Manila, Philippines (May 6, 2010) – As the Philippines marches on a historic transition of government power through the first automated electoral procedure, Canadian-based ICT research and advisory firm XMG Global has penned propositions specifically to shape the development destiny of Philippine ICT sector.

XMG Global understands the maturity as well as the immense respect and recognition the Philippine ICT sector has so far achieved. Offshoring alone, which could contribute USD9.4 billion (5% of GDP) by year end 2010, manifests its resilience to compete with other giants like India and China.  Mobile penetration rate in the country now soaring at 78% is also ushering opportunities for higher level of consumerism beyond the usual SMS.  But despite these achievements, XMG Global is equally monitoring persistent barriers that might dampen the country’s ICT industry. For instance, ICT approved investments in the Philippines, averaging USD502 million a year, is declining annually by 29% for the past 3 years. The threat of “Dutch Disease” – the adverse effect on traded goods and services when domestic currency appreciates – is also posting some alarms to BPO and IT sectors.

Leveraging from the current global ICT dynamics as well as the country’s policy space, XMG Global proposes at least six (6) platforms for the succeeding administration.

(1)    Promote Filipinos worldwide to “intelligently” love their country.

Intelligently loving the country is so much more than fighting for freedom and rightful democracy in the streets. It is so much more than uniting together behind Filipino boxing icon Manny Pacquiao, and it is definitely more than wearing fanciful Pinoy-themed shirts.  For one to “intelligently” love ones country is to devote efforts not only for the development of one’s own life, but also thinking about what, at the end of the day, can one do for his/her own country. It would be a mutually beneficial relationship between the country and its citizens that answers what the citizens can do for the country to prosper, and what the country can in turn, give back to its citizens. With that said, the next administration must foster this “intelligently loving” culture, by creating a conducive and ICT-enabled business environment that would enable high-value jobs to flourish. The next administration should also exert efforts in creating policies on employment and tap into the “diaspora network” to harness new potentials from Filipino expatriates.  As a start, an information exchange facility must be created by the next government to further promote intellectual cooperation among Filipino ICT professionals worldwide and prevent the detrimental effects of brain drain that has afflicted the country in the past years.  XMG Global believes that creation of new avenues to promote brain gain among Filipinos in the country and the 8 million Filipinos working overseas will foster the value of “intelligently” giving back to the country as well as forestall the risk of a diminishing talent supply through new opportunities and employment.

(2)    Design a comprehensive government risk management pipeline to secure continuous growth of ICT investment.

As security problems could pose damage to the country’s ICT investment, the next administration must pursue initiatives to resolve armed conflicts and prevent violence in the countryside. The presence of government over marginal groups trying to impede development should be strongly established. XMG Global also recognizes the need to improve the country’s meagre status of utilities and infrastructure making it resilient to disasters and natural calamities. The next president must also urge the local government units to improve their local tax collections providing insurance to mitigate monetary crisis.

(3)    Revitalize e-Government to achieve a more transparent and efficient delivery of government services.

The next administration must firmly establish the digital foundation of e-government. The next president can form several development phases of e-government but should target to prioritize online transactional service provisions for basic social necessities like health and education. A national single window for trade facilitation should be developed as it uplifts the standards of doing business in the country. XMG Global understands the investment requirement for e-government is daunting. Therefore, the next government should formulate resolutions tapping the Bangko Sentral ng Pilipinas (BSP) to increase government capital outlay and investment lifelines for e-government infrastructure.

(4)    Advance the Philippines beyond a “service-based” economy to a “knowledge-based” economy.

Because of the influx of BPO and call centre operations in the Philippines, the country is posturing toward a service based economy. XMG Global ascertains the sustainability of this trend but cautious of having a plateau-like direction in the future as other offshoring countries continue to improve their business portfolio. In response, the next administration must start to deal with the pillars of a knowledge-based economy. The next government’s support on intellectual property legislations and judicial framework, quality of education, and research expenditures and networks should be unequivocal.  XMG Global maintains its conviction that the road for a knowledge based economy is a safety net to prevent risks and vulnerabilities such as rising labour cost, fast appreciation of local currency, and immigration.

(5)    Be responsive to the continuously evolving global competitive landscape.

Two of the monumental challenges in the next decade for the Philippines are: (1) the complexity of talent and product requirements from globalization; and (2) the remarkable efforts of countries to garner shares of the offshoring market - citing some examples such as Vietnam’s impressive performance on non-voice operations and the shifting of former Soviet Union countries toward nearshore software development.  XMG Global urges the next administration to firmly push for more visible and effective marketing strategies by presenting the country as a legitimate business destination highlighting a highly skilled and English-speaking workforce, propensity to produce innovative high-valued ICT products and services as a knowledge-based economy, and prime strategic geophysical location.

(6)    Streamline and strengthen government’s role in the ICT ecosystem.

Realizing government’s role as a catalyst and enabler proved to be the backbone of ICT development. The Philippine statecraft must understand the necessity of appropriate and supportive policy and regulatory framework in order to maintain a healthy and competitive ICT environment. The next administration must start to review the Public Telecommunications Policy Act of the Philippines (RA 7925) and should make amendments strengthening particularly the pricing methodologies and competition-related provisions. XMG Global is also convinced that a strong legislation that would create a formal and binding ICT governing body is sine qua non for an effective delivery of government services to ICT stakeholders.

Bottom-line:  ICT is not only fundamental to growth and sustainability of the Philippine economy, but it is also a basic human need.  

For more information on XMG, visit: http://www.xmg-global.com.  For inquiries, please send an e-mail to info@xmg-global.com

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