Statement by the Stratbase Group: “Ensuring access to secure digital infrastructures”

One of the most significant impacts of the COVID-19 pandemic is the sudden acceleration in the use of digital technologies. The reality of mobility restrictions has created a surge in transactions using digital payment and remittance systems as the preferred means of financial transaction in this new normal. It is safe, efficient, has less operating cost, fast, and most of all, promotes financial inclusion. However, the unbanked poor are not able to benefit from these online financial services and, like all cloud-based technologies, they have security risks as well.

In a recent virtual event organized by the Stratbase ADR Institute, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier emphasized that technological innovations can indeed remove the barriers to financial inclusion, if channeled or utilized the right way. She added that digital transformation – including cloud-based banking – is within our reach and it is up to us on how to utilize these tools to improve our economy. However, accessibility and usability of these technologies depend on the fast expansion of the country’s digital infrastructure. This is an urgent requirement of nationwide scope that can only be addressed with a whole-of-society approach.

In light of these developments, Stratbase calls for stronger government collaboration with the private sector in the development of digital infrastructures, which could enable the widespread use of the digital technologies needed in our transition to the new normal.

During the Pilipinas Conference organized by the think tank Stratbase ADR Institute in late November 2020, Ayala Corporation Chairman and CEO Mr. Jaime Augusto Zobel de Ayala stressed that the investment component of the country’s economic equation, especially in digital infrastructures, must be jumpstarted. Both the public and private sectors have a role to play: the private sector should start reallocating resources, building new jobs, and getting the economy to move again, while the public sector should increase spending to boost infrastructure development. He added that when the pandemic hit, there was no choice but to shift to digital technologies to ensure the safety of the people and to prevent the further transmission of the virus.

In fact, the private sector has committed increasing investments to build cell site towers to continuously improve their services. During a recent press briefing, Harry Roque, Presidential Spokesman thanked the two major telecommunication companies for their improvements. In the briefing, Mr. Ernest Cu, the President of Globe Telecom Inc., said they have spent Php 50 billion this year and have marked improvements in their 4G/LTE and 5G services. By next year, Globe will spend Php 70 billion to create 25 times more fiber to home and 2,000 additional cell towers. Meanwhile, Mr. Al Panlilio of Smart Communications, Inc. said they have given free upgrades to over 800,000 customers. Smart in the past five years had invested a total of Php 260 billion with Php 73 billion invested last year.

Expansion and upgrading of our broadband services must be sustained, and government must institute responsive policies that ensure adequate public sector investments to operationalize a nationwide digital backbone harmonized with ongoing private sector capitalization to build a network that will deliver broadband and telecommunications services to all. Without this level of digital infrastructure network in place, the government’s vision for inclusive financial services will be blocked by a digital divide between those who have good connectivity and those who have not.

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