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IT21Philippines

Asia�s Knowledge Center

I.T. Action Agenda for the 21st Century

Republic of the PhilippinesNATIONAL INFORMATION TECHNOLOGY COUNCIL

ManilaOctober 1997

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The cover depicts the areas in which Information Technology is playing a critical role in Philippine Devel-

opment: Telecommunications, Industry, Government, Education and Research & Development.

The National Information Technology Plan for the 21st Century, or IT21, was prepared in cooperation

and close consultation with the various government agencies concerned and the information technology

and related sectors and organizations in the country. It was approved by the Cabinet-NEDA Board on

October 28, 1997, adopted and launched during the multi-sectoral IT Forum held on February 23, 1998,

Asian Institute of Management, Makati City.

For more information on this document, please write or call the:

NATIONAL INFORMATION TECHNOLOGY COUNCIL

c/o National Computer Center

Carlos P. Garcia Avenue

University of the Philippines Campus

Diliman, Quezon City

Tel. Nos. 920-74-11 to 21

Fax No.: 920-74-13

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CONTENTS

PREFACENational Information Technology Council

I Our Vision and Goal 09

II Situating I.T. in the Philippines 16The Global PictureDevelopments in Southeast AsiaThe Philippine Situation

III Our Strategy and Action Agenda 45Phases of our I.T. DevelopmentOur I.T. Development StrategyOur Action AgendaPhase 1 Providing the ImpetusPhase 2 Building Up MomentumPhase 3 Realizing Our Vision

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TABLES1. Asia-Pacific PC Shipments, 1995-96, by country of origin 19

2. Net Sales of the Top 350 I.T. Companies, 1994-1995,oooooby sector 22

3. Number of Telephone Lines Installed and TelephoneoooooDensity Index, 1989-1998 24

4. Comparative Telephone Densities: Philippines andoooooOther Asian Countries, 1992-1996 26

5. Telephone Services Across Regions, 1996 27

6. Export Performance of the Electronics Industry,ooooo1992-1996 30

FIGURES1. Growth of Internet Users Worldwide, 1995-2000 17

2. Philippine Telephone Density, 1989-1998 25

3. Employment in Philippine Electronics, 1985-1995 29

4. Philippine Exports of I.T. Services, 1989-2000 31

5. Philippine Exports of I.T. Services, by type, 1994-1996 32

6. I.T. Enrollment in the Philippines, 1990/91-1995/96 38

7. I.T. Graduates in the Philippines, 1990/91-1995/96 39

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This National Information Technol-ogy Plan for the 21st Century, or IT21,documents our common vision and pre-sents our nation’s broad strategy to spurour country to global competitivenessthrough information technology. It setsdown specific time frames for achievingthese goals:

By the turn of the 21st century, the Philip-pines will have laid the infrastructure for everybusiness, every agency of government, everyschool, and every home in the Philippines tohave access to information technology.

By the year 2005, I.T. use will be perva-sive in daily life. Philippine companies will beproducing competitive I.T. products for worldmarkets.

Within the first decade of the 21st Cen-tury, the Philippines will be a a KnowledgeCenter in Asia: the leader in I.T. education, inI.T.-assisted training, and in the application ofinformation and knowledge to business, profes-sional services, and the arts.

PREFACE

IT21 Action Agenda for the 21ST Century

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This document benefited from a studyundertaken by a team of international andlocal experts organized by the NationalInformation Technology Council (NITC)and the United Nations Industrial Develop-ment Organization (UNIDO), with fundingassistance from the United Nations Devel-opment Program (UNDP) and the nationalgovernment. Over a period of about six (6)months, the team consulted with industryleaders and various government officials todefine the issues and recommend specificmeasures needed in meeting the goals thatwere set for the I.T. sector, taking currentinternational experience and the state of I.T.into account.

The team’s recommendations weresummarized in a set of technical papers,which provided the major basis for thisdocument. The draft of the IT21 documentwas reviewed and approved with somemodifications and presented to the Legisla-tive and Executive Development Council(LEDAC), and later during the same daylast October 28, 1997, was again presentedto and approved by a joint meeting of theCabinet and the National Economic andDevelopment Authority (NEDA) Boardchaired by the President.

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Soon after, the President met with theheads of leading global I.T. companies toforge strategic alliances in implementingspecific projects identified in IT21. ThePresident also issued on November 7, 1997Administrative Order No. 332 on theRPWEB, which directs government agen-cies to connect to the Internet.

These events just emphasize the impe-tus being given to IT21 from the highestlevels of public office in the land. Urgenttasks lie ahead for those who will follow.

s A number of policy issues in telecom-munications and the establishment of thePhilippine Information Infrastructure havebeen resolved, but there are still pendingissues that must be addressed in “technol-ogy-neutral” ways.

s We have started capitalizing on globalopportunities for solutions to the “millen-nium bug” problem and other I.T.-relatedservices, but we still lack the critical mass oftrained manpower to take a sizable share inthe world market.

s Government agencies have increasedtheir use of the Internet, but regular usersof the Internet number only about one-tenth of one percent of the total Philippinepopulation.

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s Many Philippine educational institu-tions are just starting to experiment withthe use of I.T. in education.

s We still need to gear up our scienceand technology community for R&D activi-ties in the field of information technology.

s We still need to have IT21 internal-ized by all the relevant actors in the coun-try.

It is therefore hoped that this docu-ment will serve as a continuing frameworkto guide the directions for I.T. in the coun-try over the next 10-25 years. Above all,however, our success will depend on thetotal commitment and support of everyone, of every sector -- to build up themomentum towards realizing our nation’svision in IT21: the transformation of thePhilippines as Asia’s Knowledge Center inthe 21st century.

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T

Part 1

OurVision

andGoal

he international community now seesthe Philippines as an emerging economythat bears watching. The country hasproved resilient in containing both domes-tic and external shocks with proper mon-etary policies and fiscal management.Reforms that brought about liberalization,deregulation, and privatization have sig-nificantly restructured industries towardsgreater efficiency. The present administra-tion has built a solid foundation fromwhich the Philippines can be propelled intothe 21st century as a competitive and vi-brant economy. The challenge to all Filipi-nos is to nurture and build on these gainsand to ensure that their distribution will beas broad-based as possible.

These positive developments in theeconomy have contributed to the overallbullishness in the Philippine I.T. industrytoday. Indeed, there is a lot of gold to bemined in the Philippine I.T. landscape. The

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country can build its capability in the de-sign and manufacture of large-scale inte-grated circuits and microprocessors and ofmicroprocessor based process monitoringand control. Software design, along withinformation and data services, has becomeareas where the country has establishedcertain advantages. Developments intelecommunications technology offer newopportunities for the country’s profession-als (e.g. medical practitioners, engineers,etc.) to engage in distance professional ser-vices—where the presence of the profes-sional is not required to provide such ser-vices. Knowledge-based industries are anarea where the country can develop acompetitive edge.

With this view, the Philippines hasadopted IT21 as its vision to guide I.T.development in the country over the next 7-15 years. Its overall goal: to transform thePhilippines into a Knowledge Center inAsia.

