The Philippines slid near the tail end of the global information technology race last year. According to the Global Information Technology Report 2002-2003 prepared by the World Economic Forum, the World Bank’s infoDev Program and global business school INSEAD, the Philippines is 62nd in a survey that gauged the “networked readiness” of 82 economies.

The recent report showed the Philippines trailed behind Hong Kong SAR, South Korea, China, Malaysia, India and Thailand, but performed better than Indonesia and Vietnam. Compared to its rank in 2001 among 75 economies, the Philippines has deteriorated along with Hong Kong SAR and Indonesia while the rest of its Asian neighbors raised their standings. China’s and India’s rankings, in particular, rose by double digit.

The Networked Readiness Index (NRI) considers 64 aspects of development in information and communication technology (ICT), including ICT use by individuals, governments and businesses to guide economies in crafting globally competitive IT policies.

Harvard University’s Center for International Development originally defined NRI as “the potential and degree of preparation of a community to participate in the Networked World.” In the recent Global IT Report, the NRI definition evolved to “the degree of preparation of a nation or community to participate in and benefit from ICT developments.” Three elements comprise NRI, namely: the environment for ICT offered by a given economy or community; the readiness of the economy’s key stakeholders (individuals, businesses and governments) to use ICT; and the usage of ICT among the stakeholders.

ENVIRONMENT COMPONENT INDEX
The Environment Component Index evaluates an economy’s conduciveness in providing the right conditions for the development and usage of ICT as determined by three sub-indices — the market, political/regulatory and infrastructure conditions.

The Philippines ranked 57th in the Environment Component Index trailing all in Asia, except for Indonesia and Vietnam. The Philippines rated poorly on the availability of scientists and engineers, brain drain, overall infrastructure quality, local switch capacity and the number of telephone mainlines.

Nevertheless, the country ranked high in terms of prevalence of foreign technology licensing (16th), the number of telephone mainlines per employee (18th) and the number of telephone faults per 100 mainlines (20th). Likewise, the Philippines fared relatively well in terms of competition in the telecommunications sector, its legal framework for ICT development, the presence of domestic software companies in international markets, local manufacturing of IT hardware and liberal government restrictions on internet content.

READINESS COMPONENT INDEX
The Readiness Component Index measures the capability of an economy’s citizens, business sector and government to leverage the potential of ICT. An economy’s ICT readiness is determined by its relevant skills for using ICT among individual users; local government usage of ICT for its procedures and services; and access and affordability of ICT for the private sector.

The Philippines ranked 70th in the Readiness Component Index, the lowest in Asia. The country rated poorly in the quality of math and science instruction, public access to the internet, capacity for innovation, cost of business telephone subscription and competence of public officials.

Despite generally lackluster performance and poor scores on the costs of business and residential phone subscriptions, the Philippines emerged on top in providing the cheapest rates for local calls along with Hong Kong, New Zealand and the United States.

USAGE COMPONENT INDEX
The Usage Component Index assesses the impact of ICT on an economy’s population, business, government or its principal stakeholders. This component includes shifts in behaviors and lifestyles as well as other economic and non-economic changes brought about by the adoption of ICT.

The Philippines still trailed behind its other Asian neighbors at No. 54 in the usage component index. Although the country got better ratings in terms of usage of online payment systems, internet for general research, email for internal communications and the presence of wireless e-business applications, the Philippines was found wanting in such areas as the availability of radios and television sets, the number of narrowband subscribers and businesses using e-commerce.

POCKETS OF LEADERSHIP
INSEAD’s Arnoud de Meyer considers the Philippines one of the economies comprising the third group of pockets of leadership in Asia. Hong Kong, Taiwan, Korea and Singapore compose the first group. Thailand and Malaysia belong to the second group. Together with Indonesia and Vietnam in the third group, the Philippines “should continue to be on the further development of a skilled workforce and on basic infrastructure.” Equal priority should likewise be given in developing basic services such as roads, water supplies and electricity and in developing ICT infrastructure.

The government’s highest policy making body for ICT, the Information Technology and E-Commerce Council (ITECC) laid out a detailed roadmap for the country’s ICT sector for 2003. This plan is crucial in determining the Philippines’ present standing and how it should play its part in the global ICT market. Establishing an e-government will result in improved efficiency, accessibility, transparency and accountability in the delivery of basic services to the public. The ITECC will also oversee the implementation of such projects as the streamlining of processing and skills tracking of overseas foreign workers (OFWs), the creation of a universal government portal, expansion of the e-procurement system to cover all government purchases and to jumpstart the computerization of local government units. The government has already allocated P4 billion this year for e-government projects that will link various government agencies and improve the speed of online transactions.