On December 07, the US-ASEAN Business Council’s Philippines Committee held its 2022 Q4 committee call. The call featured a briefing from USAID regarding their USAID's SPEED & BEACON. Following the call, the Council presented a recap of activities for the fourth quarter of 2022 and plans for 2023.
Welcome Remarks – US-ABC
The Council was able to send a compiled policy recommendation letter to the government agencies which garnered positive feedback. We hope that these will develop into further engagements.
The Council has also been able to engage with the new administration, most notably during the sidelines of UNGA and through the annual Philippine Business Mission held last October.
Introduction of guest speakers
Representing USAID, we have Mr. John Avilla who is currently the Senior Economic Growth Specialist of USAID Philippine’ Office of Economic Development and Governance and leads USAID’s digital program. He has extensive experience managing USAID programs such as USAID SURGE and USAID TRADE.
Now, representing USAID SPEED, we have Ms. Shimz Manaois-Battung who is a Fiscal Specialist of USAID Philippines. An expert economic and public policy research and analysis. Ms. Manaois-Battung was previously in the Regional and Sustainable Development Department of the Asian Development Bank.
Introduction to USAID Better Access and Connectivity (BEACON)
BEACON is a $33M, five-year government phasing activity meant to assist primarily the DICT (Department of Information and Communications Technology) and the NTC (National Telecommunications Commission).
This is a part of an ongoing whole of government effort under the Indo-Pacific strategy of with DCCP (Digital Connectivity and Cybersecurity Partnership) as one of its pillars.
The US Government recently passed the Chips Act which can potentially provide further boost towards the digital work in the Philippines.
BEACON’s Activity Specifications
BEACON is a technical assistance activity where training, advisory services, knowledge products, and local grants are provided.
It is primarily focused on digital infrastructures that aid economic growth initiatives.
BEACON’S Core Expertise and Capabilities
BEACON is composed of economists, engineers, policy analysts, cybersecurity specialists, and lawyers that have expertise on the BEACON objectives.
BEACON’s Four Objective Areas
Objective 1: Improve the Quality of ICT and Logistics Infrastructure
Strengthening network infrastructure, service affordability, digitalization in logistics systems and in ICT skills and institutional capacities
BEACON helps in building up DICT capacity and its execution of the national broadband program.
It plans to strengthen network infrastructure and improve connectivity in underserved areas.
BEACON is currently talking to LGUs to encourage and demonstrate how to facilitate network expansion in their geographies and improve administrative actions.
It plans to introduce Open Radio Access Network (RAN) to the market and support emerging connectivity technologies focusing on satellites.
Objective 2: Strengthen Enabling Government and Regulatory Governance
Developing policies that address critical issues of telecommunications, spectrum, access, connectivity, safety, privacy, and inclusion
It aims to assist some of the interventions to improve the overall digital policy framework of the government.
BEACON helped in passing the Public Service Act.
It is currently assisting in the drafting of the Implementing Rules and Regulations (IRR) of the Public Service Act.
The binding constraints observed in the market:
The Philippines is the only country in the world where you need to have a Congressional law that allows you to be a service provider.
The country needs to improve spectrum management policy.
There is a lack of fiscal independence of the Regulator from the executive branch.
Objective 3: Reinforce Cybersecurity Protections
Improving the capabilities of government to prepare and mitigate against cybersecurity threats and strengthening the cybersecurity ecosystem in the Philippines
BEACON assists in boosting government capacity to fight against cybersecurity threats and attacks.
It works closely with the cybersecurity bureau of the DICT to prepare for cybersecurity threats, focusing on critical infrastructure.
Objective 4: Integrate Gender Equality and Social Inclusion (GSI) to promote inclusive digital ecosystems in the country
Emphasis on gender equality, women’s economic empowerment, digital social inclusion, sustainability
This can be achieved by encouraging women’s participation in the ICT sector.
BEACON prioritizes increased engagement for persons with disabilities. It considers climate threats and ensure environmental sustainability.
Open Forum on the BEACON
US-ABC noted the interrelated interaction about cyber-related issues at the ASEAN regional level which produces a synergy of opportunity.
Member: Expressed interest to collaborate on spectrum areas introduced by USAID.
Member: Inquired about payment-related activities of the BEACON.
USAID: answered that there are initiatives related to the establishment of e-payment activities which will be carried over to the SPEED project. They also added that there are also initiatives centered on cyber security, technical training, and capacity for future partners in finance and central bank.
Member: Suggested that there is also a need to have a separate discussion on Wi-Fi as there is little engagement regarding it. They expressed interest to work together with USAID in certain areas as USABC member is planning to develop a maturity model with ASEAN member states next year.
USAID: Acknowledged the effort of the Philippines for subscribing to regional standards and agreements regarding the advancement in cyber-related areas. They mentioned that they are open to regional conversations.
USAID to US-ABC on Constraints on the Policy side: USAID requested US-ABC to share observed constraints. This can be brought up in conversations with government partners. USAID also expressed their desire to work with US-ABC to support the areas of concern of the private sector.
USAID to US-ABC on the Capability and Maturity Model Assessments on Cybersecurity: They announced that there will be a review and updating process of the National Cyber Security plan.
Member: Inquired about USAID’s plans on web service accessibility for persons with disabilities. They expressed their interest to collaborate with USAID regarding this.
USAID: Expressed that it will be something that they intend to work on closely, together with work on rural connectivity. They cited the drafting of the IRR for the digital workforce competitiveness act, and the assistance USAID offers in hitting the target gender and development budget spending, as examples of their initiative on gender and social inclusion
Introduction to USAID Strengthening Private Enterprise for the Digital Economy (SPEED)
SPEED Project is an $80M, five-year private sector phasing project focusing on e-commerce. It seeks to expand the participation of the Philippines small and medium enterprises (SMEs) in the digital economy. It focuses on Business-to-Business (B2B) and Business-to-Consumers (B2C) E-commerce transactions.