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B

Our Vision:IT21

y the turn of the 21st century, the Philip-pines will have laid the infrastructure for everybusiness, every agency of government, everyschool, and every home in the Philippines tohave access to information technology.

By the year 2005, I.T. use will be perva-sive in daily life. Philippine companies will beproducing competitive I.T. products for worldmarkets.

Within the first decade of the 21st Cen-tury, the Philippines will be a KnowledgeCenter in the Asia: the leader in I.T. educa-tion, in I.T.-assisted training, and in theapplication of information and knowledge tobusiness, professional services, and the arts.

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Our GoalThe Philippines asKnowledge Center of Asia

In the State of the Nation Address ofhis final year in office, President Fidel V.Ramos spoke before the Third Session ofthe Tenth Congress of the Republic of thePhilippines. He talked about the nationalpole-vaulting agenda, and implicitly enun-ciated the goals of IT21.

Telecommunications... we should be accelerating the develop-

ment of our information infrastructure.... If weget these things done, the distances separatingour 7,100 islands will compress dramaticallyin the mind - as we build virtual bridges overthe waters, across the air and into cyber-space.

Telecommunications will provide theinfrastructure for interconnection andnetworking throughout the Philippinearchipelago.

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We must work hard

to win our place in

the world.

Industry... we aim to turn the Philippines into an

Asian hub of software development and train-ing.

Private industry will adopt I.T. solu-tions for competitiveness and develop aglobal niche for Philippine I.T. products andservices.

GovernmentWe must improve government’s capacity

and efficiency across the board - in its everyaspect and from top to bottom. The bureau-cracy we must further professionalize and localgovernment units we must begin to use asstrategic partners in development.

Government will adopt “best practice”I.T. in governance and spur the growth ofthe Philippine I.T. industry by efficientoutsourcing for public projects.

EducationWe must make more intensive invest-

ments in ... our “dual-training” systems,“remote” educational institutions and“open” universities.

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We must make our schools not onlycommunities of learners - where our childrenlearn to read, write, compute. We must makethem schools of the future - which nurtureyoung Filipinos to become responsible citizensand enlightened leaders of our country.

Public and private education andtraining institutions will adopt I.T. in edu-cation and develop a critical mass of I.T.professionals and an I.T.-literate workforce

Research and DevelopmentWe must build in this country the constel-

lation of skills - the education, research anddevelopment, the work ethic, the entire infra-structure of knowledge - that will enable us todevelop technological leadership.

Local R&D will upgrade available I.T.resources through focused technologysourcing, adaptation, and dissemination.

Support StructuresWe must work hard to win our place in

the world - because the world will not stopfor those who stand idly by on the roadsideof development.

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The next 10-15 years will be crucial ....We must learn to plan and prepare .... Wemust learn to look to what the world - theregion - and the Philippines - would be like ...over the next 10-15 years.

The policies, programs, institutionsand general culture that will bring aboutour goal of becoming a knowledge center inAsia will be provided through the coordi-nation and collaboration of all the stake-holders in the development of I.T. in thePhilippines.

Realizing our goal will require closecooperation between government at alllevels, with local and international busi-ness, the academic and science and technol-ogy communities, civil society, and inter-national institutions.

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Part 2

Situating IT inthe Philippines

I nformation Technology or I.T. is the collec-tive term for the various technologies involvedin processing and transmitting information,which include computing, multimedia, telecom-munications, microelectronics, and their inter-dependencies. Also called “informatics” or“telematics”, the term I.T. now more often refersto the convergence of various information-based, broadcast, and mass media communica-tion technologies.

The Global Picture

The worldwide I.T. and electronics industryis centered around computers, communications,software and related services. The I.T. and

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related electronics markets represent thelargest non-agricultural economic activity,and the fastest-growing business, in theworld. Worldwide spending on I.T. prod-ucts and services will rise 12 percent toreach $683 billion in 1997. PC shipments inthe US are expected to grow 15 percent,with annual growth rates over the next fiveyears of 11 percent.

The Internet explosion and the grow-ing home market are boosting I.T. sales.There were 31 million users connected tothe Internet by end of 1996, and more than150 million are expected by the year 2000.The number of servers will grow to fivemillion by the year 2000. The bulk of theseusers and networks will be in Asia.

150��

100��

50��

1995 1996 1997 2000

Figure 1.Growth of internet users worldwide (1995-2000) in millions

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150○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Source: IDC

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I.T. is increasingly a concern of multi-lateral policy agreements, particularlywithin the General Agreement on Trade inServices (GATS) within the World TradeOrganization (WTO) and the FrameworkAgreement within the ASEAN for expand-ing intra-regional trade in services. I.T.permeated the various trade and invest-ment liberalization and facilitation initia-tives, as well as economic and technicalcooperation, within Asia-Pacific EconomicCooperation during the Manila-Subicministerial and leaders’ meetings in 1996.Policy initiatives in electronic commerce arebeing fast-tracked in the United States andthe European Union.

Developments in Southeast AsiaThe market for PCs in the Asia-Pacific

region grew by 32 percent in 1996, with aparticular strong showing in notebooks andserver sales. The growth of the Asia-PacificPC market is projected to continue over thenext five years, with a combined annualgrowth rate of 20 percent. In almost all theSoutheast Asian nations, I.T. and telecom-munications are increasingly being used ascritical instruments of national and regionaldevelopment. I.T.-related plans and poli-

I.T. is increasingly

a concern of

multilateral policy

agreements.

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cies are being used as means for enhancingcompetitiveness and for realizing interna-tional cooperation and coherence within theregion.

The Philippine Situation

The principal strengths of the Philip-pine I.T. industry include a well-educated,price-competitive labor force, Englishproficiency, growing track record of suc-cessful I.T. work, fast-growing telecominfrastructure, government interest in the

Table 1. Asia-Pacific PC Shipments by country.

COUNTRY 1996 1995 GROWTH

Japan 8,099,200 5,822,000 39.1

China 2,108,240 1,518,002 38.9

Korea 1,973,943 1,514,032 30.4

Australia 1,393,939 1,214,740 14.8

Taiwan 525,008 421,385 24.6

India 447,132 350,386 27.6

Indonesia 420,846 332,046 26.7

Hong Kong 342,513 309,148 10.8

Thailand 321,782 269,505 19.4

Malaysia 328,197 254,456 29.0

Singapore 306,236 250,508 22.2

New Zealand 195,702 203,337 -3.8

Philippines 187,754 138,018 36.0

Rest of Asia Pacific 329,999 254,001 29.9

TOTAL 16,980,490 12,851,564 32.1 Source: IDC

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industry, less regulation than some neigh-bors, good capabilities for dealing withforeign partners, and strong entrepreneur-ship. Its weaknesses include a scarcity ofmiddle to high-end I.T. personnel trainedand experienced enough for internationalprojects, insufficient cooperation within theindustry, weak IPR enforcement, difficultiesmarketing the nation and the industry,capital cost and scarcity, small-scale natureof entrepreneurship, small domestic mar-ket, insufficient I.T. education, and insuffi-cient institutional cooperation and plan-ning.

