, according to a World Bank study.

For the World Bank, the Open Access in Data Transmission (OADT) bill is a viable starting point for reforms.

'Binding constraints underlying the Philippines' poor broadband infrastructure are inter-related, requiring a comprehensive package of reforms to yield desired entry, investment, and sector performance outcomes,' the WB said in a policy note.

The multilateral lender said the country is lagging behind its neighbors in Southeast Asia in terms of affordability, speed, and access to internet connectivity, creating an uneven landscape for digital participation.

It said the country's poor broadband infrastructure is a result of the outdated policy environment that has fostered weak competition and limited investments in connectivity infrastructure in rural areas.

'Unaddressed, weak internet might derail the country's achieving upper middle-income status in the coming years and its aspiration for a prosperous middle-class society by 2040,' the World Bank said.

As such, it said the government's primary focus should be to adopt and implement market reforms to lower barriers to entry, promote investment, and encourage competition through the efficient use of spectrum resources and shared infrastructure deployment.

'In the short-term, the passage of the proposed OADT Act in the 19th Congress is a viable, promising opportunity to reform the Philippines' decades-old policy frameworks, thereby adapting to technology and business model changes in the broadband value chain,' the World Bank said.

The OADT bill, which is among the priority legislative measures of the current administration, aims to introduce a regulatory framework to improve internet services by encouraging more investments in broadband infrastructure, especially in the countryside.

It will fast-track network rollout by simplifying and rationalizing the entry process for network providers.

The bill was approved by the House of Representatives in December 2022, while the Senate is deliberating its counterpart measure.

'Policymakers could build on immediate reforms through the open access bill as an entry point to broader and medium- to longer-term digital connectivity agenda,' the World Bank said.

It said the next phase of spectrum reforms, such as mobile spectrum restacking, regional spectrum licensing, piloting spectrum auction and revising the spectrum user fee pricing, could ensure adequate fiscal policy options for longer-term agenda to lower end-user price for broadband connectivity and expand rural coverage while maximizing a scarce spectrum resource.

As outdated policy and regulations have long stunted the growth of the country's broadband industry and expansion of digital infrastructure, the World Bank said lack of action would have consequences for the country such as loss of growth opportunity, people remaining unequipped for future jobs, and widening the digital divide.

'For inclusive growth through digitalization that benefits all Filipinos, updating Philippine policy to promote competition, encourage investment, and upgrade broadband infrastructure is urgent and necessary,' the World Bank said.


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