theTEAM

JanetteTORAL

The main author and editor of this book. She

is the founder of the Philippine Internet
Commerce Society and DigitalFilipino.com.
Through the Internet, she was able to gather
support in pushing for the passage of the E-
Commerce Law and Y2K Law.

CarlosMiguelAlvarezPARAZ
Simply known as “Migs” to friends, he is one
of the historians of the Philippine Internet. He
has been involved in the technical directions of
the local Internet scene since its commercial
beginnings in 1995. He is well-educated in
contemporary Internet and software technology
matters and can provide analyses of the subject.
He has spoken about the Philippine Internet in
foreign conferences from the perspective of a
user and on its technical/operational aspect.

DannyESCASA
Daniel O. Escasa has over 20 years experience
in IT (he claims to be a child prodigy) in various
capacities—teacher, developer, and writer. He
still considers himself a student of IT, noting
that “you can never stop learning, else your
knowledge not only stagnates, but actually
deteriorates.”

AntonioBUCU
Tony was on his 5th year of Electrical Engineering
in college when he discovered his heart was in
graphic design and the arts. A Mac evangelist
in the early days of the Mac/DOS warz, he
continues to use the Mac in his everyday e-life.
Tony currently teaches Adobe Illustrator at the
Philippine Center for Creative Imaging, and
is the first to develop and market his custom fonts
online, a few of which were used in this book.

5
 what’sINSIDE

5 Foreword

Introduction: The Bigger Picture 7

14 Internet Timeline: 1994 - 2004

The Filipino Internet User Evolving 33

47 Infrastructure: Bandwidth Map of the Philippines

Hi-Tech Crimes 73

81 People Power

Blazing Glory 91

101 Advocacy and Politics Online: A New Media

eGovernment: The Marikina Story 117

123 A Father’s Message

6
 foreWORD

I n the summer of March 2002, I met up with

Ronald Jabal and Vonj Tingson of Capex Asia
to discuss this ambitious project, the documentation
of 10 years of the Internet in the country. After
several meetings, we agreed that the time has
come for this ambitious project.

I spend almost half of my life nowadays online.

I use the Internet as the sounding board of my
advocacy, thoughts, dreams and success. I
experienced failure through it as well. Without the
Internet, I won’t be anywhere near where I am
philippineinternetreview today.

After a decade, I’ve witnessed various challenges

brought by technology, especially to the young
and the uninitiated. It has become complicated,
Capex Asia
uncontrollable, and political compared to how it
Publisher was a few years ago.

Janette C. Toral This special publication intends to give the reader

Editor a view of how Internet in the Philippines has
evolved in the past 10 years. It does not intend
Carlos Miguel Alvarez Paraz to be nostalgic, but to make the reader realize the
Daniel O. Escasa hard work and hurdles the industry went through
Mayumi Canuto to make the Internet accessible and affordable to
Fe Nuñez many of us today. It also gives a perspective of
Johnson M. Chua things to come in the next 10 years that we should
watch out for.
Julius Gorospe
Juan Magdaraog
Internet in our country will only grow and progress
Contributors further if we will all be responsible, respectful,
and vigilant in ensuring the proper use of this
Okby Enriquez infrastructure.
Twinkle Catalan
Advertising Managers As we intend to update this publication every year,
we hope that people will approach us and share
August San Esteban how the Internet changed in their respective areas,
Cover Design to give a true country-wide picture of Internet’s
evolution.
Antonio Bucu
We want this special project to inspire the next
Book Design, Layout
generation, to come up with great applications
and Illustrations
and tools that will empower more Filipinos in this
globally competitive world.
The Philippine Internet Review:
10 years of the Internet in the Philippines
is published by CapexAsia, Inc.: Unit 1220
Herrera Towers V.A. Rufino St. corner Valero St.
Salcedo Village, Makati City.
email: capex@asia.com • Tel. 813-4032
For subscription inquiries please email
janette@digitalfilipino.com.

No part of this special publication may be used

or reproduced in ay manner whatsoever without
written permission of CapexAsia, Inc.

Opinions expressed in this special publication are

solely those of the writers and not of the Publisher. Janette Toral

7
the
M y fascination with computers started as
early as 1984 while I was in grade school.
I remember the time when I went to the office
of my Auntie and had my first encounter with
the computer. It was running a spreadsheet
program called Visicalc. I played around with
it for a few minutes, just typing in numbers.
From that moment on, I knew that I want
to work in the field of computers. In 1986, I
studied Basic Computer System with Cobol,
Wordstar, Dbase II, and Visicalc.
In 1988, there was a big marketing pitch that
one doesn’t need a college degree to get a high
paying job. I believed in it and took a computer
literacy course and trainor’s training in two
computer schools.
I had my first computer tutorial job in 1989 and
pursued various IT careers. In 1995, I logged
at Daniel Chua’s Nightstalker Bulletin Board
picture
by Janette Toral
System which convinced me to subscribe to
Extra Mile Online. That’s where I moderated my
first forum - Infotech. I wrote to several ISPs
offering forum moderating work in exchange
for Internet access. Portal Inc and The E-Mail
Company accepted my offer.
What is great about the Internet is that you
can be who you want to be. In the past 9
years since I first went online, I had become a
writer, community leader, lobbyist, activist, IT
evangelist, event organizer, entrepreneur, and
online educator—living all of these identities
online and offline.
IT and the Internet provides you with a feeling
of empowerment. It can bring you greatness
and numerous achievements if used properly.
But it can destroy you as well if abused. Then
it also gives you room to bounce back and start
all over again.
9
 philippineinternetreview

We’re connected
the The past 10 years allowed more and more Filipinos
the luxury of having a personal computer at home.
From fifty thousand pesos (P50,000) a few years
back, one can now have a personal computer for

in the New Economy less than twenty thousand pesos (P20,000) and it’s
Internet ready.

With 5.5 million Internet users at the end of 2003,

The Filipino’s ability to use ICT
efficiently and develop new
export markets was greatly
powered by the Internet.
50
Filipino Internet Users (millions)
I expect this to reach 41 million by 2014 based on
trends where the number of Internet users nearly
doubles every two years.
A study on ICT and Internet Usage in the Product
Export Sector that we did in 2003, 98% of
organizations—majority of which are SMEs, have at
least one desktop in their offices. Despite the fact
that more and more SMEs are using the computer
and the Internet, hardly any had more than a word
processor, spreadsheet, and presentation programs.
These basic productivity tools are used to generate

all the reports that an organization need and aid

40
them in decision making. Although there’s nothing
wrong about this, foreign competitors of our SMEs
30 have access to more sophisticated tools, leaving
our SME sector at great disadvantage.
20
The growth of Internet usage among organizations
and individuals must be complemented with
10 software meant to fit our socio-economic situation.
In order to counter piracy, development of desktop
and productivity applications that can be bought by
0
1994 1997 2000 2003 2006 2009 2014 consumers and SMEs at an affordable price must
be pushed.
Filipino Internet user growth estimates
by Janette Toral, DigitalFilipino.com Content is king

These 10 years has resulted in the emergence of

great content online. From media organizations
20 having their news content online, country
information and statistics can now accessed by
Filipino Internet Users (billions)

anyone.
15
The main question, however, is “how sure are we
that the content we see now can still be accessed
10 in 2014?” At this time, you hardly see content
from 1994 to 1999 online especially among news
web sites. In the course of our research for this
50 book, only ITMatters (http://www.itmatters.
com.ph) has managed to keep a great deal of its
content online. This site also has a sophisticated
0 search engine that allows a person looking for
1994 1997 2000 2003 2006 2009 2014 specific content to retrieve information in a fast
and efficient manner.
E-commerce growth estimates
by Janette Toral, DigitalFilipino.com Among government sites, the National Statistics
Office (http://www.census.gov.ph) stands out in
disseminating useful country information.

10 thebiggerpicture

Ken Ilio’s Tanikalang Ginto (http://www.
filipinolinks.com) is the biggest directory online.
His site is one of the few that remains consistent
with its original purpose of recording the
existence and evolution of Filipino websites.
Even as “global citizens”, Filipinos love to belong
in communities. These types of web sites were
the first to “click” as the Internet emerged. Web
sites like PinoyExchange.com (http://www.
pinoyexchange.com) live up to its purpose as a
global contact point among Filipinos.
Filipino community sites can be classified
according to region, interest, and race, among
others. An example is Tsinoy.com (http://
www.tsinoy.com) where Filipinos with Chinese
background interact.
As IT and Internet became hot topics,
communities like PH-Cyberview (http://
groups.yahoo.com/group/ph-cyberview),
CyberPromdi (http://groups.yahoo.com/group/
cyberpromdi), and DigitalFilipino (http://
groups.yahoo.com/group/digitalfilipino)
became focal discussion points as well.
E-commerce is bustling
After 10 years of the Internet in the Philippines,
local payment gateways still fail to serve the
needs of SMEs that are interested in online
trading. The low sales target of entrepreneurs
and start-up companies do not appeal to
local banks. Insurance requirements and
bank account with high maintaining balance
imposed by payment gateways discouraged
entrepreneurs with small capital.
Many attempted to sell products online but
had to shut down their sites at the start of
the millennium due to lack of a payment
facility. However, there are few who persisted
and availed of foreign payment gateway
services. Terms like high charges, twice a
philippineinternetreview
month check issuance, 30 days mailing, and
45 days check clearing were unattractive at
first. But entrepeneurs believed it was better
than nothing. Today, there are sites like
Ikobo.com that allowed money withdrawal
through automated teller machines (ATMs)—
in less than 24 hours—after online sales are
completed.
Despite these challeges, e-commerce sales
volume is increasing. As we entered the 21st
century, local e-commerce transaction reached
PhP 1 billion. It also shows that there’s at least
one billion transaction sales growth annually.
If this trend continues, figures can reach up
to PhP 20 billion as more businesses conduct
online transactions.
If significant economic growth takes place in
the next 10 years, these estimates may even
double or triple.
E-commerce merchants in the country who
managed to survive and thrive online owe their
continuous existence to Filipino migrants. Websites
like Turoturo (http://www.turoturo.com), YesPinoy
(http://www.yespinoy.com), Divisoria (http://
www.divisoria.com), PinoyDelikasi (http://www.
pinoydelikasi.com), MyAyala (http://www.
myayala.com), and PadalaKo (http://www.
padalako.com), among others, sell products
and services to Filipinos abroad and to those
who would like to send gifts to their loved ones
in the country.
Overseas Filipino workers (OFWs) are
the primary customers of local websites.
However, based on a small survey, the OFW
Internet Habits Report, that we did in 2003,
we discovered that only 25% of OFWs have
access to the Internet and even less, only
16%, buy online.
The passage of the E-Commerce Law—
Republic Act 8792 contributed to the adoption
of e-commerce among major corporations
in the country. The biggest showcase is
BayanTrade.com (http://www.bayantrade.
com) where the top six conglomerates in the
country, with 250 buyers, converge to trade
with various suppliers online.
Another highlight worth flaunting is SM
Supermarket. Its company, Super Value
Inc. (SVI), started harnessing the power of
e-commerce as early as 1994. With 1,500
suppliers and growing, SVI has made a bold
move of trading only with suppliers capable of
conducting e-commerce.
thebiggerpicture 11
 philippineinternetreview
The Tech-Savvy Filipino
There’s no doubt that Filipinos have never been
as tech-savvy as they are today. These days,
almost all courses in college have a computer
literacy component. This is also being pushed
in elementary and high school.
Efforts to push the use of computers and the
Internet are ongoing in the public high schools.
The government’s PC for High School Project plays
a major role in this initiative. However, it will take
some time and additional resources before the
nearly 50,000 elementary schools nationwide will
have access to computers and the Internet.
Apart from students, local government units,
cooperatives, and barangays are main targets
as well of these capacity building initiatives by
bringing technology to them. These facilities are
also referred to as community telecenters. These
include the B2BCenters of B2BPriceNow.com
(http://www.b2bpricenow.com) and Barangay.
net.ph (http://www.barangay.net.ph).
The challenge is to make sure that these telecenters
will be sustainable and able to meet its purpose
of empowering the community. Often, the people
heading and running these telecenters lack e-
commerce skills, experience, knowledge, and
confidence to assist SMEs in their area to trade
online. The same goes for educators teaching
Internet and e-commerce to students. Training the
trainors and community telecenter leaders will be
very important and must be done continuously.
If there’s any cluster of individuals that are important
to be tech-savvy but are partly lagging behind are
our politicians and judges. But with the Internet-
literate younger generation of judges taking these
important positions in the next 10 years, I believe
that this will all change for the better. Note that by
2010, internet access will be available to majoriy
of voters, whose numbers can make or break an
aspiring president. Future politicians must take
12 thebiggerpicture
note that they need to be tech-savvy not only
by understanding ICT and Internet but by being
productive users of these as well.
The Pro-Active Filipino
SMEs are aware of the importance of e-mail
and having a website in the context of today’s
business setting, although it may not be an urgent
requirement due to budgeting priorities. Those
we interviewed in our surveys are currently not
using e-mail and Internet have but plans to do so
within the year.
Most policy makers today recognize the significance
of ICT in terms of achieving productivity and its
contribution to job creation and economic growth.
Most politicians, even if they are not Internet
users, have an e-mail address where they can
be reached. Some even have their own websites
and use these during the campaign period.
Senator Ramon Magsaysay Jr. and Former
Congressman Leandro Verceles Jr. were
the primary champions of e-commerce in the
country. Not only did they push for the passage
of the E-Commerce Law or Republic Act 8792,
they personally use the Internet, e-mail their
friends, and buy products online.
Schools like the University of the Philippines
(http://upou.org) and the Polytechnic
University of the Philippines (http://www.pup.
edu.ph) launched their respective e-learning
initiatives with the intent of allowing Filipinos
wherever they are to earn degrees, diplomas,
and certificates from the school.
The Filipino as Online Activists
The Internet has allowed new communities and
groups to be formed as like-minded individuals
meet online. This is especially true in the case of
the Philippine Internet Commerce Society (PICS).
I started floating the idea of creating the
Philippine Internet Commerce Society
(http://www.pics.org.ph) in August 1997
during a discussion in the PH-ISP list—a virtual
community started by Miguel Paraz composed
primarily of Internet Service Providers (ISPs).
There were a lot of interested parties that lead
to the creation of the PICS discussion list.
When it became a registered non-government
organization, the PICS community gathered
about 700 members where everyone received
about the organization’s activities, debates