Yet, there are missing elements forintegrated I.T. diffusion in the Philippines,compared to other countries:

s improved access to I.T. technologyand know-how from other countries acrossindustries

s preferential treatment of advancedlocal users in learning from foreign firms

s more integrated approaches to na-tional strategies for I.T. diffusion -- e.g.,pace setting activities in cost-sharing, gov-ernment-industry partnerships, and I.T.consultancies

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s user-oriented I.T. strategy to encour-age building a critical mass of local I.T.firms

s support to creating world-classmanagerial skills in information manage-ment and organization

In spite of these shortcomings, theoutlook on the Philippine I.T. sector re-mains bullish, largely because of the recentsustained growth of the Philippineeconomy. Increased I.T. spending andrevenues are projected as more companiesbegin to implement cutting-edge technolo-gies such as Intranets and data warehous-ing. A survey among IS managers revealedplans of increasing their I.T. budgets from10 to 50 percent in 1997. The Internet, withits potential to change the way business isdone, .is a major source of optimism amongvendors. The continuing liberalization ofkey industries is giving a big boost to I.T.projects, increasing demand and competi-tion particularly from multinational compa-nies. Despite keener competition, thecountry’s Top 350 I.T. companies posted netsales of P89 billion in 1995, up by 33 percentfrom 1994. Reported net sales of the Top200 I.T. companies in the Philippinesreached P135 billion in 1996.

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Investments continue to pour in. Intelhas been investing between $300 and $400million in local manufacturing facilitiesover the last 2-3 years. Seagate is expand-ing its recording head manufacturingfacility in the Philippines, with 1996 invest-ments of nearly $300 million. Fujitsu inau-gurated a hard disk manufacturing plant inCanlubang, with total investments expectedto hit $300 million. Apple Computersopened a full subsidiary. NEC will build aboard wiring plant in Laguna, Acer isbuilding additional facilities in Subic, andCypress Semiconductor is investing $110

SECTOR 1995 1994 % CHANGE

Hardware 7,800,458 5,559,357 40

Software 1,401,254 838,086 67

Computer Peripherals 15,274,284 10,134,188 51

Computer Accessories

and Supplies 3,245,984 1,784,566 82

Computer Services 3,287,344 2,431,626 35

Networking/Online Services 39,025 19,206 103

Other Office/Business Machines 2,527,670 1,887,910 34

Telecommunications Services 39,998,002 32,139,721 24

Telecommunication Equipment

and Accessories 15,579,127 12,233,523 27

TOTAL 89,153,148 67,028,523 33Source: IT Resource 1996-1997

Table 2. Net Sales of the Top 350 IT companies, By sector , 1994-95

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million in a new assembly and test plant inthe country. In I.T. services, James Martindoubled in size, NCR SW developed bankbranch tellering applications, and PlatinumTechnology established a local office toincrease technology support.

Globally, competition in electronics hasshifted away from final assemblers andvertical control to “open-but-owned” sys-tems, with standard owners going after agrowing installed base of customers. Turn-key contractors have been vertically inte-grating to process R&D, design formanufacturability, product-specific processdevelopment and documentation, variousforms of testing, final product assembly,final packaging, software loading anddocument duplication, and direct shippingto distribution. The fastest-growing con-tractors have specialized in newer processessuch as surface mount technology (SMT)which drive product miniaturization andperformance forward. Increasedoutsourcing has created an unprecedentedboom in the revenues of contract manufac-turers. Over the 1992-95 period, annualrevenue growth was 46 percent, and evenlarger growth is foreseen. These are oppor-tunities yet to be tapped by the Philippines.

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Year No. of Main Lines Telephone Density

(per 100 people)

1989 506,527 0.86

1990 549,159 0.91

1991 583,594 0.95

1992 740,033 1.17

1993 784,719 1.21

1994 1,109,652 1.67

1995 1,409,639 2.01

1996 3,352,842 4.66

1997 6,108,006 8.31

1998 7,347,664 9.78

Table 3. Number of Telephone Lines Installed

and Telephone Density Index, 1989-1998

Note: 1996 figure is based oncarriers� reports and population of71,899,000. Subsequent figuresare based on Carriers� submittedrollout plans. Source: NationalTelecommunications Commission

TelecommunicationsThe deregulation of the country’s

telecommunications industry paved theway for a hefty buildup in investments inthis sector, estimated to total P130 billionover the next three years. The total numberof main telephone lines in the countryclimbed from only 785,000 in 1993 to 3.353million as of end 1996. Expansion is pro-jected to remain strong at 72 percent in 1997and decelerate to 21 percent in 1998 whenthe telcos will have fulfilled their commit-ments in terms of telephone lines they haveto put up.

Telephone density per 100 peopleimproved from 1.21 in 1993 to 4.66 in 1996.

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The number of public calling centers in-creased from 171 in 1992 to 728 in 1997. By1998, a telephone density of 9.78. is ex-pected. The percentage of all cities / mu-nicipalities served nationwide climbed from21 percent in 1992 to 27 percent in 1996. By1998, about 87 percent of all regions will beserviced by telephones.

Agila II was launched in August 1997,with a reach covering all Southeast Asiancountries and some parts of China andJapan. It further expands local telecommu-nications and broadcast infrastructurewithout depending on foreign-ownedsatellite facilities.

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Figure 2. Philippine Telephone Density(per 100 persons)

10

8

6

4

2

089 90 91 92 93 94 95 96 97 98

) ) ) ) ) ))

)

)

)

Source: NTC

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Country 1992 1993 1994 1995 1996

Philippines 1.17 1.21 1.67 2.01 5.20

Indonesia 0.98 1.18 1.81 1.13 1.59

Korea 41.80 45.90 42.26 39.70 41.50

Malaysia 11.24 12.65 11.20 15.80 15.80

Thailand 3.10 3.73 4.50 5.93 7.41Source: APT 1995, 1996 and 1997 Yearbook

Table 4. Comparative Telephone Densities (Telephones per

100 persons): Philippines and Other Asian Countries

Four telecommunication bills werepending in Congress:

s Proposed Reorganization of theNational Telecommunications Commission(NTC)

s Cable Television Rationalization Bill

s Anti-Telecom Fraud Bill

s Arbitrary Resistance to Interconnec-tion which seeks to criminalize the refusalof a company to interconnect

The number of Philippine ISPs in-creased from 19 in 1995 to 88 in 1996, and toover 160 by the end of 1997. More ISPs areexpanding their services to include contentprovision as well. WebQuest launched theInternet aXess card to provide telephoneservices over the Internet. The first Philip-pine Internet Exchange (PhIX) waslaunched in July 1997. PhIX is a networkaccess point that allows ISPs to exchange

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% of Cities/Municipalities Served

Region 1992 1996 1998

1 38 58 82

2 23 32 43

3 43 55 95

4 24 34 59

5 11 28 100

6 15 23 100

7 8 17 93

8 8 9 98

9 6 10 87

10 11 18 97

11 13 22 100

12 5 17 100

NCR 100 100 100

CAR 0 12 47

ARMM 0 2 68

TOTAL 21 27 83

ZOPAD 7 12 68Source: NTC

Table 5. Telephone Services Across

Regions,1996local Internet traffic within thePhilippines without having toconnect to host servers overseas.The PhIX was established by PLDTand interconnects Infocom, Iphil,Mozcom, Virtualink and Worldtel.The number of regular Internetusers was estimated at 84,500 in1997.

