Developing Start-ups needs developing the infrastructure too


If the Philippines needs to become a leader in promoting start-ups, the country has to improve its infrastructure starting with the internet speed.


PH Internet infrastructure scores poorly in assessment

Wednesday, June 4, 2014

THE Philippines needs huge improvements on its Internet connectivity, legal, delivery, and payment infrastructure, after having received low ratings in a startup assessment report released to the public on Tuesday.

The country scored a “developing” rating in its delivery and online payment infrastructure, below average in its Internet infrastructure and average for its legal infrastructure. The figures were presented by World Startup Report team lead Beryl Li at the ICT-BPM Conference held at the Marco Polo Plaza Cebu.

The developing rating, Li explained, means that a big portion of the country’s users have no access to the delivery and online payment infrastructure. But in places where it is available, it is often “prohibitively expensive and very unreliable.”

In countries like the US and Singapore, she said the payment infrastructure or the use of credit cards is widely practiced while security is ensured. Both countries received a “world-class rating” to all infrastructure components identified in the report.

One of the examples she cited is the US-based ecommerce site Amazon, which provides buyers a fast delivery of purchased products online.

The legal infrastructure in the Philippines was also examined. Li particularly noted that the 60-40 percent rule in business ownership in the country limits the entry of foreign investors.

“It (60-40 ownership) dissuades potential Filipino entrepreneurs from incorporating their companies in the Philippines. (Instead) they go to Singapore, US, or Hong Kong… (There is also) inefficiency in merging” Li noted in her report.

The Internet infrastructure in the Philippines, which got a below average rating by the World Startup Report, has been widely criticized because of its poor performance but expensive rates.

The Philippines, compared with countries in the Southeast Asian region, registered the slowest Internet speed of two megabits per second (mbps) on average. It ranked 158th out of the 190 countries surveyed worldwide. South Korea ranked first with an average Internet speed of 21.9 mbps followed by Japan with 12.8 mbps.

“If these areas will be resolved, we can attract more (investors and entrepreneurs) in the Philippines,” Li said during the conference’s panel discussion.

Aside from the identified infrastructure, funding for startups was also raised during the discussion.

Khailee Ng urged businessmen in Cebu to form a pool of “Cebu Angels” in the same way Manila has formed a private network of investors called ManilaAngels.

IdeaSpace president Earl Martin Valencia also told businessmen to consider investing in startups. “Businesses have a large role in the startup ecosystem because they can either be the investors, consumers, or partners,” he said.

Currently, the Philippines has roughly 10 angel investor groups, according to Department of Science and Technology’s Information and Communications Technology Office program manager Emmy Delfin.

To foster the startup environment in the country, Delfin disclosed that DOST ICTO, tech leaders and incubators are coming up with a national roadmap for startups, which is expected to be completed in five months’ time.

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