on Internet issues, and lobby support for the
passage of the E-Commerce Law.
As PICS pushed for the passage of the Y2K Law, every
potential ally that we met on the field became part
of the community. The multi-sectoral composition
allowed for people from various interest groups to
come together and unite in pushing for the passage
of the E-Commerce Law as well.
Prior to the Internet, one can only become part of a
policy making body by getting introduced or endorsed
by a member of that group. In the year 2000, the
Information Technology Electronic Commerce Council
(ITECC) headed by former Department of Trade
and Industry Secretary Mar Roxas gave room to a
democratic body. Anyone who has interest in helping
or learning, were welcome to attend, observe, or
participate. In the legal cluster that I headed then,
minutes of the meeting were posted online (http://
groups.yahoo.com/group/ecomm-irr) for viewing
and comments by those who don’t have time to
attend the face-to-face meetings.
No matter how much it has changed today,
ITECC, now known as the Commission on
Information and Communications Technology
(CICT), remains a multi-sectoral policy making
body composed of government, private sector,
NGOs, and academe, among others. It works
to make favorable policies and programs that
will support the growth of ICT.
Scarce resources
If there’s one painful reality, it’s the lack of
resources. There are still many towns and
municipalities, especially in rural areas,
that have no phones,much less an Internet
connection.
Although foreign aid has been used by some in
bringing ICT to the rural areas, there were also
research expenditures that have not translated
to any concrete projects. In the next 10 years,
philippineinternetreview
ICT progress can be triggered by concrete
results-oriented programs. The private sector will
play a major role in spurring these developments.
We need more social entrepreneurs like Edgardo
“Tedjie” Herbosa of B2BPriceNow.com (http://
www.b2bpricenow.com). By partnering with
strategic organizations like the Landbank of
the Philippines, Polytechnic University of the
Philippines, Department of Agriculture, World
Bank, Tedjie was able to educate numerous
cooperatives in using the Internet and how
they can trade using B2BPriceNow.com.
The Internet and computer literacy among
personnel agricultural cooperatives today can
be attributed to this initiative. The next 10
years will be important in benchmarking the
economic output of these projects.
There’s also lack of funding in the dotcom sector
and this has resulted to Filipino websites operating
from small offices or from homes to survive. Their
offerings are fairly simple and unhyped.
As with the dramatic entry of HatchAsia.com and
IdeaFarm.com, among others to entice project
ideas for funding, some were shocked with the
decisions these companies have made. Failed
investment projects placed a doom spell and poor
faith in the quality of decision making. Today,
many Internet entrepreneurs are still reluctant in
trusting venture capitalists in their capability on
what will “click”. There are also venture capitalists
hesitant in investing and still think that they know
more than most dotcom start-ups do.
The next 10 years
Aspiring Internet entrepreneurs in the next 10
years must be willing to start small and adapt
to the changing market. With the possibility of
serving 41 million Filipino Internet users in by
2014, patience, perseverance, humility, and
hard work can bring great rewards.
thebiggerpicture 13
When the Americans left in 1991, many thought
that Subic has seen the writings on the wall. Doomsday
scenarios have been written all over its once pristine image.
Soothsayers predicted, the once bustling community
would turn out to be a huge wasteland devoid of any
As a consequence of the steady rise in investments, REVENUE CONTRIBUTION
thousands of jobs were also created thereby providing Customs Collections
livelihood to thousands of families to nearby cities, towns
(5% Tax on Gross Income + Withholding Tax
and provinces. As of May 2004, the Freeport employs
close to 56,000 skilled workers. Jobs range from office
personnel, to technical specialists, production workers 1998 2.871

future with out the US military presence. and highly specialized managers. 1999 2.299
But, as in most cases, the soothsayers were proven 2000 2.175
wrong. The resiliency, courage, patience and the genius of
EMPLOYMENT 2001 3.658
the Filipinos worked wonders in transforming Subic from
Standing Workforce (Excluding SBMA/FSC Employees)
an ammunition depot to a world class free port - admired Corroborated by DOLE – REGION 3
2002 3.986

not only locally but in the international community as 2003 (16% increase over 1998) 3.323

well. 1998 7756 Jan-May 2004 2.195

Last year alone, the Subic Freeport, being managed
1999 16348
by the Subic Bay Metropolitan Authority (SBMA), 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
registered 293 more new projects amounting to over 2000 30139 Customs Revenues (Billions PhP)

P3.025 billion worth of fresh investments- a clear indicator 2001 45742

that no doubt the Subic Freeport plays a huge role in the 2002 48874
local and national development. 1994 to 1998 3.712 B (17%)
2003 (563% increase over 1998) 51486
“The entry of new companies clearly shows a vote 1999 to May 2004 17.636 B (83%)
Jan-May 2004 55745
of confidence of investors who have seen the prospects of
Subic Freeport to become one of the emerging economic Total: 21.348 B (100%)
0 10000 20000 30000 40000 50000 60000
hubs in the Asia Pacific region,” SBMA Chairman and Employees
The improved business climate and the additional
Administrator Felicito C. Payumo said.
theme park attractions and recreational facilities
And the huge volume of investments in the
brought about by the new Subic investments have also
Freeport is not just a fluke of nature but a constant and
a rising indicator, owing to the effective management
PAYROLL tremendously boosted tourism in the Freeport. In fact,
Subic is considered by the Department of Tourism as one
of the SBMA administrator. By end 2003, SBMA has 1998 1.58
of its prized eco-tourism enclaves. Since 1998, local and
already recorded a whopping US$4.102 billion worth 1999 1.89
foreign tourists have flocked to Subic to enjoy the serene
of investments, a marked 58% increase compared with
2000 1.90 and lush environment and the beautiful beaches in the
investment figures in 1998 when Chairman Payumo
area. From 1994 to May this year, Subic has attracted more
assumed office. This will be surpassed this year as latest 2001 2.96
than 48 million tourists.
data shows, the Freeport has already registered US$4.112 2002 2.61

billion worth of investments as of May 2004. 2003 (103% increase over 1998) 3.21
The number of companies has also been steadily TOURISM
Jan-May 2004 1.46
rising due to the improved economic conditions and
business climate in Subic. From a measly 304 locators in 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
1998 2.353

1998, the figures now ballooned by a stunning 203% to Payroll in PhP Biilions 1999 3.468
922. This year, the Freeport continues to attract companies 2000 6.740
who want to set up businesses - a clear indication of
2001 6.935
businessmen’s seal of approval for the SBMA leadership. Tax collection has also been on the rise much to the
2002 7.972
As of May 2004, 976 locators have set up shop in Subic. delight of the National Government, which acknowledges
Subic as one the major pillars of national development. 2003 (235% increase over 1998) 7.886
INVESTMENTS Latest data shows that Subic has contributed close to Jan-May 2004 2.910

P26 billion to the national coffers from 1994 to May 2004,

1998 2.591 B
which is 30 times the P850 million equity of the National 0 1 2 3 4 5 6 7 8
2.831 B Visitor Arrivals (Millions )
1999 Government to the SMBA.
2000 3.082 B

2001 3.922 B
REVENUE CONTRIBUTION But it was not all bed of roses when Chairman Payumo
2002 4.047 B
BIR Collections took his oath as the second SBMA administrator. During
2003 (58% increase over 1998) 4.102 B
(5% Tax on Gross Income + Withholding Tax his assumption to office, he had to face the onslaught
Jan-May 2004 4. 112 B of the Asian financial crisis that has swept all emerging
markets in the Asia Pacific leaving behind unimaginable
0 1 2 3 4 5 1998 463.1 disaster. He also had to assume his office marked by a
INVESTMENTS IN BILLION US$
1999 505.9 bitter squabble with the first SBMA administrator, leaving
2000 554.5
behind a divided SBMA.
But all these did not deter Chairman Payumo who,
Companies: 2001 747.7
even as a congressman representing Bataan during the
Cumulative-committed investments 2002 635.4
8th, 9th and then 10th Congresses, has already formed his
2003 (30% increase over 1998) 601.4 vision for the development of Central and Northern Luzon
304
1998
Jan-May 2004 270.9 with the Subic Freeport as its central catalyst.
1999 342 Hence, he immediately instituted wide-ranging
2000 449 0 100 200 300 400 500 600 700 800 policies aimed at putting into place structures that will
2001 552
BIR Revenues (Millions PhP)
further promote Subic as a world-class facility. Chairman
Payumo has also pioneered an integrated four-pronged
2002 629
approach for the freeport’s sustained development
2003 (203% increase over 1998) 922 1994 to 1998 1.304 B (28%) that is in tune with the challenges of the 21st century:
Jan-May 2004 976 1999 to May 2004 3.316 B (72%) Expanding Horizons, Port Development, Development of

Nature Theme parks and CyberSubic
0 200 400 600 800 1000
Total: 4.620 B (100%) With these policies in place, SBMA is fast realizing
Companies
its dream as globally competitive economic, financial, and
tourism hub.
 Dreaming of CyberSubic
SBMA Chairman Felicito Payumo has a dream.
His dream is for the Freeport to become accessible
online anytime, anywhere, 24/7. And his dream is
finally at hand and well on its way to realization. First
stop: automating all systems within the SBMA. And
SBMA is very successful in this regard.
To date, some 14 application systems are already
fully functional each serving its respective clientele.
Among these include:
• Ecology Center Information System: it is an
Oracle-based client-serve database application
designed to assist to manager, analyze, monitor and
display environmental conditions of the Freeport.
The system is capable of presenting computerized
comprehensive land-based information consisting
of environmental and natural resources of the
Freeport.
• Asset Information System: it is a GIS
(geographic information system)-based application
system designed to enhance the monitoring and
management of the SBMA assets and facilities
(buildings and structures).
• Subic Bay Freeport – GIS: it is a GIS-based
application system designed to provide and
display information such as the socio, economic,
and physical profile of the Freeport.
• Identification Badge System: it is a flexible
platform for designing and producing identification
badges. It features magnetic stripe encoding,
bar coding, and color coding to distinguishing
attributes of different types of badges.
• Investment Handling System: A computer-
based application designed to automate the
investor handling process which facilitates SBMA
assistance to investors from the time the latter
inquires about Subic Bay up to the time they
establish themselves as Subic Freeport enterprises.
• Housing Reservation System: a reservation
system for the tourists/guests who would like to
rent housing units at the Binictican.
• Tourism Reservation System: a reservation
system for tourists that visit SBMA who will rent
and reserve for a certain SBMA tourism facilities/
spots.
• Locator Registration System: a database for
tracking the history files of the licenses of a locator.
SBMA Chairman Payumo says these systems form
the hard core of his dream of CyberSubic. These
are the infrastructure that will further make Subic
more attractive to multi-billion dollar investments.
“We have to put in place systems that will make us
more competitive than our competitors. Admittedly,
the competition is tough, but we at SBMA strives to
offer our clients world-class facilities that are truly
unrivaled”, the SBMA administrator said.
The challenge now for SBMA is to make all these
application systems to be web-enabled. “It is not
enough that we have
these automations in
place. Since our clientele
is not just based here
in the Freeport, we are
always in the constant
search for ways to attract
those who are outside
Subic and outside the
country. Hence, we
believe, we have to be
web-enabled. This is the
fruition of our dream of
a 24/7 Subic Freeport,”
Chairman Payumo said.
Another innovative
high-tech component of
the CyberSubic program
is the Mobile Alarm
Remote System. An
added feature of the SBMA’s Emergency Response
System, the mobile alarm remote system, is a global
system for mobile communication and subscriber
identity based software, which by using cellular
phones, will allow residents, visitors, business and
commercial establishments located within “high-
end” community like the Subic Bay Freeport Zone,
a direct communications link to police, fire, medical
and rescue team. The system will also help the SBMA
to answer public inquiry, give advice and update to
the public.
“We are doing all that we could to continue
providing world-class services to our clients. After
all, we are in the business of providing world-class
public service,” SBMA Chairman Payumo stressed.
 by Miguel Paraz and Janette Toral
T
here are many attempts in trying to
document how the Internet has evolved
in the Philippines. While making this
publication, we realized that there’s hardly
any attempts to record IS evolution, especially
outside Metro Manila.
Various publications were used as a resource in
coming up with this timeline. We were fortunate
since there are useful sites like the Internet
Archive WayBack Machine (http://web.archive.
org) that allowed us to go back to old articles
and websites online.
The timeline shown here are based on the
following:
• Content – This shows how Internet content
has matured. Websites that have come and
gone through the years, especially those that
became popular.
• Communities and events – The Internet
has allowed users to join various communities,
interact, collaborate, and even debate on issues.
This part will show the various communities
that were formed and events that brought the
Internet community together.
• E-commerce – Through the Internet,
entrepreneurs and big enterprises were able
to trade services, form partnerships, and close
16
deals. Some of the early players were lucky as
prime movers, but some are not as fortunate. In
addition, the desire to make transactions over
the Internet, often referred to as e-commerce,
bonded the industry to push for the passage of
the E-Commerce Law. They are listed here.
• Culture – As Filipinos go online, various
forms of online activities are performed. From
email to SMS over the web, this timeline intends
to show the trends that caught the Filipinos’
attention.
• Partnerships and cooperation – The Internet
has brought a new dimension to public,
academe, and private sector partnerships.
International organizations like the World Trade
Organization, Asia Pacific Economic Cooperation,
United Nations, also started having an Internet
and E-commerce work program agenda. This
part intends to show the various partnerships
and cooperation that have been formed.
• Investments – The Internet has also
stimulated investments in the country. From
dotcoms to IT and Internet-enabled services
like call centers, web development centers,
and web animation studios, new opportunities
that were not as accessible in the past became
a reality. Some ventures went well while others
failed to survive. This part shows some of these
investments that have come and gone.
 philippineinternetreview

CONTENT EVOLUTION

1980’s – 1994

The earliest cyberspace content was text-based. The slow links of the time, starting at 300
bits per second, could not transfer graphics. Information systems such as Bulletin Boards and
Online Services delivered their content through low-speed links. Bulletin Board Systems were
oriented towards files containing freely-available text information. Online Services such as
Binary Information Exchange (magazine) and Compuserve offered their subscribers licensed
content and real time information such as stock prices.

Compuserve (http://www.compuserve.com) and America Online (http://www.aol.

com) eventually set up Manila access numbers for their services, but do not market
their services locally. Compuserve planned its launch for Asia-Pacific services in
1996.