IndustryThe banking industry is one of

the Philippine pioneers in I.T. use.Megalink operated the first sharednetwork of automated teller ma-chines (ATMs) and was the firstswitch company to undertake ISO9000 certification. EDInet Philip-pines Inc., a company jointly owned byAyala Corp. and Singapore Network Ser-vices Private Limited, is pioneering applica-tions of electronic data interchange (EDI).Among other I.T. projects in banking:

s Philippine Dealing System (PDS), anelectronic off-floor foreign exchange tradingsystem that has been in place since August1992

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s Philippine Domestic Dollar TransferSystem (PDDTS), a vehicle and electronicfacility to handle and monitor bookkeepingclaims to US dollars being traded amongparticipating banks.

s Project Abstract Secure (PAS), afunctional collaboration between the Bu-reau of Customs (BOC) and the BAP wherean electronic system has been put in placeto verify the proper payment of customsduties/taxes and to remit payments elec-tronically through the banks.

The Philippine Stock Exchange set upan electronic trading system in 1994, andprovided the investing public with access tomarket information during trading byusing investor terminals located at thepublic galleries. An electronic link-up withthe Securities and Exchange Commissionstarted in 1996. A paperless trading systemwas introduced in 1997, with the settlementand clearing of transactions using certifi-cates replaced by a book-entry system oftransferring ownership for equities andlodging the certificates in a central reposi-tory. A clearing facility is being built tosupplement the central depository.

The Philippine electronics industry isthe country’s major export winner. The

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

120

100

50

60

40

20

085 86 87 88 89 90 91 92 93 94 95

Figure 3. Employment in Philippine Electronics(thousand persons)

Source: DTI

industry is export-oriented, essentiallyengaged in assembly manufacturing andlabor intensive activities, dominated bymultinational corporations (MNCs) such asIntel, Texas Instruments, Fujitsu,Matsushita, Toshiba and others.

The industry continues to post impres-sive growth in investments, export earningsand job generation. Over the last five years,the industry experienced an average yearlygrowth of 48 percent. Electronics industryexports reached $10.6 billion in 1996 andrepresented over half the value of all Philip-pine exports. DTI forecasts electronicsexports to climb to $14 billion by 1997 and$18.55 billion by 1998. Total industry em-ployment was 38,000 in 1985, increasing to

30

69,000 in 1990 and 160,000 in 1996. Semi-conductor companies employ more than 60percent of the industry’s total workforce.Investments by the electronics industryhave been increasing substantially, fromP1.5 billion in 1991, to P5.97 billion in 1993,to P55.57 B in 1995. Some 300 electronicsfirms are registered with the Board ofInvestments.

The software and services subsectorhas also been a consistent export winner,with export revenues reaching US $206million in 1996, up by 51 percent from theUS $125 million in 1995, which was a phe-nomenal increase from the $66 million in1994. Target exports by year 2000 is US $300million. Most of the country’s softwareexporters only serve as subcontractors forbigger software producers in other coun-

Year Exports (US$B) Growth rate (%) Percent to

RP Exports

1992 2.97 20 28

1993 3.78 27 33

1994 4.89 28 36

1995 7.55 55 43

1996 10.61 40 52

Table 6. Export performance of the Electronics Industry

Source: DTI

31

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

89 90 91 92 93 94 95 96 2000

300

250

200

150

100

50

0

Figure 4. Philippine Exports of IT Services

(in US $ million) Source: BETP

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

tries such as the United States. Given theexport statistics, Philippine market share isvery minimal considering the size of theworld market. Worldwide I.T. industryrevenues topped $1 trillion in 1996, with theUS reporting $747 Billion or three fourth ofthe worldwide I.T. revenues for 1996. Thefigures represent growth of 6.5 percent and7.8 percent over 1995 figures, respectively. .The world software market was reported at$253.9 billion in 1996, up by a tenth from$230.8 billion in 1995.

The “Year 2000” or “millennium bug”problem opened up opportunities forFilipino programmers. The TLRC DataCenter was established inside the Clark

32

Cyber City, in cooperation with a Canadianfirm, to offer code conversion solutions.Many of the company’s programmers camefrom nearby resettlement sites and werehired after a two-week training in codeconversion. Government is also workingwith local software consortia to train100,000 programmers.

Locally, the Philippine PC market wasupbeat in 1996. A total of 187,768 units ofPCs valued at $314.28 million were shippedto the country in 1996, a value that is 36percent higher than that of 1995. PCgrowth will be driven by the entry of newerIntel processors into the country. Thegovernment sector will be a bigger marketfor PCs as it implements its computeriza-

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1994 1995 1996

250

200

150

100

50

0

Figure 5. Philippine Exports of IT Servuces, By Type(in US$ million) o Software oData Conversion oTotal

Source: BETP

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

33

tion projects. Likewise the business andhome markets will continue to buy morePCs as prices continue to decline. Therewill be a greater demand for brandedcomputers as the price difference narrowsdown between clones and branded units.The Philippine market for LANs, printersand multi-user systems in 1996 also postedsignificant increases over their 1995 levels.

GovernmentMicrocomputers constitute 99 percent

of all computer systems used in the nationalgovernment, with 142 PCs per nationalgovernment agency being the average.Almost half of all PCs are found in govern-ment owned and controlled corporations(GOCCs).

Out of the 1.2 million governmentemployees, only 0.3 percent are I.T. person-nel. Others are mainly I.T. technicians(researchers, computer/data entry opera-tors) and I.T. professionals (programmers,analysts, consultants), while 9 percent areI.T. managers. Since information systemsplanning was institutionalized in govern-ment in 1989, more and more agencies havestarted to plan and implement a computer-ization program. As of February 1996, 130

34

information system plans have been evalu-ated and endorsed by NCC to DBM.

