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3 ways to bridge the digital divide in the Philippines

Blogs & Features

November 10, 2022

Many Filipinos rely on social media platforms to get daily news and to promote their personal and commercial endeavors, so it can be a surprise to find out that there’s still a significant discrepancy in the use of digital technology within the country. Despite there being more than 73 million internet users in the Philippines, the country is lagging behind in terms of digital adoption, particularly in the area of e-commerce, compared to its neighboring nations. This is seen as one of the major reasons why e-commerce only contributes 0.5% of sales out of the country’s total retail sales volume, even though about 20% of the country’s GDP originates from retail trading. 

The digital divide has not only affected everyday consumers and retailers; it has also made a significant difference in how students were able to access educational materials when public and private school systems shifted to distance learning. Now that much of the world is embracing the digital revolution, it’s a must to fast-track and strengthen the adoption of digital solutions in the Philippines. Otherwise, the country risks getting left behind. Here are some of the strategies that the nation, as a whole, can use to bridge the digital divide:

Strengthen digital infrastructure

Increasing investments in digital infrastructure is a significant step in improving equitable access to the internet and the use of smart devices. There are still many areas outside of major cities in the Philippines where mobile network signals are spotty at best, and the communities living in these locations will need improved infrastructure so that they can consider digital solutions as practical options. 

This is a need that Unity Digital Infrastructure, Inc. is designed to address. The tower company, which is a joint venture of Aboitiz InfraCapital and Switzerland-based Partners Group, bolsters  the capabilities of partner telecommunications companies by constructing common towers where these facilities are needed the most. Common towers allow mobile network operators to fast-track their expansion at reduced costs, thereby enabling communities that were once outside their areas of coverage to access data and communications services at reasonable rates. 

Another Aboitiz InfraCapital project that aims to improve digital infrastructure is the deployment of small cell sites. Small cells play a key role in the deployment of 5G services, allowing users to access larger quantities of data at higher speeds. Currently, Aboitiz InfraCapital has already deployed  over 300 small cell sites in Subic, Cebu, and Davao for Globe Telecom and DITO Telecommunity.

Promote digital payment options

According to the 2019 Financial Inclusion Survey conducted by Banko Sentral ng Pilipinas, more than 51 million people or a total of 71% of the adult population in the country are unbanked. Among the primary reasons why the respondents didn’t have bank accounts are the lack of funds, the perceived lack of need for an account, and not having the required documents to set up an account. A number of banks have made steps in addressing the situation by offering low-maintenance accounts and simplifying their requirements for account applications.

Online banking in the Philippines is still in its infancy, but its wide adoption will be a significant step in ensuring that people from all walks of life are able to participate in commercial activities online and offline. The good news is that many banks ramped up their efforts to improve their online banking services, including account applications, in the past months. At the same time, there are plenty of homegrown digital wallet apps that Filipinos can use in their everyday transactions. 

Having these options empowers more consumers and retailers to use and manage their money more easily. Using digital payment is also a much safer and more convenient alternative while the country is in a health crisis, as there’s no need for sellers and buyers to meet in person just to complete their transactions.

Reduce the cost of using logistics solutions

As people shift to using digital channels to earn and spend their money, they also become more dependent on logistics services providers to send or receive the goods that they are trading or buying. There’s been a significant growth in the logistics industry in the past several years, and this has provided both consumers and retailers with plenty of options when it comes to delivering their wares and purchases. 

Unfortunately, the cost of logistics services in the Philippines is still significantly higher compared to those of its neighbors in Asia. To promote healthier competition between logistics services providers, it’s a must for the government to review its regulatory constraints and the cost of setting up a logistics company in the country. This, in turn, can help lower the cost of logistics services and encourage more Filipinos to use digital channels to conduct their businesses. 

Now is the best time to start bridging the digital divide

The wide gap between those who have access to digital solutions and those who have not is one of the many ongoing issues in the Philippines that the COVID-19 pandemic has highlighted in the past several months. However, it’s not yet too late to tackle this challenge. It’s imperative for Filipinos to invest in digital infrastructure and education, which are keys to promoting equitable access to digital solutions. This move will help ensure that the next generation of Filipinos will be capable of navigating their way around digital environments, a skill that will help the country retain its competitive edge in the global playing field in the future.

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