1993
The E-Mail Company (http://www.emc.com.
ph) launches EMC Online, “the first Online
Content Service in the Philippines which
allows its subscribers to forge a strong and
dynamic Online Community via Online chat
forums.” This online service originated on
the Macintosh platform using the FirstClass
software, and was originally run separate
from the Internet. Along with the forum
systems that emerged later on, it promoted
a self-contained community where everyone
communicates on the same system.
1994
Binary Systems Holdings, Inc. puts up a
commercial online service, called Portal Inc.
(http://www.portalinc.com) that offered “a
commercial online service (much like that of
Delphi, Compuserve, even AOL) which, like the
humble BBS, was the precursor to the ubiquitous
Internet Service Providers we have now. [The
system] was a proprietary online system with
its own viewers (precursor to the browsers),
email, etc. It started as a commercial online
service that was available to its subscribers,
24-hours a day.” This ran along the same lines
as EMC Online. The systems back then were
“proprietary” since no unified standard for
online systems has emerged, prior to the World
Wide Web and today's standard HTML-based
interfaces. 1

Chuck Gardner puts up the first high

profile website, the soc.culture.filipino
(“SCF”) homepage. It is now located at
http://www.cyberbayan.org. This is the
home page for the SCF newsgroup. Various
Filipino-made web sites started going
online showing the potential of Filipino
content on the web, and inspired other
webmasters to build their own sites.

In a foreshadowing of the censorship

moves, the PHnet trustees agreed
on less regulation. This became a
question early on since the unrestricted
availability of content would certainly
be opposed by some sectors.

phillipineinternettimeline 17
 philippineinternetreview
1995
Cebu City ISP GSILink puts up G-Spot
(http://www.gsilink.com/gspot), the first
public Filipino search engine. It indexed
keywords from websites using the Open
Source software engine, but required users
to manually add sites to its catalog. This
showed that Filipinos wanted to look for
content located within the country, which
could not be satisfied by foreign engines
of the time. No Filipino search engine has
been able to do actual indexing of local
content, until Google started offering
country-specific searches.
1996
Public interest in the Internet leads to the
rise of Internet publications. These include
1969, Internet World, <LINK>, and The
Web. Only The Web survived and is known
today as Enterprise (http://www.enterprise.
ph). Cybernet Live (http://mnl.cyb-live.com)
developed a media portal called Powerhouse.
Net (http://www.powerhouse.net/) to house
websites for the leading print publications
of that time. This site disappeared when
Cybernet Live shut down.
In the words of Alan Robles, editor of <LINK>:
“at that time (1996), the Internet was on a
definite growth curve, everything was coming
up Internet -- the excitement was palpable.
It was my idea to get Nicholas Negroponte
as a columnist (it was expensive) -- and there
were all sorts of plans, but the management
infrastructure and culture weren't up to the
vision.”<LINK> was a glossy Internet lifestyle
magazine published by Benpres Publishing
(now ABS-CBN Publishing).
18 phillipineinternettimeline
Companies connecting to the Internet
became aware of their corporate image. Ayala
Corporation—which would later be a dotcom
player—started its website. Even while top
companies like Ayala Corporation (http://
globe.com.ph/~isd/ac_home.htm) got press
coverage when it went online, countless smaller
companies have also built an online presence.
Many of these started out as extensions of the
personal pages built by company staff members
who were the first to go online among their
peers. 2
Internet pioneer and chronicler Jim Ayson
puts up the Philippine Cyberspace Review
website, featuring his original writing and
reprints from Computerworld, which had
no website at that time. It was then under
his homepage at http://www.europa.
com/~jra/ and now archived at http://
web.archive.org/web/19961222155753/
http://www.europa.com/~jra/~jra/stac/
stacfaq.html.
This served as a rich source of
information at a time that the mainstream
news media did not publish its content on
the Internet. The site evolved into the PH-
Cyberview group at egroups, later Yahoo!
Groups, which became a rich source of
discussion and information on the local
Internet. This is now at http://groups.
yahoo.com/group/ph-cyberview with
archives spanning back to August 1998
when the group started. Many historical
events are documented there.
Internet censorship started to spark interest
among governments and legislators around
the world. The Philippine Senate called
for a hearing on pornographic material
on the Internet, and summoned Internet
pioneers to testify. DOST Secretary
William Padolina declares that he would
rather “err on the side of freedom” when
faced with the censorship issue. 3
 philippineinternetreview

1997
Content-rich media websites went up.
Newspapers such as the Manila Bulletin
Yehey (http://www.yehey.com) was founded.
(http://www.mb.com.ph), Philippine Star
It is still the country’s most prominent search
(http://www.philstar.com), Manila Times
engine or directory. At the time it competed
(http://www.manilatimes.net) and the
against the EDSA directory. Since then, Yehey
Philippine Daily Inquirer (http://www.inq7.net)
has branched into a general-use portal and e-
put Philippine news on the web.
commerce service provider with the PayPlus+
system. A portal is a general-purpose Internet
site which caters to users seeking information
or accessing common services such as
checking email. The BusinessWorld Internet Edition,
now BusinessWorld Online (http://www.
bworldonline.com) was the first to go online,
in October 1995. It put a large amount
of regularly-updated content on the Web,
satisfying readers abroad who sought Web
versions of their daily Philippine reads.

ABS-CBN Interactive (later known as

Pinoycentral – http://www.pinoycentral.com)
and GMA Network (http://www.gmanetwork.
com) started deploying content online as
well.

The first Philippine Webby Awards – later
called the Philippine Web Awards (http://
www.philippinewebawards.com) – was
held at the Hard Rock Café, Glorietta Mall,
Makati City. The Awards was patterned
after the US Webby awards, as it was
originally organized by The Web Philippines
magazine. The Web Magazine US ran
the original awards. The sites that made
up the entries and finalists served as a
snapshot of the state of the Web industry,
and with the number of sponsors involved,
it became important commercial tool.
1998
Bert is Evil (http://www.fractalcow.com/bert/
bert.htm) won the prestigious Webby Award
(http://www.webbyawards.com) in San
Francisco. Dino Ignacio is the first Filipino to
win a Webby Award. (March 6, 1998)
PhilRadio (http://www.philradio.com) began
its live Filipino radio programming on the
Internet. It caters to Filipinos abroad who
miss radio shows back home. 4

Legmanila (http://www.legmanila.com) and

Localvibe (http://www.localvibe.com) started
operations as independent companies. Both
sites featured original writing and content. In
2000, they would be acquired and merged by
Singaporean dotcom GetAsia.com. Later on,
GetAsia Philippines would close down, and
ClickTheCity.com, an online events and reviews
site, started. 5

phillipineinternettimeline 19
 philippineinternetreview

2000

Mp3manila (http://www.mp3manila.com) was

one of the more prominent dotcoms during
their rise to prominence. It was funded by the
dotcom venture company, Ajonet Holdings,
and sought to promote local artists by hosting
their music. While it became public through 2001
hype, it quietly faded away. I asked one of
the founders, Nono Felipe, about this. His US-based Pinoy artist Dino
response: Ignacio created the “Bert
is Evil” site as a spoof.
“On why or how we closed down, all I can Sympathizers of Osama bin
say is that during the dot com era, business Laden used it to make the 9/11 leader look
principles were not as sound as they are now. good, so Ignacio shut it down. This gave him
I mean let's face it, not all business models worldwide fame. Dino Ignacio is the artist
then were proven to be viable. Add that to behind the animated “Maritess versus the
an immature market like Manila, where Superfriends” (http://www.fractalcow.com/
the penetration of electronic commerce rex/) cartoon, performed by Fil-Am comedian
is negligible... the bottom line is that the Rex Navarrete. 6
Philippines was and is still not ready for digital
rights management (DRM). And that was one
of our biggest potential drivers. Setting up
the whole infrastructure of DRM costs so
much, yet no one wanted to buy digital music
here. Add that to the fact that you could get
pirated CDs for less than a hundred bucks.
And it came just in time with the dot com
bomb in the US.

A lot happened. Market factors, financial

factors, etc, etc. The way I see it, all good
things come to an end. They can speculate all
they want. They can guess what happened...
But at the end of the day, it doesn't matter
why or how we closed down. The mere fact
that we built it still amazes me to this very
day.”

“Maritess vs. the Superfriends” (above) and

“Bert is Evil” are two of Dino Ignacio’s creations
that put Filipino creativity on the Internet map.

20 phillipineinternettimeline
 philippineinternetreview

COMMUNITIES & EVENTS

1986 - 1994

The BBS community was formed online. BBS systems offer private messaging and message
boards, based primarily on Fidotech technology. They interconnect to form BBS networks and
exchanged messages called “echoes” since they echo or copy each others’ messages. The
individual messages were called “echomail.” Since these systems were based on regular phone
lines, and had no Internet connection, only one or a few users could log in at a time.

The term “EB” was first applied used by the online community to mean meeting in person. It
came from the language of the Citizen’s Band (CB) Radio community.

1988
The Science and Technology Advisory Council
is formed to coordinate “expatriate human
resources in key development programs of
the country.” Its electronic network STACnet
is important because it brought interest to
the fledgling Philippine Internet from those
around the world, with focus on the scientific
community. The first email sent from the
first live Philippine Internet connection at
the University of San Carlos was addressed
to STACnet, on March 29, 1994. 7
1990
The soc.culture.filipino (SCF) discussion
group is formed by Aimee Manosa. Its
charter provides “an open discussion on
issues concerning the Philippines.” The
group started with the Filipino Internet
veterans abroad. The topics primarily reflect
the point of view of the overseas Filipino and
interested observers. The message archives
are available at Google Groups: http://
groups.google.com.

SCF uses the Usenet system where servers

around the world exchange messages in
1994 categories called newsgroups. This system
is separate from electronic mail, and uses
the Network News Transfer Protocol (NNTP).
Live Internet access brought access to
It is no longer commonly used by today's
facilities such as the Internet Relay Chat
casual Internet users. The system did not
(IRC) chatrooms, and custom services
catch on in the Philippines due to the huge
accessed via the telnet protocol. These
amount of bandwidth required. 8
protocols allowed interactive connections
which were impossible with the store-and-
forward systems used previously. The custom
services included Multi-User Dungeons
(MUDs), the forerunners of today’s graphical
role-playing games and MMORPG’s (Massive
Multiplayer Online Role Playing Games).
Mosaic Communications established its own
popular telnet-based chat server called
“Chat Manila.” Real-life communities formed
around these systems.

phillipineinternettimeline 21
 philippineinternetreview
1996
ISP Sky Internet put up an IRC chat room
called “The Lounge” which became popular
among the local community.
The Cyberspace Live ISP/online service
established “eForums,” the first local web-
based forum and discussion system. This
was a precursor to the web-based bulletin
boards that became popular in the late 90’s.
September 1996
Internet World Philippines, the first local
Internet show, was held at the EDSA Shangri-
La Plaza Hotel. At this event, PLDT announced
its acquisition of Infocom Technologies,
marking its venture into the ISP business.
This event also hosted the “Browser Brawl”
between Microsoft Internet Explorer and
Netscape Navigator, where representatives
of the latter failed to show up.
February 1998
Local ISP’s IPhil Communications, Mindgate
Systems and Worldtel Philippines host the
third APRICOT (Asia Pacific Regional Internet
Conference on Operating Technology). This
technical conference was held at the Makati
Shangri-La Hotel. Internet Engineering
experts from all over the world came to
hold technical sessions and tutorials. This
conference has been held every year since
1996, and is hosted by a city in the Asia-
Pacific region. The event is also an important
face-to-face social gathering for industry
professionals. 9
22 phillipineinternettimeline
June 1996
The Philippine Internet Service Organization
(PISO) was formed with Albert Velasco
(of Mailstation Net) as the first president.
This was the fruit of discussions among ISP
officers since late 1995. The ph-isp mailing
list served as the online forum for these
initial discussions. On August 20, the officers
and trustees were inducted in Malacañang
by President Fidel V. Ramos.
August 1997
WS Expositions organized the Internet
Commerce Expo Manila 1997 (ICE Manila 97)
at the Shangri-la Hotel Makati City. This event
introduced the WS Group to Fiesta Online,
known for Yehey.com.
1999
PinoyExchange.com forum started operations.
It became one of the largest online communities
in terms of message volume, users and mind
share. iAyala, the Internet venture arm of
Ayala Corporation, made an investment in
2000. Several other forums followed. It is still
running to date, surviving slowdowns and a
system crash.
 philippineinternetreview

2001

Blogs and online journals became common.

These are text-oriented sites that reflect
the daily opinions or chronicles of their
publishers. They add fresh content from a
personal point of view, as opposed to the
corporate view espoused by mainstream
websites. Blogs allow bits and pieces of
information from the Philippines make their
way to Filipino readers abroad. Online games
(not gambling) become available with local
servers. Mindgate offers pinoybattle.net,
which provide action and shooting-oriented
games. Surf Shop operates gamena.com,
offering board and card games.

2003

Level Up! Games licenses the Oz World and

Ragnarok online games. These become popular
among young players, increasing growth in
Internet usage at home and in cybercafes,
and promoting e-commerce through online
ordering of credits. The company is adopting
the Korean model of multiplayer online
gaming. 10

The Philippine Internet Commerce Society

launched its PICS SME IT Excellence
Awards in the 2nd E-Commerce Congress
and recognized Godiva for its efforts in
adopting ICT and Internet use.