There is a marked increase in thenumber of major computerization projectsin government involving strategic andhigh–technology integrated solutions.Among them:

s electronic declaration of importentries and automatic computation ofduties and taxes at the Bureau of Customs,which has cut down the time for release ofcargo to only 4 hours from 4-6 days

s computerized motor vehicle registra-tion, decentralized production of driverlicense cards and vehicle plates, and asingle ticketing office for traffic violations atthe Land Transportation Office

s mobile passport issuance services atthe Department of Foreign Affairs throughprovincial extension offices provided citi-zens with easier access to internationaltravel documents

s claims processing at the GovernmentService Insurance System speeded up to 8days from 60 days

s decentralization of Social SecuritySystem services through a central computerlinking some 100 branches allowed easier

35

full service access to members and theirdependents

s computerized professional licensureexaminations at the Professional Regula-tions Commission allowed examinationresults to be issued within 5 days instead of7 months

s partial computerization of the civilregistry at the National Statistics Officeallowed many certificates of birth to beretrieved on the same day of application

s registration of securities at the Bureauof Treasury provided an electronic systemfor recording and certifying transactions ingovernment securities

Among other strategic networks thatgovernment put in place for cost-effectivecommunication and information exchangewere FINLINK at the Department of Fi-nance to facilitate information sharing withits major bureaus and other governmentagencies; POWERNET at the Departmentof Energy; the LEDAC Network for theLegislative Executive Development Advi-sory Council; the National Statistics OfficeQuickStats; Economic Indicators Online(EIO) at the National Economic and Devel-opment Authority website; FINLINK, afinancial information system linking the

36

key financial and revenue institutions of thecountry; computerized voter’s list with theCommission of Elections, tax computeriza-tion in the Bureau of Internal Revenue;computerized trade and industry informa-tion services at the Department of Tradeand Industry; national crime informationsystem at the Department of NationalDefense, entry and departure monitoring atthe Bureau of Immigration, and the “cybercity” established by the Office of the Presi-dent in Subic Bay to showcase I.T. applica-tions in public services. Government is alsogetting wired. As of October 1997, therewere over 100 government agencies con-nected to the Internet, with most of themhaving their own websites featuring infor-mation on their key programs and activi-ties.

The government’s budget for I.T.spending is increasing: the national gov-ernment has an average annual operatingbudget on I.T. of P643 million. P7 billionworth of I.T. assets have been invested bythe national government for the past fiveyears; about P21 billion is expected to beinvested in the next five years. An increas-ing number of local government units(LGUs) have started using I.T., especiallyfor revenue-generating operations: business

Government is

also getting wired.

37

permits and licenses, tax administration,real property taxes, and the Civil RegistrySystem. The Local Government Computer-ization Program (LGCP), the master planfor the use of I.T. in local area developmenthas been completed.

EducationQuality and expertise continue to

distinguish the Filipino I.T. professional.Filipinos find it easy working on legacyapplications as well as fourth generationlanguages. Over 3,000 Filipinos are adeptwith mainframes, and more than 5,000 areexperienced in minicomputer operations.Filipino microcomputer professionals haveexperience with connectivity and datacommunications through Local Area Net-works (LAN) and micro-mainframe links.

Computer schools and training centerscontinue to grow, adding to revenues in theservices sector. In 1996, there were about200 training centers offering short-termcomputer courses, while 30 colleges anduniversities offer degree programs in com-puter science and engineering. The numberof computer schools, colleges and trainingcenters increased to 357 in 1997. The Philip-pines is the second among Asian countriesin terms of the largest number of training

38

facilities for computer programming andcomputer-related courses.

I.T. enrollment is on the rise. The num-ber of students who enrolled in I.T. coursesduring the school year 1995-96 rose 28percent to reach 117,799 from 91,829 enroll-ees in the previous year. I.T. graduatesnumbered 14,944 in school year 1995-96, upby 29 percent from 11,598 reported in 1995.Of the total I.T. enrollment, 76.4 percentwere enrolled in Computer Science, themost popular I.T. course. In terms of re-gional distribution, the NCR accounted for

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Figure 6. IT Enrollment in the Philippines(thousand persons)

40

20

090-91 91-92 92-93 93-94 94-95 95-96

120

100

80

60

Source: CHED, DECS

42,178 of all I.T. students, followed byCentral Visayas with 16,841 and the South-ern Tagalog region with 11,081 enrollees.

A P375 million DECS ModernizationProgram is currently being implemented to

39

upgrade student competency and educa-tional management through computers.A Center for Education and Technologywas established last June 1997, featuringa mini school of the future and a show-room. A program to computerize 97SUCs and 168 private schools all over thecountry was launched in May 1997, witha P300 million budget for the acquisitionof computer hardware, software andtraining. The use of I.T. to improveteaching, learning, and educationalmanagement in basic education wasintroduced through “Schools of theFuture” equipped with multimediafacilities, with the first opened inCamarines Sur in April 1997.

There are about 8,000 libraries in thePhilippines, broken down into 1,755

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○16

12

8

4

0

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90-91 91-92 92-93 93-94 94-95 95-96

Figure 7. IT Graduates in the

Philippines (thousand persons)

Source: CHED, DECS

40

academic 566 public libraries, 5,516 schoollibraries, and 267 special libraries. Onlyabout 500 use computers in their opera-tions, with the latest trends being the use ofCD-ROMs and linking to the Internet via anISP. Seven libraries in the DOST-ESEPproject have interconnected their catalogsand allow access through the Internet. Atleast seven other libraries outside theDOST-ESEP network have integrated andautomated library systems, two of themusing software developed in-house. Thereare at least 4 library networks (i.e., librarieswhich have grouped together for the pur-poses of information sharing) which areconsidering such interconnections. TheNational Library and the Philippine LibraryAssociation, Inc. are currently puttingtogether a National Information Develop-ment Plan.

Research and DevelopmentR&D expenditures, of which 60 percent

comes from government, have remainedvery low. In 1992, R & D expenditures wereestimated at P1.5 billion representing only0.22 percent of GNP; newly industrializingcountries spend 1.5 percent of their GNP onR&D.

R&D

expenditures

have remained

very low.

41

The country does not have the criticalmass of scientists and engineers required toindustrialize. The current ratio of 155scientists and engineers per million popula-tion is way below the UNESCO norm of 380for industrializing countries. The countryhas very few R&D institutions of interna-tional caliber. Support to these institutionsis being provided by the government withvery minimal contribution from the privatesector.

Most of the technologies being used inthe country are imported. This is shown bythe number of patents granted to foreign-ers. Of the 19,404 patents granted for theperiod 1985-1994, 14,164 or 73 percent areforeign owned. During the period 1979-1993, there were 1,504 technology transferagreements (TTA) with foreign technologysuppliers.

Presently, various electronic informa-tion networks are encouraging greaterinter-action within the country’s S&T com-munity: the Science Academe and ResearchNetwork (SARNET) which aims to connectto the Net the 2,000 tertiary and secondaryschools all over the Philippines; the Scienceand Technology Education Network(STEDNET); and the Health R&D Informa-tion Network (HERDIN). DOST also put

Most

technologies

used here are

imported.

42

online the S&T Infoweb, an informationservice which provides a single interfacebetween the Internet and the wealth ofdatabases available from the agency.

Support StructuresIn July 1994, President Fidel V. Ramos

approved the National Information Tech-nology Plan. The NITC was constituted tooversee the implementation of the Plan,now IT21, the country’s blueprint for I.T.development.

The government, with the support ofthe private sector, successfully launchedand completed the 1st nationwide searchfor I.T. excellence last year to encourage thedevelopment of world-class I.T. productsand services. Just recently, the 2nd nation-wide search was launched.

The Intellectual Property Rights Code,Republic Act No. 8293, seeks to imposestiffer penalties and fines for the manufac-ture, distribution and use of unlicensedsoftware. It was passed into law on June 6,1997, and takes effect on January 1, 1998.

The country supports the InformationTechnology Agreement (ITA) which seeks amultilateral elimination of tariffs on infor-mation technology by the year 2000. The

43

Philippines has already reduced to 3 per-cent the duties on selected I.T. productsunder Executive Orders numbered 264 and288 starting 1995 up to the year 2000. Auniform duty of 5 percent is targeted by theyear 2004.

