IT Law Journal

administrator May 16th, 2004

Philippines as Knowledge Center of Asia in the 21st Century
by Carlyn Marie Bernadette C. Ocampo-Guerrero

Filipino IT practitioners, including technicians and programmers, are very much in demand all over the world, such as in advanced countries as United States, Australia and Singapore, acquiring a stature of proficiency second to Indian programmers who are dominating the IT outsource market today. But various professional groups and related organizations today have sprouted with the purpose of honing the skills of our IT professionals and expanding their capabilities. All these scattered efforts are now being harnessed and coordinated by the Philippine National Technical Council, which can boldly assert that the international community now sees the Philippines as an emerging IT-competitive economy.

The Council sets out a clear vision that by the end of the first half of the 21st century, “the Philippines will have laid the infrastructure for every business, every agency of government, every school, and every home to have access to information technology. By 2005, Philippine companies will be producing competitive IT products for world markets. Within the first decade, it will be a leader in IT education, IT-assisted training, and in the application of information and knowledge of business, professional services, and the arts. And telecommunications will provide the infrastructure for interconnection and networking throughout the Philippine archipelago.” Its goal, therefore, is to make the Philippines as the Knowledge Center of Asia.

The role of government in Philippine IT development is that of an enabler, lead user, and partner of the private sector providing national information Infrastructure and the policy, program, and institutional environment that will encourage the growth of IT use and the IT industry in the country. Those involved in telecommunications, education and R&D will each play their own supportive roles — telecommunication is for the physical infrastructure, education for the adequate preparation of the labor force, the R&D community for developing local products and applications, and for adapting technology sourced overseas to Philippine conditions, as well as to act in a broader capacity as government or private business.

In industry, it hopes to turn the Philippines into an Asian hub of software development and training. And sees that private industry will adopt IT solutions for competitiveness and develop a global niche for Philippine IT products and services. In government, it seeks to improve capacity and efficiency and to professionalize bureaucracy. In education, public and private education and training institutions will adopt IT in their curricula and develop a critical mass of IT professionals and an IT literate workforce. And in overall support services, it seeks to create policies, programs, institutions, and a culture that would make the Philippines achieve the Council’s goal.

IT became a concern of multilateral policy agreements, particularly within the General Agreement on Trade in Services (GATS) within the World Trade Organization and the Framework Agreement within ASEAN for expanding intro-regional trade in services. The NationaL Information Technology Council noted that IT permeated various trade and investment liberalization and facilitation initiatives, as well as economic and technical cooperation, within Asia-Pacific Cooperation during the Manila-Subic ministerial and leaders meetings in 1996.

The Philippine Situation. The principal strengths of the Philippine IT industry include a well-educated, price-competitive labor force, English proficient, with a growing track record of successful IT work, fastgrowing telecom infrastructure, government interest in the industry, less regulation than those of some of its neighbors, good capabilities to dealing with foreign partners, and strong entrepreneurship. Yet, there are missing elements for integrated IT diffusion in the Philippines compared with other countries such as: improved access to IT technology and know-how from other countries across industries; preferential treatment of advanced local users in learning from foreign firms; more integrated approaches to national strategies for IT diffusion — e.g. pace setting activities in cost-sharing, government-industry partnerships, and IT consultancies; user-oriented IT strategy to encourage building a critical mass of local IT firms; support to creating world-class managerial skills in information management and organization.

Globally, competition in electronics has shifted away from final assemblers and vertical control to “open-but-owned” systems, with standard owners going after a growing installed base of customers. These opportunities are yet to be tapped by the Philippines.

In telecommunications, Agila II was launched in 1997, with a reach covering all Southeast Asian countries and some parts of China and Japan. It further expands local telecommunications and broadcast infrastructure without depending on foreign-owned satellite facilities. Four telecommunications bills were in consideration in Congress: Proposed Reorganization of the National Telecommunications Commission; Cable Television Rationalization Bill; Anti-telecom Fraud Bill; Arbitrary Resistance to Interconnection which seeks to criminalize the refusal of a company to interconnect.

More Internet Service Providers are expanding their services to include content provision as well. The first Philippine Internet Exchange or PhIX, was launched in 1997. PhIX is a network access point that allows ISPs to exchange local Internet traffic within the Philippines without having to connect host servers overseas. The PhIX was established by PLDT and interconnects Infocom, Iphil, Mozcom, Virtualink, and Worldtel.

The banking industry is one of the Philippine pioneers in IT use. Megalink operated the first shared network of automated teller machines (ATMs) and was the first switch company to undertake ISO 9000 certification. And Among other IT projects in banking are the following: the Philippine Dealing System (PDS), an electronic off-floor foreign exchange trading system that has been in place since 1992; the Philippine Dollar Transfer System (PDDTS), a vehicle and electronic facility to handle and monitor bookkeeping claims to US dollars being traded among participating banks; IDInet Philippines Inc., a company jointly owned by Ayala Corp. and Singapore Network; Project Abstract Secure (PAS), a functional collaboration between the Bureau of Customs (BOC) and the BAP, where an electronic system has been put in place to verify the proper payment of customs/taxes and to remit payments electronically through the banks.

The Philippine Stock Exchange set up an electronic trading system in 1994 and provided the investing public with access to market information during trading by using investor terminals located at the public galleries. An electronic link-up with the Securities and Exchange Commission started in 1996. A paperless trading system was introduced in 1997, with the settlement and clearing of transactions using certificates replaced by a book-entry system of transferring ownership for equities and lodging the certificates in a central repository. A clearing facility is being built to supplement the central stock depository.