2004

PLDT vs. PLDT

The dispute over PLDT.COM between the Philippine Long

Distance Telephone Company (PLDT) and Gerry Kaimo
peaked on January 29, 2004. A judge of the Quezon City
Regional Trial Court denied the request by PLDT for a
preliminary injunction.
PLDT accused Kaimo of infringing on the intellectual
property of the trade name and “engaging in unfair competition
for using the trade name.”
This is not yet the end of the story, which started on in
September 1999 when PLDT filed a 1.35 million peso lawsuit
against Kaimo. Kaimo expected that PLDT would appeal the
case to higher courts, while preparing his own 50-million
peso countersuit against PLDT. ii

phillipineinternettimeline 23
 philippineinternetreview
E-COMMERCE
1989
Jose Emmanuel “Joel” Disini administers
the PH domain, the top level domain for the
Philippines. He obtained the rights from then-
administrator of the global DNS services, Dr.
Jon Postel. He operates an e-mail service
called the E-Mail Company. 11
1997
The WS Expositions Group organizes the
Internet Commerce Expo in September
1997. This shows that Internet commerce
deserves its own events.
The ATM network Bancnet operates an ISP
for its member banks. This made use of the
existing connections between the Bancnet
system and its members.
24 phillipineinternettimeline
1996
The Philippine Internet Commerce Society
(PICS) was formed to advocate e-commerce.
Internet banking starts.
In December 1995, Urban Bank announced
its plans to start a virtual bank. In 1997, the
bank introduced its Home Virtual Banking
service.
According to Janette Toral:
First investment bank website (information) is
BPI Capital (http://globe.com.ph/~bpicapr/)
(early 1996).
First savings bank website (information) is
BPI Family Bank (http://www.bpi.com.ph).
(December 1996)
Today, many banks offer transactional
services over the Internet, allowing their
customers to access their bank accounts and
services.
1998
San Miguel Draft Beer goes online. This is
the first full e-commerce site operating from
the Philippines. The proponents were World
Port (an Internet services consulting firm),
IBM, San Miguel Corporation, and Equitable
Card Network; with the support of Intelligent
Wave Philippines, and Infocom Technologies
Incorporated; working with the
Department of Trade and Industry
(DTI) and the E- Commerce
Promotion Council of the Philippines
(ECPC). This showed that the
Philippines is capable of facilitating
online commerce. 12
 philippineinternetreview

1999
Auction sites flourish, following the trend in
the US, with popular services such as eBay.
These include eAuctions.ph, which closed
and reopened as Avalon.ph; PinoyAuctions,
which was acquired by ABS-CBN and merged
with PinoyCentral; SurfingBananas, which
has closed down; and Bidshot, which offers
SMS-based bidding. These make use of a C2C
(Consumer to Consumer) model where the
buyers and sellers transact directly and the
website merely facilitates the meeting of the
two.
E-Store also began its e-commerce store
operations. 13
2001
Various developments heated up the
issue over the PH domain. The group
opposed to dotPH and Joel Disini
organized PhilDAC (Philippine Domain
Authority Convenors). dotPH president Jose
Emmanuel Disini sues Fernando Contreras,
Jr., president of PISO (Philippine Internet
Service Organization) and ISP Inter.net.
2000
The E-Commerce Law—Republic Act 8792,
was signed into law on June 14, 2000. It has
a scope much wider than the “e-commerce”
in its name, as it also covers digital signatures
and “hacking” activities. The salient features
of the E-Commerce Law are listed here:
ht tp://w w w.digit alf ilipino.com/writing _
article.cfm?id=19
B2B Business Exchanges started operating,
to offer services for corporate buyers and
sellers. These include Bayantrade, formed
by a consortium of large companies;
SourcePilipinas, from the Yapster group; B2B
Price Now; and PhilBX (Philippine Internet
Business Exchange) from the SSI group.
These systems allow companies to achieve
savings and increase efficiency by bidding
and procuring online. Since the companies
involved have existing relationships, this
avoids the B2C (Business to Consumer)
problem of Philippine e-commerce where
payment systems are not well developed. 14

Prosperity.com is found guilty of selling and

distributing securities under an illegal pyramid
scheme. It was selling expensive websites.
During this time, Multi-level Marketing (MLM)
schemes became popular on the Internet. 15

Yahoo Computer Services, a local company,

loses yahoo.com.ph to Yahoo! Inc. This is the
first time a Philippine company enters into
a domain dispute with a foreign corporation
and a well-known Internet brand. This
shows that the scope of well-known Internet
names is global, and Internet companies are
concerned about misuse of their name even
for local domains. 16

phillipineinternettimeline 25
 philippineinternetreview

2003

Online merchants outside the country block

transactions originating from the Philippines and
some other countries. This measure is intended to
prevent credit card fraud by blocking customers en
masse, instead of addressing fraud on a case-to-case
basis. One merchant with this policy is the
domain registrar GoDaddy.com, which now
blocks IP connections from the Philippines.
Their blocking strategy affected local domain
owners who used them to register domains.
The Philippines is known among merchants to
have high incidence of online fraud. 17

PLDT offers the Cyber Madness promo. It

partners with dealers to offer computers on an
installment basis when tied up with a dialup
or DSL broadband subscription. This expands
their consumer base beyond customers who
already have PC’s, and aims to improve the low
domestic PC penetration which hurts Internet
expansion. 18

To this date, low credit penetration due to low

income is a barrier to e-commerce adoption.
Traditionally, Internet commerce systems have
been dependent on credit cards. Fraud concerns
also stop people abroad from using their cards
on local sites.

26 phillipineinternettimeline
 philippineinternetreview

PARTNERSHIPS/COOPER ATION

1988 1992

The Science and Technology Advisory Council
is formed to coordinate “expatriate human
resources in key development programs of
the country.” Its electronic network STACnet
is important because it brought interest to
the fledgling Philippine Internet from around
the world. The first e-mail sent from the live
connection at the University of San Carlos
was addressed to STACnet. 7
Dr. William Torres was the managing
director of the National Computer Center,
the government agency promoting
computerization in the country. At that time,
the US academic, non-profit Internet was
of the NSF (National Science Foundation)
network. The NSF was headed by Steve
Goldstein. The two met and Dr. Torres was
convinced that a full-time Internet connection
was necessary. 3

1993

Setting up the first live Internet connection was

a cooperative effort of different groups.

Dr. Torres approached the Manila Electric

Company (Meralco), and the Philippine National
Bank, since they were well-funded entities.
Both declined to fund the project.

DOST Secretary Ricardo Gloria heeded Dr.

Torres' proposal for the Philippines to connect to
the Internet. He included it in the Science and
Technology Agenda for National Development.
(STAND). Dr. Rodolfo Villarica of the Industrial
Research Foundation (IRF) was put in charge.
Philnet was formed. Dr. William Padolina became
DOST secretary and oversaw the project. 3
Dr. William Torres, Father of Philippine Internet.
Philnet started out with an email connection for
“Phase I,” performed through a dialup UUCP
(Unix-to-Unix Copy Protocol) connection made
between the Ateneo de Manila University and the
Victoria University of Technology in Australia. various and universities and organizations. Arnie
De La Salle University and UP Diliman joined the del Rosario, then chair of the Ateneo Computer
dialup network to receive international e-mail Science Department, informed the chair of
through the Ateneo gateway. This connection ComNet, the late Dr. Willy Gan about the project.
used UUCP to batch up mail to and from the Dr. Gan drew up the PHnet network design and
Internet from the participating institutions. convinced PLDT to deliver the facilities in time
for the March 29, 1994 launch in Cebu. This was
The DOST made a grant of PhP 12.45 million to to coincide with the E-mail Conference headed
the IRF to implement Philnet “Phase II,” for a by Dr. John Brule, a friend of Dr. Villarica and a
direct, live connection to the Internet. visiting professor at the University of San Carlos.
Benjamin “Benjie” Tan headed the technical
The DOST contracted Computer Systems Network part of project.
Corporation (ComNet), a networking equipment
vendor to implement the network linking the Later, Philnet is renamed to PHnet to avoid
a naming conflict with another group, a
“philosophers’ network.” 19

phillipineinternettimeline 27
 philippineinternetreview

1994

March 29, 1994: The historic activation of the Philippine’s first Internet link with a permanent
TCP/IP connection. This was a 64 Kilobit per second line using PLDT and Sprintlink, the IP service
of US telco Sprint. Benjie Tan did the activation on the router co-located at the PLDT premises in
Makati City, while Richie Lozada of Ateneo handled the Cebu end. This was in time for the target
date, the day of the E-Mail Conference led by Dr. Brule, held at the University of San Carlos.

The 64 Kilobit per second line run by PHnet is upgraded to larger capacity links, until the point
where PHnet buys service from Bayantel's Internet service instead. This is when the institutional
members of PHnet shifted their uplinks to commercial ISPs. 3

INVESTMENTS & BUSINESS

Before 1994 1994

Only multinational companies with external
links to their home countries had Internet
connections. These connections are linked-
up to the commercial Internet at their home
countries, passing through their corporate
gateways and firewalls. This was because
the Internet connectivity was only secondary
to the goal of accessing Internet resources.
When the Philippine Internet became more
established, this situation reversed and most
multinationals accessed their parent networks
through encrypted Virtual Private Networks
(VPN's) instead.
1995
ISPs were the first type of Internet
business. Companies with interests in IT and
telecommunications were natural choices to
study the possibility of Internet as a business
opportunity. Most telcos were not aware of
this potential and regarded the Internet as a
threat to their traditional businesses.
1997
The Asian Currency Crisis affects sectors of
the industry that depend on imports such
as bandwidth, and capital expenditures like
routers and servers. Some Internet providers
had to adjust their rates or peg them to the
US Dollar to keep up wih this development.

More companies enter the ISP business. The
number peaks at around 200 ISPs in 1999.
An ISP directory went up (unfortunately, it is
now closed) to count the growth, since the
Philippines was proud to have the largest
number of providers in the ASEAN region.
1998
Internet-focused consulting companies become
prominent. They include Worldport, k2ia and
25by8. They offered Internet solutions and
partnerships with service providers to provide
useful utilities to the Internet public. 20
Singaporean ISP Pacific Internet partners with
local provider Primeworld Digital Systems to
set up Pacific Internet Philippines. This was
the first large foreign ISP to set up locally.
Primeworld was started in 1996.
The Philippine Stock Exchange offers online,
real-time stock quotes with the help of ISP
Portal, Inc. This coincided with the stock
market boom, where many people including
foreign investors were interested in the data.

28 phillipineinternettimeline

1999
Established companies start moving into the
dotcom boom. Ayala forms the Ayala Group
Technology Business Development Group,
which later becomes iAyala. The Benpres group
of the Lopez family forms eLopez. PhilWeb.
Com acquires majority control of South Seas
Natural Resources, an exploration company—
the first backdoor listing into the Philippine
Stock Exchange. Acoje Holdings, a real estate
company, becomes AJOnet. JG Summit sets
up Latitude Web Philippines. This shows that
the Internet has become mainstream in terms
of business interest, both for complementing
their existing business, and for opening
avenues for investment in new ventures that
were then considered lucrative – before the
dot com crash. 21
2000
The dotcom boom hit the Philippines in full
force. This included unbelievable hype from
some players. The enthusiasm spread into
venture capitalism, as investors looked for
high returns on their investments. Startups
became fashionable, and incubators such as
HatchAsia (Helping Asian Technopreneurs
Change Asia) became prominent. HatchAsia
held a camp for start-ups, cashing in on
people's interest in joining the craze. Business
plan competitions took place to fish out new
ideas from more people. 22
philippineinternetreview
Timeline Tidbit
Alan Robles, former editor-in-chief of <LINK>
magazine, described Philippine dotcom mania in
his article “World Wide Wackiness: Silly Season
in the Philippines”. http://www.hotmanila.ph/
leantech/silly.htm.
I asked him if he felt vindicated when his
predictions came to pass. His reply:
It wasn't really hard to see it coming:
despite all the predictions about a "new
economy" and growth not subject to the
normal laws of economics, anybody who'd
read a few books and business magazines
could see that what came up had to come
down. As early as 1998 I remember telling
my friends at Link how the exuberant (i.e.,
reckless) growth based on the disregard of
due diligence couldn't last for long— it was
all going to come crashing down. And of
course once you saw it coming in the US, it
was only a matter of time before the effects
rippled down to our country. It didn't really
help much that when the wallets of investors
opened, the best that local companies here
could think of were "me-toos" — free email,
auction sites, medical sites. Nobody paid
attention to the distributed nature of our
working population— seven million Filipinos
scattered around the world, many of them
wired because of sheer necessity.
Journalist Bill Huang says that the dotcom
boom is (in hindsight: was) an April Fool’s joke.
http://www.codewan.com.ph/CyberDyaryo/
commentary/c2000_0406_01.htm.
US ISP and “Internet Supercarrier” PSInet
acquires two local ISPs—IPhil Communications
and Internext (I-Next)—as part of its global
expansion. It merged the two into PSINet
Philippines. In 2001, PSINet sells the local
company to its spin-off company, Inter.net.
PSINet later declares Chapter 11 bankruptcy,
and Inter.net worldwide becomes an independent
organization.
SAGE (Sports and Gaming Entertainment)
operates an Internet-based casino. It is
licensed and monitored by PAGCOR (Philippine
Amusements and Gaming Corporation), the only
government body which can authorize gambling
activities. The virtual casino is accessible from
both Internet connections and kiosks set up at
malls. 23
phillipineinternettimeline 29
 philippineinternetreview

CULTURE

Filipino Internet Culture Traditional Culture

Filipino Internet culture started with the novelty of
e-mail and chatting. When access to Web spread,
personal homepages became popular. These were
typically hosted on the space provided by the
ISP, until free, ad- supported web space became
common.
Instant messengers made chatting more accessible
to the casual user. ICQ was the first to be adopted.
Extra messenger applications such as games,
voice chat, and web cameras became popular and
drove up usage.
In 2003, Internet culture was shaped by Friendster
social networking and the Ragnarok game.
Friendster became the new “e-mail address,” as
people connected to each other. While foreign-
based social networks became popular, a local
social network went up—funchain.com—by Jason
Banico. The youth played—and got addicted
to—the Ragnarok multiplayer game franchised by
Level Up! Games.
Internet use has cultural influences. Internet adoption
echoed real world pop culture. The popularity of
anime, cell phones, and music were copied into the
virtual world. Websites that catered to particular
communities emerged, such as Femalenetwork.
com for women, ManilaTonight.com, MyGimmick,
and others for “gimmicks”, and Tsinoy.com for the
Filipino-Chinese community. Technology-oriented
people had their share of communities for its different
aspects. Sites such as Yahoo! Groups made it easy
for people to create their
own online communities
for whatever purpose.
The Internet has clashed with traditional Filipino
culture. The issue of Internet pornography
and inappropriate content recurs because of
the easy availability of material through the
Web and peer to peer file/sharing applications.
“Scandal” pictures and videos have been
circulated, and organized Internet pornography
operations have popped up.
The Philippine Catholic Church, traditionally a
big influence in public morality, has spoken out
against pornography. Filtered access was the
main premise behind establishing the failed
CBCPnet venture in 1999. This was intended
as a large-scale Internet service provider, but
ended in financial and legal ruin in 2002.
Today, CBCPWorld.com is online again, with
new partners. Instead of serving the consumer
market, the ISP is connecting Catholic schools
nationwide. It also provides Internet literacy
capacity building or training to elementary
and high school teachers focusing on how
technology can be used in boosting the quality
of education.
Current ISP’s that offer filtering are Infocom’s
Netsafe (http://netsafe.info.com.ph) and
Uplink (uplink.com.ph). 24

Many of these online

communities crossed
over into real-life,
with some becoming
formal, registered
organizations. The New
Worlds Convention—
http://www.newworlds.
tk/—was organized
twice by science fiction/
fantasy fan groups
which were formed
online.