House Resolution 890, sponsored byRep. Leandro B. Verceles, Jr., calls for theinterconnection of local Internet serviceproviders into one Internet exchange. Thisexchange, to be otherwise known as theRPWEB will electronically link up via theInternet the entire government organiza-tion. On November 7, 1997, the Presidentissued Administrative Order No. 332 adopt-ing and promulgating the RPWEB as thenucleus of the Philippine InformationInfrastructure (PII) and directing all gov-ernment agencies down to the local andfield levels to inter-connect through theInternet.

Soon after the approval of IT21 on 28October 1997, in a visit to the United States,President Ramos met with Microsoft Chair-man Bill Gates and concluded four (4)Memoranda of Understanding (MOUs)where Microsoft agreed: to explore thepossibility of cooperation in the area of I.T.core competency and information infra-structure development; to jointly under-

44

take specific projects and activities de-scribed in IT21 such as the establishment ofinterconnected learning centers, as well asto explore such other cooperation possibili-ties as in the development of advancedsoftware; to provide technical assistance intranslating electronic commerce initiativesinto technology applications; and to pro-vide technical assistance, training andadministrative support as may be agreedfor the implementation of a software man-agement and review program to sustain thesoftware legalization process in govern-ment.

Also during the same US visit, thePresident witnessed the signing of an MOUbetween Oracle chairman and chief execu-tive officer Lawrence Ellison and AsiaPacific Economic Cooperation (APEC)Foundation of the Philippines chairmanRoberto R. Romulo, which makes the Phil-ippines the first international participant tothe US$50 million Oracle Academic Initia-tive (OAI). Under the agreement, Oraclewill extend a US$1.5 million grant to theAPEC Foundation to finance the training ofyoung Filipinos in computer softwareapplications, which gives a big boost to thegovernment’s I.T. skills and training pro-gram.

45

T

Part 3

Our Strategy andAction Agenda

he Philippines has adopted a strategyof pole-vaulting the economy into the 21stcentury and the Third Millennium. Itbrings forth a vision of a nation striving tobecome the best it can be: working faster,setting higher goals, making society and theeconomy stronger. The pole-vaulting strat-egy will double per capita income of Filipi-nos and achieve full NIC-hood for thePhilippines by the year 2002. Inflation shallbe brought down to an annual average of 3percent, unemployment to 3-4 percent, andpoverty incidence to 20 percent.

I.T. is an essential tool for this pole-vaulting strategy. It provides both theinfrastructure for competitiveness, and adynamic industry that will itself be globallycompetitive.

46

Phases of Our I.T. DevelopmentI.T. in the Philippines will develop in

phases.

The scattered gains made these pastyears shall be consolidated, and provided anew impetus. Access to information tech-nology for all shall be achieved by the year2000. The telecommunications roll-outprogram and the framework for the Philip-pine Information Infrastructure (PII) will becompleted while the industry will bepump-primed by government outsourcingfor public I.T. projects. The appropriatepolicy and institutional frameworks foreffective cooperation between governmentand industry groupings will be put in place.Government will extend support to localindustry for their marketing, financing,R&D, and manpower requirements as thelatter seeks its global niches.

As I.T. activities become more focusedon the nation’s competencies and morepervasive throughout the archipelago,government will turn over the lead role inI.T. development to the private sector. Bythe year 2005, private business will havemoved into its global product and serviceniches and built up the country’s momen-tum towards sustained growth in these

47

areas. Particular niches in education andtraining are expected. The efforts of privatebusiness will be supported by continuinghigh levels of growth in telecommunica-tions, the diffusion of I.T. use throughoutindustry, and the effective use of I.T. ingovernance.

Within the first decade of the nextcentury, IT21 will realize its vision of thePhilippines as the Knowledge Center inAsia.

Our I.T. Development StrategyIT21 relies on government and private

industry playing lead roles in pushingforward I.T. use and I.T. production in thecountry.

The role of government as in Philip-pine I.T. development is defined as that ofenabler, lead user, and partner of the privatesector. As enabler, the government willprovide the national information infrastruc-ture and the policy, program and institu-tional environment that will encourage thegrowth of I.T. use and the I.T. industry inthe country. As lead user, the governmentwill implement leading edge I.T. applica-tions and provide examples of “best prac-tice” in the use of I.T. for the delivery of

48

government services. As partner of theprivate sector, the government will under-take key I.T. projects for participation andimplementation by business, the academe,the science and technology community, andcivil society.

As private business is spurred bygovernment actions, it will seek its globalcompetitive niches and develop the Philip-pines as a highly competitive productionplatform for global electronics and I.T.-related industries in the Asia-Pacific. In theshort-term, they must seize local and over-seas market opportunities in solutions tothe Year 2000 (Y2K) problem, popularlyknown as the “millennium bug”, inInternet/intranet/WWW applications, andin outsourcing by the Philippine govern-ment for its I.T. development projects. Overthe medium to long-term, the I.T. industryshould develop strategic partnerships forturnkey production and the development ofI.T.-assisted education materials — logicalniches for Philippine industry. All through-out, they must collaborate closer amongthemselves and with other stakeholders inI.T. development in the Philippines toadvocate for whatever policy, program andinstitutional reforms may be necessary, and

49

to improve service delivery, marketing, andR&D through common efforts.

Those involved in telecommunications,education and R&D will each play theirown supportive roles — telecommunica-tions for the physical infrastructure, educa-tion for the adequate preparation of thelabor force, the R&D community for devel-oping local products and applications, andfor adapting technology sourced overseasto Philippine conditions — as well as act ina broader capacity as government or pri-vate business.

All stakeholders, together, shall com-municate and advocate about the impor-tance of I.T. for Philippine development.They shall help foster an I.T. culture amongall Filipinos.

Our Action Agenda:This summary listing of policies and

programs is divided into the three phases ofIT21. A more detailed listing is providedfor the first phase, while indicative thrustsare given for the succeeding phases. Thisdocument will be continuously updated tokeep pace with developments in marketsand technology.

50

Phase I. Providing the ImpetusBy the year 2000, the Philippines will

have laid the infrastructure for every busi-ness, every agency of government, everyschool, and every home in the Philippinesto have access to information technology.

A. Provide the Policy Environment1. Adopt and implement policies to

promote increased investments in I.T. andrelated electronics industries — e.g.,through strategic partnerships, venturecapital.

Specific Actions Time Frame Lead Agency/

Organization

Promulgate administrative/legislative measures to

promote wider private sector participation in venture

capital financing to expand the capital base for I.T. R&D

and other I.T.-related development ventures

Adopt measures to promote strategic partnerships and

alliances by local companies/institutions with leading

international R&D institutions, technology providers,

developers, and manufacturers

Promote private sector investments in product- and

location-specific I.T. projects

Promote technological innovation and experimentation

by creating new products, services and applications

1997 � 1998

1997 � 1998

1997 � 1998

1997 � 1998

DTI-BOI, DOF,

PCCI

DTI-BOI, DFA,

DOST, ITFP

DTI-BOI, PEZA

DOST, DTI,

ITFP-PSA

51

Focus R&D on high-value added I.T. products and

services as well as on product creation/design and

improvement in high growth sectors such as telecom-

munications, software development (information

systems, common application packages, educational/

courseware packages, multimedia applications, computer

animation, promotional packages, public information,

news materials, multimedia), telemedicine, e-commerce,

etc.

