|
Techno-Filipino
By Michael Alan Hamlin
September 09, 2002
When the Philippines passed the E-Commerce
Law in 1999, it was the first Asian country to do so, and one of
the first anywhere. Former Department of Trade & Industry assistant
secretary Toby Monsod gives much of the credit for championing the
bill through Congress to Janette Toral, a former ComputerWorld contributor
who now provides IT-related research through her website, DigitalFilipno.com
(www.digitalfilipino.com).
She continues to champion causes
that strengthen the IT sector, including training, business planning,
and technical support. Her Internet discussion groups - ph-outsource
and digitalfilipino - are extremely active, and the source of many
new ideas and initiatives. Most recently, they include the formation
of an outsourcing consortium to promote the IT-enabled services
sector.
Her research provides some interesting
insights into the Philippines mobile telecommunications and Internet
sectors. One of the most interesting, in my view, is that Filipinos
who buy things online are now buying from local sites, or at least
one local site, myAyala.com. "To think that a lot said in the
past that buying movie tickets online and reserving theater seats
wouldn't do well, but think again," Toral said in her June
report. Like most positive Internet news these days, what there
is of it anyway, myAyala.com's success seems to be a complete surprise
to everyone.
Just how big is the Internet in the
Philippines? Well, measuring usage isn't easy. That's in part because
so many users access the Internet at Internet cafés, at school,
or at work. Toral estimates that there will be 3.5 million users
by the end of the year, in substantial part because "the number
of small- and medium-sized businesses (SMBs) accessing the Internet
is growing at exponential rates," she says.
Growth in SMB Internet usage is due
in no small part to demands by customers for suppliers to conduct
business electronically. Toral says that the success of e-marketplaces
like BayanTrade (Full Disclosure: BayanTrade is a client of mine.)
has a lot to do with the push for SMBs to become Internet savvy.
By last month, BayanTrade had already recorded value pass through
(VPT) - the value of transactions conducted on the e-marketplace
- equal to 114% of VPT for the whole of 2001.
Total VPT since it began operation
a little more than two years ago is around US$200 million or about
40% of total semiconductor exports annually, the Philippines largest
export sector according to official statistics. Buyers on the e-marketplace
find that they realize savings that average 12 percent, and go as
high as a whopping 70 percent, so there is plenty of reason to encourage
suppliers to go online.
How significant is Philippine Internet
usage to usage in Asia generally? Consider that in July, China had
around 41 million users, or about four percent of total population.
That's a lot of users. Yet as a percentage of population, the Philippines
is a little better off, with somewhat over 4.5 percent. Developed
Asian nations naturally have higher penetration. For example, about
half of all Japanese households are connected to the Internet.
But the growth in Internet usage
as a percentage of the population in a developing economy like Philippines
is encouraging considering that the economy is growing about half
as fast as China's, and receives a fraction of the job-generating
foreign investment China does. China's annual foreign investment
of US$45 billion is equal to about $45 per person. The Philippines'
US$400 million or so - depending on who's counting - is equal to
less than US$6 per person.
So despite the odds, Internet Philippine
penetration in the Philippines is growing at a respectable rate
relative to developing Asia's best-funded - in terms of FDI - economy.
By 2005, Internet penetration will double according to Toral, to
about seven million, not far off from half of all households. Toral
believes that the use of wireless devices to access the Internet
will enhance growth over the next three years.
These numbers are important because
they help demonstrate how prepared - or unprepared - the Philippines
is to grow what looks to be its most important export, IT-enabled
services. IT-enabled services refers to anything - from software
to architectural plans to animation for movies - that is created
and exported using information technology. Gartner Research recently
reported that the Philippines is exporting around US$1 billion in
IT-enabled services annually, an amount equal to total exports of
electronics and semiconductors.
Those exports for the most part don't
show up in official statistics, however, because there is no export
documentation. Everything goes out over the Internet. That's why
work like Toral and others do is so important in understanding what's
really happening in the Philippines, particularly given the negative
news that dominates headlines.
Her work helps provide an accurate
picture of how Internet-ready the Philippines is as well as inspires
Filipinos to leverage technology to create new businesses and opportunities.
We need more people like her. People that make things happen.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). He can be reached
at mahamlin@teamasia.com.ph.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
|