It aims to work closely with government agencies involved in e-Commerce, finance and regulatory agencies, and private sectors that have resources and technical expertise to harness the potential of the digital economy and to boost enterprise net growth.
Partners include SMEs, the government, financial service providers, business or industry associations, logistics service providers, big techs, e-commerce platforms, and tech startup incubators.
SPEED’s primary goal is to make the digital economy inclusive by increasing the participation of SMEs in the digital economy.
USAID SPEED’s Four Objectives:
Improving SME capacity and access to platforms.
This would be achieved through capacity-building, matching them with technology providers for mentoring, and onboarding them to e-commerce platforms. Prior to that, an assessment of digital maturity and design interventions shall be pursued. E-commerce systems in different localities are to be built, with focus on B2C and B2B.
E-commerce alliance could be set-up to advocate policy reforms, proactive self-regulation, and adoption of industries’ best practices.
Expanding and increasing usage of e-payment systems and other fintech innovations.
Regarding e-payments, SPEED is leveraging on its previous e-peso program, through introducing a debit pool payment system.
The Philippine digital economy is dominated by individual online sellers that were mostly out-of-job during the pandemic. Merchants’ discount rates can go as high as 4%, which can discourage small merchants. USAID SPEED provides guidance on the Central Bank to make digital pricing more affordable to merchants.
Improving SME integration across the logistics supply chain.
They aim to streamline Know Your Customer (KYC) for merchants’ easier on-boarding.
They aim to expand access to digital financial services like credit, aim to tap third-party logistics networks for offline fulfillments of the suppliers and consumers, and aim to bring down inefficient logistic costs.
Strengthening consumer awareness and protection.
The currently pending Internet Transactions Act, which defines liability of merchants and platforms through registration of merchants, redress mechanisms for consumers, establishment of an e-commerce office, etc., is pushed.
They would also look at regulations that need updating, such as the country’s E-commerce Act.
They would also pay attention to the implementation of our data privacy regulations, and would roll-out campaigns for consumer awareness
Open Forum on the USAID SPEED
USAID SPEED will get in touch with a USABC member for potential partnerships relating to digital payments.
USABC is interested in partnering with SPEED for projects related to consumer awareness.
Overview and Updates on the Indo-Pacific Economic Framework (IPEF)
Seven (7) ASEAN states are participating in all four (4) modules.
The Council created opportunities for members who would like to get involved with the IPEF process, get engaged with US government officials, ASEAN governments, non-ASEAN and non-USG participants.
The Government of Australia was reported to be keen on receiving ideas from the US industry, and potential texts helpful to develop consensus positions around commitments, disciplines, rules, and standards across the four (4) pillars.
Those with ideas or proposed texts for the Government of Australia can come forward. They are happy to present those arguments in the coming negotiations.
Those with ideas and proposals on reforms related to the IPEF’s pillars of supply chain and decarbonization are also free to submit them. This is because pre-existing agreements related to these are potentially starting from scratch.
Rapid negotiations on the trade pillar are expected
US-ABC Report on DC Office Efforts for 2022
Last April, a PH-US Trade Investment Forum with the Department of Trade and Industry (DTI) commenced.
Last December, a dinner and reception for President Marcos was organized.
Last June, a roundtable with Ambassador Carlson was organized
US-ABC Report on Philippine Office Efforts for 2022
Last October, a 2022 Philippine Business Mission was held.
25 government meetings
28 member companies
Still looking forward to receiving replies from government officials on issues and topics raised during the Mission
Philippine policy recommendation papers were sent to government agencies of the Marcos administration.
They were initially sent to presidential candidates.
The PH Office is committed to sending updated ones regularly.
About 27 member companies provided inputs for them.
Last August, a digital transformation workshop with IBM was organized.
Around 15 government agencies joined, particularly their technical officers who discussed challenges and opportunities for digital transformation and government.
A short forum entitled “Vote 2022: A Business Perspective on the Philippine Elections” with Vriens and partners was held.
A memorandum of understanding with the Department of Trade and Industry was obtained.
It focuses on innovation, artificial intelligence, SME development, e-commerce, and creative industries.
Throughout the year, meetings with various government agencies and industry stakeholders were organized.
Readouts were provided, with continuing commitment for 2023.
Requests for inputs on letters and position papers on major policy issues in the Philippines were rolled out.
Plans for 2023
Based on insights of member companies, the following issues and advocacies are what the Council should focus on in 2023:
Digital transformation in the government
Healthcare reform and advocacy
Progress and development in the Indo-Pacific Economic Framework
Food security
USABC is open for insights as to what programs and projects, and which government agencies the members are interested in engaging with.
Some of these programs include, but are not limited to, roundtable discussions, forums, workshops, and policy papers.
There already exists a memorandum of agreement with the DTI and DOT. USABC is now awaiting a memorandum of agreement with the DENR.
There also exists a current memorandum of agreement with the Department of Agriculture (DA), that’s patterned with Vietnam’s.
Open Forum on the Offices’ Efforts and Future Outlook
The IRR for the Public Service Act is perceived to generate commercial and investment opportunities.
USABC member expressed interest to draw focus on sustainability.
By learning from the practices of other ASEAN members and the US experience.
The sustainability team of the US-ABC is developing a tracking tool across 10 countries, as reference to their dispositions and best practices.
The 2023 Business Mission is expected to happen in the latter part of August
Closing Remarks
The Board of Directors agreed with the Council having a strategic focus on the areas of digital transformation and Indo-Pacific Economic Framework.
These two (2) areas of concern of the Philippines coincided with the Council’s overall priorities in 2023