2. Adopt more investor-friendly poli-cies, systems and procedures in govern-ment.


Organization

Fast-track legislation/adoption of administrative measures

to further liberalize foreign investment

Establish fast lane services for foreign investors/business-

men at ports of entry and when transacting business

with government to create investor-friendly environ-

ment

Organize task force on monitoring and public account-

ability aimed at making the administrative and policy

environment for more conducive for investing and doing

business in the Philippines

1997 � 1998

1997 � 1998

1997 � 1998

DTI-BOI, DOF

DOTC, DTI,

DOF

DTI


Organization

1997 � 2005 DOST, DTI-BOI,

PETEF, ITFP-

PSA

52

3. Implement Philippine commitmentsto international agreements that affect theI.T. sector favorably — e.g., the I.T. Agree-ment (ITA).


Organization

Implement Philippine commitment to the I.T. Agreement

(ITA) based on the tariff phase-out schedule submitted in

Geneva on 25 April 1997

1997 � 2000 DTI, ITFP

4. Adopt administrative measures toeffectively enforce the laws on intellectualproperty rights (IPR), particularly as theyaffect I.T. products and services.


Organization

Adopt administrative measures to implement the

intellectual property rights (IPR) law, particularly on I.T.

products and services

1997 � 1998 DTI, ITFP

5. Rationalize and coordinate develop-ment of technoparks and cybercitiesthroughout the country for greatercomplementarity in investments and infra-structure development.


Organization

Develop a master plan for technopark and cyber city develop-

ment

1997 � 1999 DOTC, DOST,

DTI

53


Organization

Network technoparks and cyber cities with educational

and R&D institutions and organizations through high

bandwidth telecommunications facilities

1997 � 2000 DOTC, DTI

B. Enhance the Physical Infrastructure1. Accelerate universal access (i.e.

making telecommunications services acces-sible and affordable to all) by completingtelecommunications programs, especially inunderserved areas.

Complete the roll-out programs of the telecommunica-

tions providers, especially in underserved areas

Complete the Municipal Telephone Program

Complete the establishment of the telecommunications

backbone through the interconnectivity of the various

Philippine telecommunications providers


Organization

1997 � 1998

1997 � 1998

1997 � 1998

DOTC, NTC

DOTC

DOTC

2. Fast-track the formulation andimplementation of the Philippine Informa-tion Infrastructure (PII).


Organization

Accelerate government interconnectivity, information

sharing, and communication via the Internet, with the

RPWEB as the Philippine Intranet

1997 � 1998 DOTC, DOST,

PMS

54


Organization

Organize task forces to identify, develop, and publish in

the Internet sectoral/department/agency homepages to

facilitate wider public access to information on key

governmental policies, programs, and services

Adopt measures to encourage wider use and develop-

ment of value-added services and networks (e.g. e-

commerce, EDI, electronic libraries, telemedicine, private

and government networks, ATMs, public information

kiosks, life-long learning, law enforcement and public

safety, interactive access to government services,

electronic government, and the like)

1997 � 1998

1998 � 2000

NCC

3. Intensify investment promotion inthe telecommunications industry.

4. Formulate appropriate cyber lawsin the use of networks, particularly theInternet, to ensure information securityand network reliability.

5. Promote telecommuting/teleworking, particularly in softwaredevelopment and multimedia production.


Organization

Intensify investment promotion in the telecommunica-

tions industry

1997 � 1998 DTI-BOI,

55


Organization

Formulate appropriate cyber laws in the use of net-

works, particularly the Internet, to ensure information

security and network reliability

Promote telecommuting/teleworking, particularly in

software development and multimedia production

1997 � 2000

1998

DOTC

DOTC, DOST

DOTC, ITFP-

PSA, NCCC

s Develop the I.T. Manpower Base1. Produce a critical mass of I.T. profes-

sionals and I.T.-literate manpower, includ-ing competent I.T. educators and teachers atall levels.


Organization

Incorporate I.T. in the primary, secondary, and tertiary

curricula

Implement I.T.-based/computer-aided learning in basic

education, including the pre-schools

Upgrade competencies of educational/training institu-

tions with I.T.-based tools and programs

Re-orient engineering and other I.T.-related courseware

toward greater responsiveness to industry needs

Develop instructional/learning materials especially in the

sciences and engineering, math and technology

1997 � 2000

1997 � 2000

1997 � 2000

1997 � 2000

1997 � 2000

DECS, CHED,

TESDA, DOST

DECS

DOST, DECS,

CHED

CHED, DTI,

DOST, ITFP,

PCCI

CHED, DECS,

DOST

56

2. Designate from among I.T. traininginstitutions, universities or colleges I.T.Centers of Excellence as a form of recogni-tion and reward.

3. Organize a nationwide network ofCore Competency Institutions in I.T., inpartnership with local and internationaldevelopment institutions and businessorganizations.

4. Conduct continuing I.T. educationfor teachers/trainors, I.T. practitioners andworkers.

5. Adopt dual-tech approach in I.T.education and training.

6. Establish high-quality distanceeducation and learning.

7. Develop and implement life-longlearning through the Internet.


Organization

Select/Designate from among I.T. training institutions,

universities or colleges I.T. Centers of Excellence as a

form of reward/recognition . Funding support for

expanded training facilities and operations go with the

award.

1997 � 2000 DOST, CHED,

DECS, TESDA

57

Organize a nationwide network of Core Competency

Institutions in I.T., in partnership with local and interna-

tional development institutions and business organiza-

tions, with the Philippine Software Development

Institute (PSDI) as the National Core Competency

Center.

Conduct continuing I.T. education for teachers/trainors,

I.T. practitioners and workers

Adopt dual-tech approach in I.T. education and training

Establish high-quality distance education and learning.

Develop and implement life-long learning through the

Internet


Organization

1997 � 2005

1997 � 2000

1997 � 2005

1997 � 2005

1997 � 2005

DOST, CHED,

DFA, DTI

CHED, DECS

CHED, DTI

CHED, DECS

DOST, DOTC

D. Pump-Prime I.T. Industry Development1. Implement a government-wide

computerization program, with emphasison the development and deployment offront-line, mission-critical and commonapplication information systems


Organization

Fast-track the development and implementation of

information systems for government frontline services

such as civil, vehicle, land registration, licensing, health

and other social services, etc.

1997 � 2000 PMS, DBM,

NCC

58


Organization

Develop and implement government mission critical

information systems such as planning, budget manage-

ment, execution and accountability, investment

programming tax administration, revenue collection,

justice administration, public safety, environment

preservation, labor and employment, etc.

