Knowledge power: a new hope for the Philippines

by Leah Victoria T. Carada¹

DURING THE FIRST quarter of the year, the Bangko Sentral ng Pilipinas reported better economic conditions of the country compared to the first quarter of 2001—GDP growth at 3.8%; lower inflation rate at 3.6%; stronger peso at P51.25 to the US dollar; lower unemployment rate at 10.3%; larger foreign direct investments at US$1.2 billion; and substantial current income account surplus at US$1.3 billion due to higher OFW remittances at US$2.0 billion. Areas for improvement are—the government’s budget deficit which expanded to P61.2 billion; exports which dropped by 5.3%; and slower growth of the manufacturing sector at 2%, among others.

While political woes and security issues may have given a negative image for the country, highlighting these economic achievements offers a different perspective on the current situation of the Philippines. There is, moreover, another reason that puts the country in a favorable position: the Philippines may be well on its way into becoming Asia’s knowledge center by 2010.

In 1997, the National Information Technology Council during President Ramos’ administration envisioned that: “Within the first decade of the 21st century, the Philippines will be a knowledge center in the Asia-Pacific: the leader in information technology (IT) education, in IT-assisted training, and in the application of information and knowledge to business, professional services, and the arts.” The importance of IT—defined as the convergence of various technologies involved in processing and transmitting information—as one of the major keys in achieving economic prosperity for the country is also recognized by President Gloria Macapagal-Arroyo. President Macapagal-Arroyo wants to make the Philippines competitive and prominent in the electronic era.

Today, the country is steadily carving its niche in IT education and training as well as IT services. According to the Asian Computer Directory 2001, the Philippines is the second highest among Asian countries in terms of the number of training facilities for computer programming and other computer-related courses. The Philippines also emerges as one of the favorite choices by foreign investors and customers for outsourcing services and call-center businesses. Software developer Enterworks chose Manila to be its Asian hub for developing e-marketing software; and among others, the Philippines is the e-mail-based help center for America Online and PeopleSupport, the electronic-publishing operation facility for bookstore chain Barnes & Noble, and the finance-and-accounting support team for multinational oil company Caltex.²

In a global ranking of 49 economies, the 2002 Global Technology Index positions the Philippines as the country with the third highest number of qualified engineers, IT skills, senior management, and higher education enrollment (see Box 1). The traits that have made our Filipino professionals prominent abroad are the same qualities that have given the country the edge in IT: English competency, level of education, adaptability to Western business practices, level of trainability, and good capabilities in dealing with foreign partners. Given these plus factors, the Philippines is gaining a growing track record in accomplishing successful IT projects.

Through the country’s skilled workers, the Philippines has found its “knowledge power” to make the country recognized in the global IT industry as one of the emerging global leaders. While it is currently ranked 30 in the over-all results of the 2002 Global Technology Index, the country could improve its technological capabilities and potential if it develops other areas needed to move up in the IT ladder (see Box 2). There is still a need, moreover, to improve the “basics” of economic development and competitiveness—infrastructure, education system, transport system, peace and order situation, government efficiency, and political stability, among others. By achieving all of these, the country may achieve its IT vision well ahead of its deadline. *

¹Ms. Carada is currently a Foreign Affairs Research Specialist, specializing on International Trade and Economics, at the Center for International Relations and Strategic Studies, Foreign Service Institute. The views expressed herein are those of the author and do not necessarily reflect the position of the Institute. She is taking up her Master’s in Public Management at the Ateneo School of Government, Ateneo de Manila University.

²Deidre Sheehan, “Call of the Wired,” Far Eastern Economic Review, 28 June 2001

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