30 phillipineinternettimeline
 philippineinternetreview

Politics

Despite the relatively small number of users,

the Internet has been used for Philippine
political purposes. Government offices
and politicians have websites. The most
prominent use of the Internet was during
the ouster of President Joseph Estrada in
2001. ELagda sought to obtain one million
online “signatures” to petition Estrada to
resign. Other sites included Transparent
Accountable Governance (tag.org.ph) and
Guerilla Information Network (gin.ph, now
closed). NAMFREL (National Movement for
Free Elections) count of the 2001 Senatorial
elections was run with the cooperation of ISPs
which helped collect the results.

The campaign for the 2004 elections saw the

candidates with websites serving as the online
equivalent of their real world campaigns.
The candidate websites are complemented
with online analysis. Blogs show people's
perspectives on current events.

phillipineinternettimeline 31
 philippineinternetreview
SOURCES/REFERENCES
1 Email of Portal founder, Patrick Deakin, to the
digitalfilipino group:
http://groups.yahoo.com/group/digitalfilipino/
message/1853
2 Ayala Corporation Web Page Goes On-Line, by
Joseph Dennis A. Cuan Computerworld Philippines
- August 31, 1995, archived at:
http://web.archive.org/web/19961224173725/
www.europa.com/~jra/cyber/news/ayala.htm
3 RP Marks 7th Year on the Internet (Computerworld
Philippines, March 26, 2001) By Chin Wong and
Melba-Jean Valdez
h t t p : // w w w . i n f o . c o m . p h / ~ c h i n w o n g /
RP%20marks%207th%20year.html
4 • Recollections of Heinz Bulos.
http://www.heinztein.com/archives/2003_11_
01_archives.htm
• PhilRadio announcement at
http://groups.yahoo.com/group/digitalfilipino/
message/5
5 Interview by Ruel de Vera for Sunday Inquirer Magazine,
January 7, 2001
http://web.archive.org/web/20030605092817/
http://www.clickthecity.com/info/press4.asp
6 Urban Legends Reference Site.
http://www.snopes2.com/rumors/bert.htm
7 • The STACnet FAQ archived at:
h t t p : / / w e b . a r c h i v e . o r g /
w e b / 19961224045743/www.europa.com/~jra/
stac/stacfaq.html
• Source: Danilo Caacbay’s recollection at:
http://www.pinoyfirst.com/oneinternetday/
caacbay.htm
8 • SCF: Flips in Cyberspace: Somewhere on the
Internet, a virtual community of Filipinos has
found a home by Jim Ayson. Archived at:
http://web.archive.org/web/19961224173946/
www.europa.com/~jra/scf.htm
• More SCF recollections from the early days are at:
http://www.pinoyfirst.com/oneinternetday/
index2.htm
9 Reference:
http://www.apricot.net/apricot98/
10 Korean-born online games invade RP, by Erwin
Lemuel E. Oliva, INQ7.net.
http://www.inq7.net/inf/2003/may/11/text/
inf_2-1-p.htm
11 Facts and issues about the PH domain issue are
presented at ITNetCentral:
http://www.itnetcentral.com/special_reports/
dotph/introduction.htm
12 Site of the Times, Volume 1, No. 6, October 1998
http://web.archive.org/web/20010729014408/
www.msc.edu.ph/wired/internetbeer.html
13 • eAuctions.ph article by Janette Toral.
h t t p : / / g r o u p s . y a h o o . c o m / g r o u p /
digitalfilipino/message/4
• E-Store article by Janette Toral.
h t t p : / / g r o u p s . y a h o o . c o m / g r o u p /
digitalfilipino/message/18
• ABS-CBN buys into PINOYAUCTIONS.COM By
Veronica C. Silva, Businessworld IT Matters,
August 3 2000.
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
08032000a.html
14 Text of RA 8792:
h t t p : / / w w w . p i c s . o r g . p h / e - c o m .
asp?action=view&id=7
15 SEC threatens to revoke Prosperity.com’s license,
Catherine C. Junia, Businessworld Online:
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
06152001e.html
32 phillipineinternettimeline
16 • The WIPO (World Intellectual Property Organization)
decision:
http://arbiter.wipo.int/domains/decisions/
html/2001/dph2001-0001.htm
• The story of local Internet credit card thieves
is: Hacker’s Paradise by Daffyd Roderick, Time
Magazine.
http://www.time.com/time/asia/digital/printou
t/0,9788,105665,00.html
17 E-commerce sites discriminating against Filipinos?
By Eleanore C. Sanchez, Businessworld IT
Matters, June 13-14, 2003
h t t p : // i t m a t t e r s . c o m . p h / n e w s / n e w s _
06132003a.html
18 Telco promo seeks to grow PC and net service
in RP homes, Maria Patricia Anne L. Perez,
Businessworld IT Matters, May 19, 2003
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
05192003h.html
19 • Philnet program shifts into high gear by Edwin
P. Boon, ComputerWorld Philippines, Dec 15,
1993. Included in the old soc.culture.filipino FAQ,
archived at: http://faqs.jmas.co.jp/FAQs/filipino-
faq/part2
• Mosaic Communications profile at: http://www.
mozcom.com/company/profile.html
20 Local software companies look for niches amidst
problems and competition, by Helen S. Andrade,
BusinessWorld IT Matters, October 27, 1999.
http://itmatters.com.ph/features/features_
102798.html
21 • Philippines: The number's up for fixed lines
by Mary Ann L Reyes, Asia Times Online July
18, 2001. http://www.atimes.com/reports/
CG18Ai01.html
• Summit ties up with Singapore-based
Internet Consultant by Helen Andrade-
Jimenez, Businessworld I.T. Matters, September
21, 2000.
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
09212000d.html
• iAyala Profile.
http://www.iayala.com/profile.htm
• PhilWeb press release.
h t t p : / / w w w . p h i l w e b i n c . c o m / t e m p l a t e .
asp?target=news/2000/p_jan21_ssnr
• AJONET website.
http://www.ajonet.com/about.html
22 • RP still looking for global dotcom by Joey G.
Alarilla, Inquirer Infotech, July 17 2000.
http://www.inq7.net/infotech/jul2000wk3/
info_2.htm
• Internet business plan contest launched in
Asia, Businessworld IT Matters, September 21,
2000.
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
09212000b.html
23 RP online gambling launched in August by Sol
Jose Vanzi, Philippine Headline News Online.
h t t p : / / w w w . n e w s f l a s h . o r g / 2 0 0 0 / 0 6 / s i /
si000544.htm
24 The CBCPNet scandal, Basic rules ignored.
By Helen A. Jimenez, Senior Reporter,
Businessworld IT Matters
http://itmatters.com.ph/features/features_
07172002.html
ii • h t t p : / / w w w . i n f o . c o m . p h / ~ c h i n w o n g /
runningstories.htm
• http://www.inq7.net/inf/2004/feb/04/inf_1-1.htm
by Janette Toral

lobally, we’ve gone a long way in using the Internet.

It is estimated that there were 490 million Internet
users in 2001. By 2005, this figure is expected to
reach 1 billion. The Computer Industry Almanac predicts
that, in 2005, an increasing portion of Internet users will be
using wireless devices such as web-enabled cellular phones
and personal digital assistants (PDA) to go online.

In the Philippines, from less than 5,000 Internet users in

1994, we now have an estimated 6 million in 2004. By
2014, we expect to have 41 million Filipino Internet users.

In our research, the majority of Internet users as of 2003

are women (58%) compared to men (42%). In the first
nine years of the Internet, men comprised the majority of
users. Today, men may spend less time online but are more
advanced in their Internet use.

As the trends in this chapter will show, the Internet usage

habits of a Filipino Internet user is greatly influenced by the
infrastructure, cost, and resources available.
 philippineinternetreview
• The Philippines has an estimated
1 100,000 Internet users.
• In the Philippines, estimates quoted
9 by a study recently published by
the Carlos P. Romulo Foundation for
9 Peace and Development noted a mere
US$1.6 million worth of business
7 done through the Web in 1997, with
only about 6% of those are Filipinos
with Internet access who purchased
products online. The forecast sees a
jump to US$383.7 million by 2002,
with the ratio of Net-connected
Filipinos participating in such electronic
commerce (or e-commerce) expected
to grow to 30%. 1
Mr. Garcia said the country is also getting
the critical mass of Internet users that
an Internet-based service requires. “As
of end-1998, we had 350,000 Filipino
Internet users, not counting those
abroad. By 2001, it is predicted that
one million Filipinos will be on the Net.
By 2005, there will be five million,” he
said. 4
Mr. Alvin Yong, Asia Pacific technology
office vice-president of Citibank NA
Singapore, noted that Internet banking
has grown at an annual rate of 174.5%
from 1995 to 1998 with World Wide Web
users totaling about 130 million. 5
36 filipinointernetuserevolving
• There were about 100,000 to
150,000 Internet users in the
country, according to a report by W3
Business Communications.
1
• Cisco Systems Philippines country 9
manager Manuel Rivera said the
Philippines is second only to the 9
United States in terms of people with
the highest inclination to adopt the
8
the use of Internet in their activities.
This finding is based on the results of
a study, conducted by a Singapore-
based firm, on the local Internet
market. "On the average, the study
said Filipinos use the Internet
three hours per week," he said. It
also showed that the average user
maintains subscriptions with two
Internet service providers or ISPs.
Most of the Filipinos on the Net belong
to the B and C economic classes. 2
The Social Weather Stations (SWS)
also in the same year reported that
only one percent of Filipino households
have Internet access. This amounts to
about 146,000 homes based on 1999
population estimates. 3
Neil Hortillo of WS Research Corp said
there were an estimated 217,121
Internet users in the country as of end-
1998. Of this number, about 75% had
access to the web. In 1998, only about
6% of Web surfers bought products
through the Web. 6

• The 1999 Philippine Internet User
Habits and Demographics Survey was
released. It was conducted jointly by
1 Web Philippines, Business-World Online
and Market Frontiers Research.
9 • There are more male (57%) than female
Internet users and the average age of
9 the user is 27.67 years.
9 • Majority of the users (46%) belong to
the 25 to 34 age bracket while 37% are
within the 19 to 24 age bracket.
• Fifty-one percent (51%) have finished
college, and 32% are pursuing graduate
work.
• A majority (57%) use the Net more
than once a day. Still, a significant
numer (19%) do so only once a day.
• Internet connections are usually done at
home (69 %) while 35% said they log
on both from their homes and offices.
• The Internet is used primarily for e-mail
(89%). Other uses, as confirmed by both
studies, are research and conducting of
business. 3
In the Philippine Communication Satellite
Corporation (Philcomsat) April-May 1999 survey
of 974 respondents in Metro Manila, Philcomsat
found that at least “60% of Internet subscribers
were unsatisfied” with their service provider.
Their most common complaints include abrupt
disconnections (34%), busy signals for dial-
up accounts (34%), and slow download times
(45%). 8
Latest figures from market research firm
International Data Corp. (IDC) Asia Pacific
show e-commerce revenue from the
Philippine market is expected to reach $153
million and $193 million in 2002 and 2003,
respectively. 9
philippineinternetreview
The Philippine Communications Satellite
Corporation (Philcomsat) conducted a
survey on Internet usage among 974 Filipino
business professionals in 1999
Results shows that:
• 60% of Internet subscribers in the Philippines
are not satisfied with their current service
due to frequent disconnections, busy
signals or slow downloading times.
• Electronic mail makes up the most of
Internet usage in the Philippines at 88%,
then web surfing at 60%. Internet chats
came in at 29% and newsgroups at 17%.
The survey also showed that downloading
files in the Philippines is still the most
popular of use of the Internet. 7
Internet commerce in the Philippines will rise
at a compounded five-year growth rate of
250%, while Internet commerce worldwide
and in Asia-Pacific, will grow at only 131% and
200% respectively, in the same period, said
Neil Hortillo, research director of WS Research
Corp., a local affiliate of United States-based
International Data Corp. (IDC).
Mr. Hortillo said the number of Filipino
users of the World Wide Web who actually
buy goods over the Internet will rise to about
30% by 2002. As of March 1999, the number
of Internet users worldwide is estimated at
close to 154 million. The number is broken
down as follows: 27 million were in Asia-
Pacific, 87 million were in the US and Canada,
and 34 million were in Europe. 6
Pacific Internet sales and marketing
director Rowena Blas claimed that
Pacific Internet has cornered 20% of the
Internet market in the Philippines. Based
on estimates made early this year, the
number of Internet users in the country is
about 220,000. 8
filipinointernetuserevolving 37
 philippineinternetreview

• ACNielsen reported that PhP2.41

2 billion was spent on online DigitalFilipino.com launched the first
shopping in the first half of 2000.
0 • PhP13,100 online spending per
e-commerce book in the Philippines in
June 2000, followed with the StatsReport
0 person in the second half of 2000
and PhP9,800 per person in the
series with the intent of reviewing
Internet developments in the country.
0 first half of the same year. 10

In the Filipino
Online Shopper
Report published
• ACNielsen estimated that in June 2002, the
PhP3.24 billion was spent in the
2 second half of 2001 by Filipinos
following findings
were highlighted:
0 for online shopping.
• PhP1.64 billion was spent by Responses from
0 Filipino online shoppers in the online buyers
first half of 2001. show that the
1 • PhP14,400 spending per online top 5 out of 20
shopper in the second half of products and
2001. 10 services, Filipinos
buy online are
books (54%), computer software (33%),
domain name (31%), web hosting (25%),
and computer hardware (24%). The top
5 sites, out of 79 named, where Filipino
DigitalFilipino.com estimates buyers shop are Amazon (http://www.
there are 2 million Internet amazon.com-54%), E-Bay (http://www.
users at this time. e-bay.com-11%), MyAyala (http://www.
myayala.com-11%), Network Solutions
(http://www.netsol.com-8%), Barnes
and Noble (http://www.bn.com-6%),
and Register.com (http://www.register.
com-6%).

About 66% of computer owners access

the Internet from their homes. With
Internet access also available in the
workplace, home use is done on a “per
need basis.” In the provinces, there are
those who don’t use it at home because
there are no avalable telephone lines.

Internet cafes continue to be a popular

venue for access. However, as the
number of PC usage at home increases,
offices, and schools, the cafés will not be
as popular. 23% connects to the Internet
from these places from time to time.