Standardize and deploy common application information

systems in government, including the local government

units

1998 � 2001

1997 � 2002

DBM, NCC,

PMS

DBM, DILG,

PMS, NCC

2. Implement the RPWEB to intercon-nect all government offices and unitsthrough any Internet Service Provider (ISP)in their area, to interconnect all ISPsthrough Internet exchanges.

3. Organize and monitor governmentand business response to the Year 2000(Y2K) problem and opportunity.

4. Set up an I.T. Development Fund orother appropriate financing scheme foroutsourcing information system develop-ment and deployment in government.

5. Promote technological innovationand experimentation by creating new prod-

59

ucts, services and applications, and devel-oping value-added services and networks.

6. Provide appropriate financing sup-port to allow active participation by theprivate sector in R&D and in the develop-ment and the incubation of new productsand solutions.

7. Fast-track measures to streamlineadministrative processes and procedures ingovernment procurement, budgeting,accounting, auditing, monitoring, report-ing, etc.


Organization

Implement the RPWEB to (a) interconnect all govern-

ment offices and units, including schools, colleges and

universities, government corporations, as well as those

at the local level, by authorizing the use of savings for

Internet access, through any Internet service provider

(ISP) in their area, to facilitate faster communication and

data interchange in government; (2) interconnect all

ISPs through Internet exchanges for greater connectivity

among users in the country; and (3) speed up imple-

mentation of the telephone roll-out programs, particu-

larly in unserved and underserved areas in the country

Organize and monitor government and business

response to the Year 2000 (Y2K) problem, including

1997 � 1998 DOTC, DBM,

PMS, NCC

60


Organization

government sector participation in marketing programs/

trade shows for Philippine developed software solutions

Set up an I.T. Development Fund or other appropriate

financing scheme for outsourcing IS development and

deployment for mission-critical and common applica-

tion systems for government, including the local

government units (e.g. procurement and accounting

systems, financial management, budget allocation,

execution, and reporting systems, personnel and payroll

systems, tax mapping, land registration, valuation, and tax

collection systems, civil, vehicle, and land registry

systems, etc.)

Promote technological innovation and experimentation

by creating new products, services and applications, and

development of value-added services and networks (e.g.

e-commerce, EDI, electronic libraries, private and

government networks, ATMs, public information kiosks,

and the like)

Provide appropriate financing scheme and/or set up

government fund to allow active participation by the

private sector in R&D and in the development and

incubation of new products and solutions to spur the

widespread use of I.T. both in government and in

business

Fast-track measures to streamline administrative

processes and procedures in government procurement,

budgeting, accounting, auditing, monitoring, reporting,

etc.

1997 � 1999

1997 � 1998

1997 � 2000

1997 � 2000

1997 � 2000

DTI, DOST,

NCC

DOST

DOST, DTI,

ITFP

DBM

DBM

61

E. Organize for Action: InstitutionalReforms

1. Reorganize the NITC to broaden andstrengthen private sector involvement in ITdevelopment activities.

2. Constitute NITC task forces to carryout specific IT21 programs/actions.

3. Organize a 50-member private sectorAdvisory Council to facilitate meaningfulprivate sector participation in the implemen-tation of IT21.

4. Strengthen the NCC to enable it tobetter carry out its primary mandate ofpromoting widespread use of I.T. in govern-ment.

5. Create a comprehensive databasemanagement, monitoring andbenchmarking system for key I.T. indicators.


Organization

Organize the expanded/reorganized National Informa-

tion Technology Council (or the National I.T. Board,

NITB)

Constitute the NITC/NITB task forces to carry out

specific IT21 programs/actions

1997 � 1998

1997 � 1998

NITC

NITC

62


Organization

Organize 50-member private sector Advisory Council to

facilitate meaningful private sector participation in the

implementation of the IT21.

Strengthen/Re-engineer the NCC as part of the newly

created NITB to enable it to better carry out its primary

mandate of promoting widespread use of I.T. in govern-

ment through the formulation of appropriate I.T.

policies and guidelines in the development of informa-

tion systems and in acquiring I.T. resources; providing

technical assistance; and providing I.T. training to

government

Create comprehensive database on I.T. and set up

monitoring and benchmarking system for key I.T.

indicators

1997 � 1998

1997 � 1998

1997 � 1998

NITC, PMS

NITC, DBM,

PMS

ITFP, DTI

F. Marketing the National I.T. Plan for the21st Century (IT21)

1. Organize task forces to undertake anationwide communication and advocacyprogram, including focused I.T. trade mis-sions and international roadshows.

2. Develop, produce, and disseminatepromotional materials on IT21 and thePhilippine I.T. Action Agenda

3. Create a Philippine web site promot-ing IT21 the I.T. Action Agenda

63


Organization

Organize task forces to undertake a nationwide commu-

nication and advocacy program, as well as extensive and

more focused I.T. trade missions and international road

shows to promote the Philippines as I.T. investment

destination and a Knowledge Center in Asia in the 21st

Century

Develop, produce, disseminate marketing/promotional

materials on the IT21 and the I.T. Action Agenda

Create the Philippine IT21 web site

1997 � 2000

1997 � 1998

1997 � 1998

NITC, DTI, DFA

DTI, DFA

NITC

Phase II. Building Up MomentumBy the year 2005, I.T. use will be perva-

sive in daily life. Philippine companies willbe producing competitive I.T. products forworld markets.

s Diffuse I.T. use (preferably usingPhilippine solutions) throughout privateindustry

s Develop Philippine I.T. productsand services for the local and global mar-kets.

s Highlight “best practices” in publicservice delivery through the use of I.T. ingovernance

64

s Develop global competence in I.T.education and training

s Sustain high levels of growth in thetelecommunications sector

Phase III. Realizing Our VisionWithin the first decade of the 21st

century, the Philippines will be a Knowl-edge Center in Asia: the leader in I.T. edu-cation, in I.T.-assisted training, and in theapplication of information and knowledgeto business, professional services, and thearts. More specifically, the following ac-tions shall be undertaken:

s Develop a global niche for Philip-pine I.T. and knowledge products andservices.

s Sustain I.T. innovation geared to-wards knowledge creation, managementand dissemination.

s Push for higher levels of growth forthe Philippine I.T. industry.

s Sustain the Philippine’s role asKnowledge Center in Asia

s Highlight “best practices” in peopleempowerment through the use of I.T. ingovernance

65

s Attain the goal of universal accessfor telecommunications.

By the first quarter of the 21st century,the Philippines would have found its nicheamong the major knowledge centers of theworld. It would be a major player in thedesign and development of significantknowledge-based products and services.Most if not all of government and privatesector workplaces, homes and schools willhave access to the global information super-highway. Greater efficiency and productiv-ity in communications among varioussectors would have been achieved throughthe modernization of the country’s telecom-munications facilities and production tools.As the President said during his State of theNation Address (SONA) on the ThirdSession of the Tenth Congress on July 28,1997,

This “survival-of-the-fittest’’ socio-economic and political order imposes severepenalties on the inefficient, the unskilled, thenon-productive, the timid- and the disunited.But great opportunities await the intelligent,the self-disciplined, the innovative, and thedaring.

This is what we must resolve to make ourbeloved Philippines these next 10-15 years.

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