Confounding investors

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

If there is one thing the Philippine government is an expert at, it is shooting itself in the foot and continually changing the rules of the game for foreign and local investors, so much so that we continue to be an economic laggard in the Southeast Asian region, with investors wary of our wishy-washy economic policies.

This penchant of the government to revise its economic policies has resulted in the failure of our country to build a strong industrial sector in terms of manufacturing, transportation, distribution, mining, shipping and construction.

We have likewise not been able to build competitive technology, health care, consumer staples, energy and utilities sectors either, relying instead on attracting foreign investors while regularly changing the rules of the game.

Even our agriculture sector is in such a sorry state that we cannot ensure our own food security in terms of our staple grain — rice — and must import from our neighbors.

We are barely self-sufficient in chicken and pork production and mostly dependent on beef and dairy imports since we do not raise any significant amount of cattle even for our meat or dairy requirements.

Our lack of a strong industrial base thus makes us vulnerable in terms of trade, with our only strength in the export of our valuable human resources — adaptable, hardworking and educated overseas Filipino workers.

No wonder foreign investors and foreign investments continue to avoid us and head to our neighboring Asian and ASEAN competitors.

Our economic policy in the past has been myopic and protectionist, afraid of foreign competition — which has only made our products inferior and uncompetitive rather than innovative.

And when we do manage to get something right, such as with our telecommunications sector, our government finds another way to shoot itself in the foot again.

Our local telecommunications sector, which has allowed us to gain some international recognition as the texting capital and among the world’s heaviest internet users, is now under threat by the decision of the Department of Information and Communications Technology (DICT) to allow new players to piggyback on the investments and infrastructure that the two major telcos, Globe and Smart, have built and installed to expand data transmission in the country.

From an initial monopoly by the Cojuangco family under the PLDT Group, deregulation undertaken during the Ramos administration allowed a brief period in which several small telco companies tried to compete before eventually consolidating and resulting in two major players— Globe Telecom, a joint venture between Ayala Corp. and Singapore Telecommunications or SingTel, and Smart Communications, which is funded by the First Pacific Group and is also part of the PLDT Group.

The third minor telco provider is DITO Telecommunity, which has been quite slow in building up its infrastructure and capacity.

Converge, owned by Dennis A. Uy, is a telco provider that is still in the process of building itself up to become a major player.

The Philippine government, unlike its ASEAN neighbors, has not invested in developing a telecom backbone for the country and has instead relied on private investors to pour in investments. Now, it wants to open up the market to more players, but this time without requiring the new local and international players to bring in much-needed investment for the capital-intensive infrastructure buildup required by the sector.

Under the Implementing Rules and Regulations (IRR) of the Konektadong Pinoy Act, existing telco operators must agree to lease out their towers and infrastructure to enable greater interconnection to areas still not serviced by existing players.

However, if no new infrastructure is required to be built by new players, the forced lease-out of existing capacity would likely result in congestion that could lead to an overall deterioration of service.

The open-access framework mandated under the KPA requires open and non-discriminatory access to digital infrastructure and networks.

Unfortunately, doing so would discourage infrastructure investment, as maintaining network infrastructure requires high upfront capital expenditures and long-term recovery periods.

If investors are compelled to provide open access to competitors under regulated or fixed terms, the incentive to invest in new capacity and advanced technology deployments will be diminished.

Returns on investment (ROI) could be diluted when privately built and financed networks are opened to other entities that did not share in the initial construction, financing and maintenance costs. This undermines the principle of equitable investment and risk-sharing.

The implementation details on “reasonable access fees” remain vague, risking a form of price regulation that lacks a clear cost-recovery methodology. Without transparent cost modeling or an independent valuation mechanism, investors may face revenue uncertainty and limited ability to recoup infrastructure expenses.

The KPA IRR also requires access to and sharing of passive and active infrastructure, which may result in increased operational risk and liability when multiple operators utilize shared sites and systems.

Although such arrangements are cost-efficient in theory, they are operationally complex in practice, leading to coordination challenges in areas such as maintenance scheduling, power provisioning, site access, fault isolation and emergency repairs.

Mandated sharing may also compromise network security and resiliency, especially when cybersecurity, technical and quality standards among new players vary significantly. A breach or equipment failure from one operator could cascade to others sharing the same facilities.

Shared-access negotiations and compliance requirements could delay deployment timelines, as parties must execute technical agreements, perform joint inspections and resolve disputes before implementation. This adds layers of bureaucracy and potentially slows infrastructure rollout in high-demand or remote areas.

Another IRR provision on spectrum management reform introduces transparent and competitive spectrum allocation and enables spectrum recall. However, spectrum recall provisions introduce regulatory uncertainty that may deter operators from making substantial investments in frequency-dependent infrastructure such as cellular towers, antennas and base stations.

Investors require predictability and long-term tenure for planning and cost recovery. Sharing and reassignment of spectrum, while well-intentioned, could lead to interference risks and reduced network quality if not governed by robust technical and operational coordination.