38 filipinointernetuserevolving
 philippineinternetreview

What Filipinos Buy Online What Filipinos Buy Online

(2000) (2001)
• Books •
• Books • • Computer software •
• Computer software • • Domain name •
• Music • • Travel services •
• Computer Hardware • Where do Filipino • Web hosting •
• Catalog/Mail Order • Online Buyers Surf
• Yahoo.com
• Google.com
• Inq7.net
• CNN.com Where Filipinos Buy Online
Where Filipinos Buy Online (2001)
• Hotmail.com
(2000)
• Philstar.com • 21-24 years old
• Amazon • • Yehey.com   – Books, computer software,
• Barnes and Noble • • bworldonline.com information services
• Ebay • • 46-55 years old
• DFNN.com – Books, travel services, music CD
• Yahoo • • PinoyCentral.com
• CDNow • • Shopping site
• PinoyMail.com – Amazon.com
• 25-28 years old
– Books, computer software,
domain name, web hosting
• Shopping sites
Internet Access from Cafes Top Mobile – Amazon.com
VAS Applications – Network Solutions
16 and below 75%
17-20
– E-Bay
17%
21-24 33% • Logos and icons • • 29-32 years old
25-28 29% • Ring tones • – Books, domain name, web hosting
Age Group

29-32 21% • Picture messages • • Shopping sites

33-36 11% – Amazon.com
37-40 14% • Daily News • – E-Bay
41-45 7% • Banking • – Register.com
46-55 8% • Games • • 33-36 years old
56 and up 17%
– Books, computer software,
0 10 20 30 40 50 60 70 80 home electronics, travel services
Percent (%) • 37-40 years old
– Books, computer hardware
Buyers' profile • Shopping sites
online Bankers – Amazon.com
64%
– MyAyala.com
21-24
Internet Access from Home 25-28 45%
Age Group

16 and below 100% 29-32 63%

17-20 53% 33-36 45%
21-24 62% 37-40 43%
25-28 66% 0%
Where do Filipinos Buy Online
Age Group

41-45
29-32 74%
46-55 14%
(2001)
33-36 61%
56 and up 0% Amazon (54%)
37-40 97%
41-45 38% 0 10 20 30 40 50 60 70 80 Ebay (11%)
46-55 77% Percent (%) MyAyala (11%)
56 and up 20% Network Solutions (8%)
Barnes and Noble (6%)
0 20 40 60 80 100 Register.com (6%)
Percent (%) US$522.13 average annual purchase per user

filipinointernetuserevolving 39
 philippineinternetreview
• An ACNielsen survey titled, "The Online
Consumer and E-commerce in the
Philippines" which covers the first half
2 of 2002, showed books are still the
favorite products Filipinos buy online.
0 • Other popular products are music-
0 related items, travel bookings, DVDs
and video cassettes, computer hardware
2 (peripherals), magazine subscriptions
and non-educational software.
• As of 2002, there estimates indicated
935,000 regular Internet users in the
country out of the 3.4 million Filipinos
whose lives have been touched by the
Internet. 1.3 million are occasional
Internet users.
• Regular Internet users are defined as
those who use the Internet at least
once a week. 59% of regular users are
male, while 41% are female.
• 380,000 access from their homes,
471,000 from work and 84,000 using
other access points.
• 223,000 online shoppers
• 290,000 online bankers
• Among the online shoppers, some shop
online regularly, others have shopped
only once or twice.
• A total of PhP3.66 billion (US$68.245
million at PhP53.63=$1) was spent on
online shopping.
• Online spending per person is pegged at
PhP16,400 during the first half of 2002.
• 83% of regular users earn wages from a
variety of white-collar occupations. 11
Filipino Internet Users
Typical Email Received
39% of email received are personal
35% are work/business related
26% are spam
38% have been hit by
a computer virus this year
40 filipinointernetuserevolving
On August 2002, the DigitalFilipino.
com Filipino Internet User Report Part 1
highlighted the following findings
depicting Internet users’ habits:
• Research is the top reason for
going online, followed by email,
browsing, business transactions, news,
entertainment, chatting, downloading,
and shopping. 40% connects to the
Internet from their homes with a prepaid
card. Rebel Internet lead in prepaid card
sales.
• Pacific Internet and Infocom are fierce
competitors for combined post-paid
and prepaid subscriptions. 95% uses
the Internet on a daily basis with the
majority staying online for an average
of three to four hours a day.
• In the past, e-mail has proven to
be the application leader and the main
purpose of those going online. However,
the increase in the popularity of text
messaging and having the capability
to send and receive e-mails over the
cellular phone have affected local e-
mail communications. Our list of top
websites does not differ much to the
2001 rankings. Yahoo.com leads as this
dotcom never seems to run out of steam
in its offerings.
• Google.com moved up in our ranking
as Filipinos began to rely on it more when
looking for information online.
• Inq7.net’s readership base grows at a
continuous pace. Its strategy of coming
up with new content online contributes
to its staying power.
• Hotmail.com entered our top 10 for
the first time as it gained acceptance as
a free email tool among Internet users
of all ages.
• Yehey.com held on to our top
sites list. To think that a lot of
people are saying that portals
are dead, Yehey.com as a pure
dotcom player is surviving and
now provides more offerings.
Its shift from a mere search
engine to a high value-added
services company contributes
to its relevance among today’s
Internet users.
 philippineinternetreview

Filipino Internet Users

Internet use per day

2 hours 23% By Daniel Escasa

1 hour 18%
Length of Internet use

3 hours

E
18%
5 hours 9% ven before the Philippines got the rest of us, we were, for the most
4 hours 7% live IP connection to the Internet, part, country bumpkins (“syano” in
8 hours 6% a few hundred Filipinos already got local parlance) on our first visit to
< 1hour 5% a taste of Cyberspace through dial- the big city. We stumbled through
10 hours 4% up Bulletin Board Systems (BBSes). newsgroups and discussion mailing
6 hours 4% For the uninitiated, a BBS is a dial- lists but still managed not to make
0 5 10 15 20 25 up service that takes data calls from absolute fools of ourselves. After all,
Percent (%) their users and allows them limited those were similar enough to BBS
access to the PC hosting the BBS message boards. Besides, Fidonet
through a “green screen” menu. International had a means of gating
This access comes in the form of between Fidonet message bases
message boards similar in content on the one hand and newsgroups
Purpose of Using the Internet
to newsgroups and discussion and mailing lists on the other. We
Research 44% mailing lists. BBSes also had file had therefore absorbed much of
Email 21% areas similar to ftp sites which Cyberspace culture even before
Just Browsing 8% allowed users to download files onto we started our adventure into the
Business Transactions 7% their computers and, if they had Internet.
Entertainment 6% files they wanted to share, upload On the other hand, we had only
News 6% these to the host PC. The vast an inkling of the technical aspects
Chat/Messaging 4%
majority of BBSes were operated of the Internet. We were in awe of
Download 3%
free of charge by hobbyists on receiving a near-instant reply to an
Bills Payment/Shopping 2%
their home PCs, using a residential e-mail we’d sent out only moments
0 10 20 30 40 50 phone line. Consequently, almost all earlier. Those of you who’ve
Percent (%) BBSes were single-line affairs, and connected only to the Internet and
complaints (albeit good-natured) not to BBSes take that for granted.
from users about busy signals and Remember that Fidonet created
difficulty in connecting became only an ad-hoc dial-up network and
a status symbol among System that it could take hours before a
Top ISPs for Home Pacific Internet (17%)
Operators (SysOps), being a sign of message could even leave the BBS
Internet Users Infocom (12 %)
popularity. host computer, let alone get to its
Mozcom (9%)
A BBS was not necessarily intended recipient. It then takes
Globe (5%)
Sky Internet (4%)
stand-alone however. Fidonet several more hours before a reply,
i-Manila (2%) technology provided protocols for if any, can come back. All told, you
PLDT DSL (2%) creating an ad-hoc dial-up network might get a reply only after a day
Digitel One (2%) through which participating BBSes you have sent the message.
Prepaid Internet (40%) synchronized message boards and The other service that held us
- Rebel shared files from their respective in awe was Internet Relay Chat
- PhilWorld file areas. Several BBSes banded (IRC). There we were, exchanging
- Bl@st together to form such a network, pleasantries with dozens of users
- Flash linking users not only in Metro Manila the world over. Our only previous
- PhilWeb but also those in Cebu, Baguio, San real-time chat experience was with
Provincial ISPs (7%) Fernando (Pampanga), and Davao. a one-on-one with a BBS SysOp.
Then, courtesy of US Servicemen- (Recall that most BBSes were
SysOps in Clark Air Base and Subic single-line hobbyist services.)
Naval Base, the Philippine network Eventually, we adapted. We
Top 10 Websites (2002) got a connection to the international even thrived, and some of us even
Percentages are based on the number Fidonet community. Philippine distinguished ourselves. Gerry
of Users who named the sites BBSes therefore provided users Kaimo’s parody site pldt.com
the means to interact with varied consistently places among the top
Yahoo.com 69%
Google.com 34% cultures, although only through the 50 in Google’s news/satire directory.
Inq7.net 24% message boards. In another chapter of this book, we
Hotmail 22% The BBSes brought about the saw kabayancentral.com’s Netscape
Website

Yehey.com 16% culture of sharing. Filipino users’ Open Directory Cool Site rating.
CNN.com 15%
MSN.com 14%
experiences of the early BBS served Remember the mailing list service
PinoyCentral 10% them well in the larger world of the e-groups which Yahoo! purchased
ABS-CBN.com 8% Internet. In fact, many BBS SysOps in the late ‘90s and transformed
Microsoft 6% went on to become system operators into Yahoo!Groups? Leo Mercader’s
0 10 20 30 40 50 60 70 80 of the first Philippine Internet eforums.com predated egroups by
Percent (%) Service Providers (ISPs). As for the about a year.

filipinointernetuserevolving 41
 philippineinternetreview

37 to 40
A summary chart • Top Websites
- Yahoo.com
showing our findings 25 to 28 - INQ7.net
on the Internet usage - Google.com
• Top Websites
habits per age group. - CNN.com
- Yahoo.com
Similarities and variations - Google.com - Hotmail.com
are obvious among those - INQ7.net • 68% male, 32% female
in close age ranges. - Hotmail.com • 82% are PC owners
- CNN.com • 45% go online primarily
• 60% male, 40% female from Home
• 78% are PC owners • Pacific Internet is the
• 42% go online primarily preferred ISP
from Work • Spends P573/month
16 and Below • Pacific Internet is the for Internet Access
preferred ISP
• Top Websites • Spends P897/month for
- Yahoo.com Internet Access
- Google.com
- MSN.com 41 to 45
• 42% male, 58% female • Top Websites
• 33% are PC owners - INQ7.net
• 50% go online primarily 29 to 32 - Yahoo.com
at Internet Cafes - CNN.com
• Top Websites
- Yahoo.com - Hotmail.com
- Google.com - MSN.com
- INQ7.net • 63% male, 37% female
• 87% are PC owners
17 to 20 - Yehey.com
• 60% go online primarily
- CNN.com
• Top Websites - Hotmail.com from Work
- Yahoo.com • 63% male, 37% female • Spends P1100/month
- Hotmail.com • 83% are PC owners for Internet Access
- Google.com • 42% go online primarily
- MTVAsia.com from Work
- PinoyCentral.com • Pacific Internet is the
- Yehey.com preferred ISP
• 22% male, 78% female • Spends P1147/month
46 to 55
• 50% are PC owners for Internet Access • Top Websites
• 50% go online primarily - Yahoo.com
from Schools - INQ7.net
- CNN.com
- Google.com
33 to 36 - Hotmail.com
• T op Websites - MSN.com
21 to 24 - Yahoo.com • 58% male, 42% female
- INQ7.net • 80% are PC owners
• Top Websites - Yehey.com • 53% go online primarily
- Yahoo.com - Google.com from Work
- Google.com - Hotmail.com • Pacific Internet is the
- Hotmail.com • 67% male, 33% female preferred ISP
- CNN.com • 86% are PC owners • Spends P1358/month
- INQ7.net • 60% go online primarily from for Internet Access
- MSN.com Work
• 44% male, 56% female • Infocom and Mozcom are
• 68% are PC owners the preferred ISPs
• 34% go online primarily • Spends P782/month for
from Work Internet Access 56 and up
• Pacific Internet is the
• Yahoo.com is the Top Website
preferred ISP
• 83% are PC Owners
• Spends P1250/month
• 50% Access the Internet
for Internet Access
from Work

42 filipinointernetuserevolving
 philippineinternetreview

On its frequently visited sites, Where do Filipinos Buy Online

Yehey.com finally entered our (1999 - 2002)
top 5 list as Hotmail.com stepped Amazon (50%)
down. As far as the local sites are MyAyala (10%)
concerned, it is interesting to note Network Solutions (9%)
eBay.com (8%)
the entry of SunStar publication Barnes and Noble (5%)
in our top 5 list as BusinessWorld Register.com (5%)
Online, DFNN, and PinoyMail.com Others (13%)

slipped. US$513.50 average annual purchase per user

How Much do Filipinos Buy Online?