The Philippine electronics industry is the country’s major export winner. The industry is export-oriented, essentially engaged in assembly manufacturing and labor intensive activities, dominated by multinational corporations (MNCs) such as Intel, Texas Instruments, Fujitsu, Matsushita, Toshiba and others.

In Education., Quality and expertise distinguish the Filipino IT professional. Filipinos find it easy working on legacy applications as well as fourth generation languages. Thousands of Filipinos are adept with mainframes and experienced in minicomputer operations. Filipino microcomputer professionals have experience with connectivity and data communications through Local Area Networks (LAN) and micromain frame links. The use of IT to improve teaching, learning , and educational management in basic education was introduced through Schools of the Furture equipped with multimedia facilities opened in Camarines Sur in 1997. Various electronic information networks are encouraging greater inter-action within the country’s networks are encouraging greater inter-action within the country’s S&T community: the Science Academe and Research Network NARNET aims to connect to the Net thousands of tertiary and secondary schools all over the Philippines; the Science and Technology education network (STEDNET); and the Health R&D Information network (HERDIN).

In Government. With the support of private sector, the Government launched its own campaign to bring out a competitive IT industry. The Intellectual Property Rights Code, Republic Act No. 8393, seeks to impose stiffer penalties and fees for the manufacture, distribution and use of unlicensed software. House Resolution 890, called for the interconnection of local Internet Service providers into on Internet exchange. The exchange, to be otherwise known as the RPWEB, electronically links up via the Internet the entire government organization.

The Government’s Action Agenda.

1. Provide the Policy Environment.
   1. Adoption and implementation of policies to promote increased investments in IT and related electronics industries–e.g., through strategic partnerships, venture capital.
      Specific Actions followed were promulgating administrative legislative measures to promote wider private sector participation in venture capital financing to expand the capital base for IT R&D and other IT-related development ventures;
      Adoption of measures to promote strategic partnerships and alliances by local companies/institutions with leading international R&D institutions, technology providers, developers, and manufacturers;
      Promotion of technological innovation and experimentation by creating new products, services and applications;
      Focus R&D on high-value added IT products and services as well as on product creation/design and improvement in high growth sectors such as telecommunications software development (information systems, common application packages, educational/courseware packages, multimedia applications, computer animation, promotional products etc.).
   2. Adoption of more investor-friendly policies systems and procedures in government.
      Specific actions such as Fast-track legislation/adoption of administrative measures to further liberalize foreign investment;
      Establishing fast lane services for foreign investors/businessmen at ports of entry and when transacting business with government to create investor-friendly environment;
      Organizing a taskforce on monitoring and public accountability aimed at making the administrative and policy environment for more conducive for investing and doing business in the Philippines.
   3. Implementation of Philippine commitments to international agreements that affect the IT sector favorably -e.g. the IT Agreement (ITA).
   4. Adaptation of administrative measures to effectively enforce the laws on intellectual property rights (IPR), particularly as they affect IT products and services.
   5. Rationalization and coordination of development of technoparks and cybercities throughout the country for greater complimentarity in investments and infrastructure development.
2. Enhance the Physical Infrastructure/li>
   1. Accelerating universal access, i.e., Making telecommunications services accessible and affordable to all, by completing telecommunications programs, especially in underserved areas.
   2. Fast-tracking the formulation and implementation of the Philippine Information Infrastructure (PII).
   3. Intensifying investment promotion in the telecommunications industry.
   4. Formulating appropriate cyber laws in the use of networks, particularly the Internet, to ensure information security and network reliability.
   5. Promoting telecommuting/ teleworking, particularly in software development and multimedia production.
3. Develop the IT Manpower Base
1. Producing the critical mass of IT professionals and IT-literate manpower including competent IT educators and teachers at all levels.
2. Designating from among IT training institutions, universities or colleges IT Centers of Excellence as a form of recognition and reward.
3. Organizing a nationwide network of Core Competency institutions in IT in partnership with local and international development institutions and business organizations.
4. Conducting continuing IT education for teachers/trainors, IT practitioners and workers.
5. Adopting dual-tech approach in IT education and training.
6. Establishing high-quality distance education and learning.
7. Developing and implement life-long learning through the internet.
4. Pump-prime IT Industry Development
1. Implementing a government-wide computerization program with emphasis on the development and deployment of front-line, mission-critical and common application information systems.
2. Providing appropriate financing support to allow active participation by private sector in R&D and in the development and the incubation of new products and solutions.
   Fast-tracking measures to streamline administrative processes and procedures in government procurement, budgeting, accounting, auditing, monitoring reporting, etc.
5. Organize for Action: Institutional Reforms
1. Reorganizing the NITC to broaden and strengthen private sector.
2. Involvement in IT development activities.
3. Constituting NITC task forces to carry out specific IT 21 programs/actions.
4. Organizing a private sector Advisory Council to facilitate meaningful private sector participation in the implementation of IT 21.
5. Strengthening the NCC to enable it to better carry out its primary mandate of promoting widespread use of IT in government.
6. Creating a comprehensive database management, monitoring and benchmarking system for key IT indicators.
6. Marketing the National IT plan for the 21st Century
1. Organizing task forces to undertake a nationwide communication and advocacy program, including focused It trade missions and international roadshows.
2. Developing, producing, and disseminating promotional materials on IT21 and the Philippine IT Action Agenda.
3. Creating a Philippine website promoting IT 21 and IT Action Agenda.

In conclusion, Phase Three involves developing a global niche for the Philippine IT in knowledge products and services. It looks to sustaining IT innovation geared towards knowledge creation, pushing for higher levels of growth for the Philippine IT industry, and sustaining its role as “The Knowledge Center in Asia”.

Source: www.neda.gov.ph/ads/IT21/

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