THE FILIPINO (per year)
ONLINE SHOPPER
Computer Software 400%
• 23% of the Internet Users Outdoor Equipment 325%
Shoes 323.5%
interviewed are online
Music CD 289%
shoppers Video 263%
• 76% Male, 24% Female Computer Hardware 191%
Books 190%
Web hosting 148%
e-learning 145%
Travel 134%
BUYERS’ PROFILE Tickets/Movies 124%
Information Services 97%
• 39% PDA Ownership Apparel 84%
• 83% access the Internet from Gifts 74%
Work Financial Services 73%
• 93% Computer Ownership Domain Names 70%

- 74% access the Internet 0 50 100 150 200 250 300 350 400
from Home Amount in US$
• ISP Subscriptions
– Pacific Internet
– Infocom, Mozcom
- PLDT DSL
- i-Manila Top Filipino Websites (2002)
Percentages are based on the number
of Users who named the sites
Inq7.net 24%
Buyers' Profile
Website

Yehey.com 16%
Online Bankers PinoyCentral 10%
16 and below 0%
17-20 0% ABS-CBN.com 8%
21-24 64% PhilStar.com 5%
25-28 45%
Age Group

0 5 10 15 20 25
29-32 63%
Percent (%)
33-36 45%
37-40 43%
41-45 0%
46-55 14%
56 and up 0% Top 10 Websites (2002)
Percentages are based on the number
0 10 20 30 40 50 60 70 80
of Users who named the sites
Percent (%)
Yahoo.com 69%
Google.com 34%
Inq7.net 24%
Hotmail 22%
Buyers' Profile
Website

Yehey.com 16%
CNN.com 15%
48% do Online Banking MSN.com 14%
BPI (43%) PinoyCentral 10%
UnionBank (15%) ABS-CBN.com 8%
Citibank (13%) Microsoft 6%
Equitable PCI (11%) 0 10 20 30 40 50 60 70 80
HSBC (8%)
Percent (%)
UCPB (3%)
Others

filipinointernetuserevolving 43
 philippineinternetreview

Where do Filipino
Online Buyers Surf?
33 to 36
Popular Local Sites • What do they buy online?
for Online Shoppers – Books
We found more buyers as we • Inq7.net • – computer software,
increased our respondent base • Yehey.com • domain name
in 2002. 23% or 128 of survey • PinoyCentral.com • – Music cd, videos
respondents are online shoppers, • PhilStar.com • • Shopping sites
with 76% being male. It is important • Sunstar.com • – Amazon.com
to note, though, the amount people • ABS-CBN.com – MyAyala.com
spend online. Filipinos buying from – GoDaddy.com
Amazon.com spend an average of • Spends an average of
US$162 per year. US$429 online annually

Admittedly, there are a lot of 21 to 24

figure adjustments as the number
of survey respondents increase. • What do they buy online?
We took a particular interest on – Books
37 to 40
the ranking of ISPs where online – Tickets/Movies • What do they buy online?
buyers are subscribed. In the first – Computer software – Books
issue, Pacific Internet, PLDT DSL, – Information services – Computer hardware
Infocom, Mozcom, and DigitelOne • Where do they buy online? – Computer software
emerged as the top 5 ISPs. For this – Amazon • Shopping sites
update, DigitelOne dropped in the – MyAyala – Amazon.com
top 5 ranking while I-Manila came – eBay – MyAyala.com
stronger. • Spends an average of • Spends an average of
US$397 online annually US$953 a year online.
Our ranking of online shopping
habits didn’t change that much
although figures continue to
change. Since 2002 was still not
over, we could not see whether
25 to 28 41 to 45
or not there was a decline on the
online shopping habits of Filipinos • What do they buy online? • What do they buy online?
for that year. – Books – Books, travel services
– domain name – Domain name
It is important to note the – computer software – Web hosting
amount that people spend for – Music CD, web hosting – Information services
online shopping. The respondents’ • Shopping sites • Shopping sites
combined purchase amounted – Amazon.com – Amazon.com
to US$64,000 from 1999 to the – Network Solutions – Network Solutions
present. – E-Bay • Spends an average of
• Spends an average of US$323 online annually
US$276 online annually.

Where do Filipino
Online Buyers Surf? 46 to 55
29 to 32 • What do they buy online?
• Yahoo.com •
• Google.com • • What do they buy online – Books
– Books – Computer software, travel
• Inq7.net •
– Computer software, services
• CNN.com •
domain name – Apparel, music cd
• Yehey.com • • Shopping sites
– web hosting
– Computer hardware, – Amazon.com
financial services – MyAyala.com
• Shopping sites • Spends an average of
– Amazon.com US$552 online annually
• Spends an average of
US$910 online annually

44 filipinointernetuserevolving
 philippineinternetreview

DigitalFilipino.com in its Filipino Internet Banker

Report also found that only 15% of Internet users
bank online. By end of 2003, it was estimated that
there are 525,000 Internet bankers in the country
but less than half were active users. The male
segment of society leads the early adopters having
a 68% share in the survey and 32% of online
bankers were female.

Most Popular Banks for

Internet Banking by Gender
BPI - 58%
- 58% Most Popular Banks for
Internet Banking
Citibank - 16%
18%
Age Group

BPI - 58%
Unionbank - 6%
- 14% Citibank - 18%

Age Group
Equitable-PCI - 6%
- 6% Unionbank - 11%

HSBC - 3% Equitable-PCI - 9%
- 11%
HSBC - 5%
0 10 20 30 40 50 60
Percent (%) 0 10 20 30 40 50 60
Percent (%)

Internet Connection
at Home by Gender: Total
DigitalFilipino.com
published the Filipino
Internet User Report Part
2 in September 2003.
This report highlighted
that there are more
women (58%) online
Male Female
than men. Additional Telephone Modem - 94% Telephone Modem - 97%
findings as follows: DSL - 5% DSL - 1.4%
Others - 1% Others - 1.6%

Internet Access

The school is the most common access point

Internet Connection
for the majority of respondents. This very at Home: Total
much reflects our population where the young
represents the majority. The penetration of
computers and Internet in the school helped
greatly as well to this development.

Internet Use at home

72% of the respondents have personal

computers at home. Similarly in past surveys,
more male Internet users have computers at Telephone modem 94%
home compared with women users. DSL 5%
Others 1%

filipinointernetuserevolving 45
 philippineinternetreview

Most Common Access Points Internet Online Activities

to Internet Users by Male DSL Users
E-mail 12%
School - 54% Instant messaging 19%
Internet café - 52% News reading 8%
Entertainment information 5%
Home - 46%
Access Points

Shopping 1%
Work - 20% Hobbies 3%
Friends - 12% Travel 1%
Medical 1%

Activity
Library - 5%
Games 6%
Others - 1% Banking 1%
0 10 20 30 40 50 60 Browsing 10%
Chat 1%
Percent (%)
Jobs 2%
Music 20%
School work 2%
Most Common Access Points Work at home 5%
to Internet Users per Gender Sex 2%
Distance learning 1%
School (Male) - 44%
Government website 2%
(Female) - 61%
0 5 10 15 20
Internet café - 50%
Time Spent (Percent %)
- 54%
Home - 56%
Age Group

- 39%
Work - 26% Most Popular Internet
Activities by Gender
- 16%
E-mail (Male) - 84%
Friends - 12% (Female) - 85%
Web surfing or browsing - 60%
- 10% - 55%
Library - 4% Instant messaging - 50%
- 60%
- 6% Accessing entertainment - 44%
information - 50%
Others - 1% Reading news - 50%
- 46%
Activity

- 1% Doing school work - 37%

- 41%
0 10 20 30 40 50 60 70 80 Chat - 34%
Percent (%) - 40%
Games - 37%
- 30%
Music - 33%
25%
Hobbies - 32%
Number of Years Online Total - 20%
by Gender 0 20 40 60 80 100
Percent (%)

Overall Most Popular

Internet Activities
Number of Years Online Total E-mail - 85%

Male Female Web surfing or browsing - 57%

<1 year - 14% <1 year - 14% Instant messaging - 56%
1 to <2 years - 10% 1 to <2 years - 10% Accessing entertainment - 48%
2 to <4 years - 33% 2 to <4 years - 33% information
Reading news - 48%
Activity

4 to <6 years - 27% 4 to <6 years - 27%

6< years - 16% 6< years - 16% Doing school work - 39%
Chat - 38%
Games - 33%
Music - 28%
Hobbies - 25%

Less than one year - 15% 0 20 40 60 80 100

One year to less than two years - 13%
Percent (%)
Two years to less than four years - 33%
Four years to less than six years - 26%
Six or more years - 13%

46 filipinointernetuserevolving
 philippineinternetreview

Use of the Internet:

Use of the Internet: Online Activities: Male
Online Activities: Female E-mail - 32%
- 29%
E-mail - 19% Instant messaging - 22%
- 35% - 20%
Instant messaging - 19% News reading - 1%
- 7%
1 IS RP READY TO HANDLE
- 5%
News reading - 4%
- 3%
Entertainment information - 3%
- 4%
CYBERCASH?
New Users
Entertainment information - 6%
2%
Shopping - 1%
- 1% Very Experienced Users http://www.itmatters.com.ph/
Hobbies - 0%
- 4%
Hobbies - 3%
- 1%
features/features_101299.html
Travel - 0% New Users Travel - 1%
- 1% Very Experienced Users - 0%
Medical - 0% Medical - 3% 2 STUDY SHOWS FILIPINOS ARE

Activity
- 2% - 4%
HIGHLY INCLINED TO USE THE NET
Activity

Games - 2% Games - 3%
- 0% - 1%
Browsing - 10%
5%
Banking - 1% http://www.itmatters.com.ph/news/
- 0%
Chat - 15%
- 30%
Browsing - 17% news_110298a.html
- 5%
Jobs - 1% Chat - 1%
- 0% - 2%
Music - 3%
- 1%
Jobs - 2% 3 h t t p : / / w w w . n c c a . g o v . p h /
- 3%
School work - 13%
- 5%
Music - 3% culture&arts/cularts/others/
- 4%
Work at home - 1%
- 3% Stocks - 0% communication/communication-
- 1%
Distance learning - 2%
- 2% School work - 4% newmedia.htm
Maintain website - 0% - 2%
- 1% Work at home - 0%
- 2%
0 5 10 15 20 25 30 35 Sex - 2% 4 FILIPINOS READY TO TRADE
Percent (%) - 2%
Religious - 1% ONLINE?
- 3%
Distance learning - 1% http://www.itmatters.com.ph/news/
- 1%
Discussion - 2% news_072899a.html
- 3%
Maintain website - 1%
Very experienced users spent the - 5%
5 CITIBANK TO DEBUT FINANCIAL
largest percentage of their time 0 5 10 15 20 25 30 35
Percent (%)
SERVICES PORTAL NEXT WEEK?
dealing with e-mail, chatting, instant http://www.itmatters.com.ph/ news/
messaging, reading news, and news_081899a.html
browsing. New users, on the other
hand, spend a larger part of their
Use of the Internet: 6 RP INTERNET BUSINESS TO
time with e-mail followed by instant
messaging, browsing, chatting, school Online Activities: Total OUTPACE OTHERS, SAYS IDC
work, and reading entertainment E-mail - 24%
AFFILIATE
information. - 32% http://www.itmatters.com.ph/ news/
Instant messaging - 20%
- 14% news_031899a.html
News reading - 3%
Comparing women new users and - 5%
Entertainment information - 5%
very experienced ones shows similar - 3%
New Users
7 h t t p : / / w w w . a m e r i c a n . e d u /
results. Very experienced women Shopping - 0%
- 1% Very Experienced Users carmel/bree/internet.html
Internet users spend a significant Hobbies - 1%
- 2%
percentage of their time using e- Medical - 1%
- 3% 8 PHILCOMSAT TARGETS LEADING
Activity

mail, chatting, instant messaging, Games - 2%

browsing and researching. New users, - 1% INTERNET SERVICE PROVIDERS
Browsing - 13%
on the other hand, spend a big part - 5% http://www.itmatters.com.ph/news/
of their time on e-mail and instant
Chat - 10%
- 15% news_101999d.html
Jobs - 2%
messaging, followed by chatting, - 1%
school work, browsing and accessing Music - 3%
- 3% 9 ASIAWORLD ONLINE PORTAL
entertainment information. Trading stocks - 0%
- 1% TARGETS FILIPINOS OVERSEAS
School work - 10%
- 3% http://www.itmatters.com.ph/news/
Very experienced male Internet Work at home - 1%
- 2% news_090199c.html
users spend majority of their time Auction - 0%
on e-mail, instant messaging, news - 1%

reading, browsing and maintaining

Sex - 1%
- 1% 10 http://www.itmatters.
websites. New users, on the other
Religious - 1%
- 2% com.ph/
hand, spend their time on e-mail Distance learning - 2%
- 1%
indicators/indicators_01272003.html
followed by instant messaging, Discussion - 0%
- 2%
browsing, and school work. Maintain website - 1%
- 3%
11 http://www.itmatters.com.ph/
0 5 10 15 20 25 30 35
indicators/indicators_01272003.html
Percent (%) and http://www.itmatters.com.ph/
indicators/indicators_01242003.html

filipinointernetuserevolving 47
By Miguel Paraz

I
t took a lot of effort, patience,
collaboration, and hard work for the
Internet to become a reality. This
chapter will show you how the Internet
evolved in our country and what to
expect in the years to come.

49
 philippineinternetreview
Ed Castañeda and Dan Angeles set
up the first public access Bulletin Board
System (BBS), called First-FIL RBBS.
This is the conceptual forerunner of
today’s e-mail systems and bulletin
boards.
The Star BBS (run by Efren Tercias
and James Chua of Wordtext
Systems) uses the Fidonet technology
to exchange messages with Fox BBS
(run by Jonathan Sumpio).
Long-distance connections to the
Internet started. Telcos such as Eastern
Telecoms and Philcom offered the X.25
packet switching service. This allowed
a connection to online services such as
Western Union’s Easylink. These services
were terminal-oriented, allowing the
local user to access the foreign system
through a remote text-based log-in.
Multinational organizations such as
Motorola, Intel, and Texas Instruments
had early TCP/IP connectivity through
their head offices. Jim Ayson recalls,
“we at the Asian Development Bank
connected through BIX and Compuserve,
which we accessed through the Bank’s
dedicated X.25 connection to Hong Kong.
So yes, we were telnetting and ftp’ing
and Usenetting and e-mailing around
1992-93.” Since these connections were
not direct, they were hard to use and
primitive by today’s standards. 1
Jim Ayson is one of the country’s first Internet
advocates, promoting Internet literacy through
his discussion forums, talks, and website.
50 internetinfrastructuredevelopment
Fidonet Philippines, the Bulletin Board
System (BBS) network, allows e-mail
connections using its Netmail private
message format. When it started, it
made use of the free international calls
through the US bases. When this was no
longer available when the bases’ shut
down, it shifted to taking incoming calls
from the US, and then to dialing out
to Taiwan. The Philippine network was
interconnected with the global Fidonet
network of enthusiasts, allowing mail
to be sent to local addresses using a
special non-Internet address.
Obet Verzola set up E-Mail Center,
using the domain phil.gn.apc.org.
His system dialed long-distance to
GreenNet in the UK. 2
As early as February 1991, De La Salle
University (DLSU) signed up with the
E-mail Company for dial-up access for
e-mail. Kelsey Hartigan–Go, then a
faculty member, estimated the cost at
P15 per kilobyte per message. 3
The Far Eastern Broadcast Company
offers e-mail on a donation basis. Its
local users needed an email connection
to their US headquarters. This was
implemented using a Fidonet link and
Netmail, using their FEBnet BBS System.
The donation scheme was to help offset
the cost since the company could not
officially charge for this service. External
users who donate were piggybacking on
the long distance connection. 4
: BBSes were a hotbed for
the tech community. For me, the most
significant programmer discussion
was at the FEBnet BBS. Jonathan
Marsden is also instrumental in
bringing Linux to the Philippines,
spreading it to early adopters Eric
Pareja and Dr. Pablo Manalastas.
On the Fidonet network, Internet
discussions were spurred by the
RP-INTERNET echo (a forum that
was distributed across all member
networks). Jim Ayson moderated
RP-Internet.
 philippineinternetreview

Mosaic Communications (Moscom, Commercial Internet Service Providers

also known as Mozcom) operates as a
commercial service provider offering
a live IP connection. It gets its first
connection from Phnet, and later
established its own connections directly
to the US and other foreign countries.
RP-INTERNET forum participants
discussed putting up an Internet
Cooperative, subscribing to PHnet
facilities. The idea was to split the costs
equally among individual members.
This did not materialize, partly because
the overhead made it more feasible
for the participants to obtain their own
individual commercial connections.
begin operations. These include: G-
Net from Globe Telecoms, IBM Global
Network, IPhil Communications, and
SequelNet (Sequel Concepts and
Infocom). The Industrial Research
Foundation, the caretaker of PHnet,
also offered public accounts. During
this time, “shell” accounts which offered
Unix access were still offered, since they
consumed less bandwidth than full TCP/
IP PPP accounts. However, these were
eventually phased out due to security
issues and lack of interest.
Cybernet Live, Virtual Asia, and
Extra Mile Online followed the “online
services” model. They offered dialup
services and a closed community similar
to BBS technology, with the Internet as
a bonus.

Competition between the providers

started to drive down the price of access.
By November 1995, there were 18
local ISP’s. Some of these bought their
connection from other local providers,
which in turn had a direct international
link to a foreign ISP. 5

PHnet’s growth is hindered by a number

of factors, including the lack of know-
how, telephone lines, and funding. Some
of these are by-products of PHnet’s
roots as a research and educational
network. Nevertheless, it was able
to achieve its targets to connect its
members and educate administrators
and users. It served as an incubator for
its members’ forays into the Internet,
until the time when it became more
practical for them to establish their own
commercial connections. 6

Republic Act 7925, the Omnibus Telecommunications Act, legalized

the operations of Value-Added Service (VAS) providers such as
ISPs. VAS providers are required to subscribe to a franchised
telco’s facilities but do not need their own congressional franchise.
Prior to this, the ISPs operated under a legal gray area since they
were providing commuication services to the public without the
legal prerequisites. VAS providers are required to register with
NTC, but this is only a strict requirement when the provider wishes
to offer service to a government agency.

This law would later be invoked by ISP’s to justify the legalization

of Voice Over IP technology and complain about unfair competition
from telcos in offering Internet services. 7

internetinfrastructuredevelopment 51
 philippineinternetreview
PLDT puts up the first peering
point in the country, the Philippine
Internet Exchange. (PhIX). The first
members were Infocom, IPhil, Mosaic
Communications, Worldtel Philippines
and V-Link. This allows the participants
to exchange traffic through a local
facility. Without peering, sending the
packets out of the country is inefficient
since they have to cross through
international lines twice. At that time,
many of these lines were congested.
Providers introduced prepaid access
through cards. This changed the
consumer market, eventually making it
the dominant mode of dial-up access.
Among the first providers were Manila
Online and Webscape (later I-Next).
Local network engineers discussed the
Philippine Network Information Center
(PH-NIC) as a potential manager of
local network resources such as IP
addresses. Handling the .PH top level
domain was also considered. The group
was never formed.
PLDT assisted the NGO community by
putting up CODE-WAN (Countrywide
Development-Wide Area Network).
52 internetinfrastructuredevelopment
Preparations for the Y2K “Millenium
Bug” occupied IT companies. ISPs
and telcos were included in the
contingency plans, since they provided
vital infrastructure to companies which
needed Y2K assurance. PLDT’s phone
metering proposal, also known as local
measured service, becomes prominent.
It has been an issue since the mid-
90s. PLDT claimed that it required rate
rebalancing to stop the subsidy of the
local phone service by international
toll charges. In 1998, this gave rise to
the Philippine League for Democratic
Telecommunications (PLDTI). This is
also led to the domain dispute case
between PLDT and Gerry Kaimo, who
registered the domain name PLDT.COM
and used it for satire. PLDT eventually
shelved the metering proposal, but the
dispute over PLDT.COM continues until
today.
Edsamail starts its dial-up e-mail
service. At the time, it was free for
subscribers to use, supported by
advertisements displayed on the e-
mail client. It receives funding from
the Ayala and Yuchengco groups,
and Singapore-based New Era. The
technology is developed by Evoserve,
an ISP and solutions provider. 8
The Philippines becomes prominent in
the global Internet as the source of the
Love Bug virus, allegedly written by
Onel de Guzman. The Love Bug shuts
down systems worldwide, causing an
estimated US$8-10 Billion in damages.
This was one of the motivations behind
the E-Commerce Law. 9
Senator Vicente “Tito” Sotto III
proposes a Service Area Scheme to
require ISP’s to offer service to rural
areas with high demand for broadband.
This echoed the Service Area Scheme
regulation that requires cellular and
international phone operators to operate
land lines. ISP operators opposed this
since they showed that they lacked
the capital to establish operations in
unprofitable areas. 10

The independent (non-telco) ISPs
struggle as telco services enter their
space. PLDT’s residential DSL (Digital
Subscriber Line broadband service) is
highlighted by the industry as a symptom
of unfair telco competition. The rates
for DSL service were artificially low and
subsidized by the telco, compared to
the wholesale dial-up rates offered to
ISPs. The PISO position declares that
the Republic Act 7925 requires the
Internet services of telcos to compete
with the ISPs on an equal footing. 11
: subscription fees. This is met with an
One of the ISP owners I interviewed
says that “there was a collective
wringing of fingers in the industry”
this year.
Chikka launches instant messenger
service for sending SMS from PC’s. This
is useful for overseas Filipinos sending
messages from countries with easier
access to PC’s and the Internet. It also
shows the predominance of SMS over
Internet in the Philippines, mainly due
to the availability of service and low
price of equipment (handsets versus
computers.)
philippineinternetreview
PLDT launches its dial-up service called
“Vibe.” It has the option to charge
the service to the monthly phone bill.
PISO complains about more unfair
competition and demands access to
the dial-up infrastructure, such that
customers can gain access to their ISP’s
through PLDT facilities. 12
Edsamail switches to a fee-based
model. General Manager Margarita
Torres cites “changes in the Internet
and financial world” that require this.
Existing users were required to pay
uproar from users who were relying on
a free service. 13
Mobile phone company Globe Telecoms
offers mobile corporate e-mail using
GPRS, while Smart partners with
hardware manufacturer Research
In Motion (“RIM”). These allow PC-
based e-mail to integrate with mobile
communications, catering to the needs
of executives on the move. This also
reflects the fact that users upgrade
their cellphones more frequently than
their computers. 14
Intel and GlobeQuest (Globe Telecom’s
Internet arm) announce that GlobeQuest
has passed Intel’s Wireless Verification
Program. This program ties up with
Intel’s promotion of its “Centrino”
wireless-enabled laptops for use with
GlobeQuest’s hotspots in commercial
areas. 15
Infocom launches DSAT satellite access
for broadband services outside of
wired DSL and cable service areas. It
partnered with Mabuhay Satellite for
the coverage and GV Broadcast for the
uplink services from the ground up.
This expands the PLDT group’s reach
beyond the wired Internet. 17
Photo Blogging makes use of cameras
on MMS (Multimedia Messaging Service)
cellular phones to send pictures to
websites such as blogs.
internetinfrastructuredevelopment 53
 philippineinternetreview

Infocom Technologies started in 1995 as

the local company of Sequel Concepts, a US
company which operated the Sequelnet service
from 1995 to 1996. In 1996, PLDT bought into
Infocom and renamed the service. Because
of the acquisition, PLDT easily acquired dial-
up phone and leased lines. It also delivered
services through cable TV (through Home
Cable) and satellite (through “DSAT” with
Mabuhay Satellite and GV Broadcasting).

Mosaic Communications (MosCom) started in

1994 when PHnet contracted Computer Network
Systems (COMnet) to build its infrastructure. It
started with a share of the international line, and
established its own independent connections
later. The company franchised out its ISP
connections to companies around the country,
giving them a wide nationwide reach. MosCom
offers DSL services by renting telco capacity. It
has an affiliated hosting and managed services
company, ModNet.

IPhil Communications started in 1995 as a

consulting firm and a provider of corporate
Internet services. It did not sell to end-users.
Instead sold bandwidth and consulting services
to end-user ISPs which ventured intop the
business.

Webquest was launched in June 1996 as a

partnership between the Philippine Global
Communications (Philcom) and the Webscape
group. This group established the I-Next
service. It underwent expansion in 1997. IPhil
and I-Next were acquired by “Internet Super
Carrier” PSINet in 2000 and merged their
operations. PSINet formed a new company
for its global consumer operations, Inter.net.
The Philippine company was moved to Inter.
net in 2001. Inter.net acquired the subscriber
bases of various ISP’s to boost its customer
base.
Pacific Internet is an Asia-wide ISP based in
Singapore. In 1997, it partnered with Primeworld
Digital Systems, to operate Pacific Internet
Philippines. It started operations with 56K dial-
up modems, which were new at the time. It
offers DSL in partnership with Globequest.
Almost all IP traffic today (2004) passes through
IP services operated by the telcos. The telcos
connect to the IP “port” or router operated by
foreign IP providers—telco or ISP. This has not
always been the case. The local Internet started
with non-telco ISPs leasing the lines from the
US, and managing the connectionn with the
foreign ISP. Now, almost all ISPs either buy
bandwidth from the ISP’s over leased lines or
collocation, or rent modem ports where dial-up
subscribers may dial in.
Globe Telecoms was the first telco to set up
an Internet business. It started a corporate-
oriented service in 1996, with a 64 Kbps link to
Singapore Telecom, its affiliate. It later operated
the “GIX” or Globe Internet Exchange, for

54 internetinfrastructuredevelopment

wholesale Internet connectivity; DSL services,
dialup for landline subscribers, wireless (WiFi)
access points and a hosting data center.
While PLDT entered the Internet business
through Infocom, the services were not under
the PLDT name. PLDT-branded services began
in 2000 with I-Gate, a wholesale Internet
access service sold to companies and other
ISPs. In 2001, it started residential and
corporate DSL service. In 2002, it expanded
its reach to the dialup sector by offering the
Quarter One, 1995
• Jose Picache joined Sequel Concepts, Inc. (South
Plainfield, NJ, USA) and became the sponsor of the
Internet project.
February, 1995
• Sequel Concepts, Inc. initiated the plan to provide
Internet service in the Philippines as soon as it
realized the potential business opportunities
of the new technology. The company leveraged
previous investments in trans-pacific E1 line and
telecommunication equipment.
Julius Gorospe was appointed to head the project.
He immediately registered the sequel.net domain
in behalf of Sequel Concepts, Inc. Together with
Rey Alonzo (the network’s first network engineer),
the team started research and development with
the goal of developing the blueprint for Sequel’s
network.
• Joel Maloff (a prominent figure in the US online
industry) was hired by Sequel to consult for the
project. Mr. Maloff, together with Phil Balevre,
provided insights about the Internet industry and
business models of online industries in the US.
April, 1995
• After completing research and development work
in New Jersey, Julius Gorospe arrived in Manila in
late April to start building the network.
• Infocom was a Philippine subsidiary of Sequel
Concepts, Inc. Inder the Infocom name, sequel.
net was introduced to the market.
• Engineers, mostly from NEC Cebu, were hired. Unix
system administrators with sufficient networking
background were in scarce supply in Manila during
this period. Nazario Parsacala was appointed to
head the network operations team.
July, 1995
• In July 8, 1995, sequel.net was launched and the
network became accessible to customers.
• Soon after the dial-up business started, technical
development efforts shifted to the corporate
leased-line segment of the network.
• Infocom’s presence in many regions of the Philippines
sprouted quickly.
August, 1995
• The company’s revenue soared and hit the PhP1M mark.
• Julie Figueroa, Manny Aldana, Julius Gorospe, Boyet
Picache attended a meeting with senior officials
in Malacanang to showcase the Internet and its
potentials.
• The Malacañang website was created and placed online
by the Infocom team. The upkeep of the site was
subsequently turned over to the President’s staff.
• Through a speech about the Internet that was delivered
by Julius Gorospe, President Fidel Ramos introduced
philippineinternetreview
Vibe dial-up service for phone subscribers and
prepaid users. PLDT also set up a general-
purpose IT subsidiary, ePLDT. This company
operates physical infrastructure: the Vitro
data center; and security infrastructure:
the MySecureSign digital security service.
It started its wireless access point business
as “Blink,” and then acquired Airborne
Access, another WiFi company. It operates
the first Internet exchange, the PhIX. ePLDT
also has investments in Netopia Computer
Technologies.
by Julius Gorospe
the Internet to the public in
Sampaloc.
• The Infocom also created
and posted websites of the
Philippine Embassy and its
Consulates in the US.
• The team introduced the
Internet to the office of
Richard Gordon. The Subic
Bay Free Port website
was created and launched
online.
Quarter One, 1996
• Through a partnership with Mecklermedia, planning
for the Internet World show started. Ernie Agtarap,
was hired to create the Internet World website.
• PLDT signaled its interest in acquiring Infocom.
• Infocom was burdened with technical issues during
that time. There was a clear need to expand the
company’s resources to ensure delivery of quality
service to customers. i
Infocom’s Contribution to
the Local Internet Industry
• Targeting early-adopters and policy-makers to use
the Internet was key in the successful diffusion of
Internet locally.
• The high E1-bandwidth made a big difference. Early
providers were able to deliver Internet access but
the limited bandwidth that they offered proved to
be counter-productive.
Subsequently, market forces gave birth to new
products and competitive pricing models.
• The network model, 24x7 operation center and
customer support structure, that Mr. Julius
Gorospe developed for Infocom were replicated
by partner ISPs and became a standard model for
many ISPs in the country. Serious players in the
industry were forced to provide the same level of
service to stay competitive.
• The proliferation of partner ISPs in different regions
can be attributed to the “cloning strategy” that
Ms. Julie Figueroa implemented. Infocom regional
partners were allowed to copy and replicate the
Infocom organization, network, support and sales
structures.
Mr. Julius Gorospe was the project manager and
technical lead responsible for building and bringing
to market the Infocom Internet network to the
Philippines.
internetinfrastructuredevelopment 55
 philippineinternetreview
Eastern Telecoms started its Internet operation
as the local node of its former parent company,
Cable & Wireless. It later became independent
with its own infrastructure. For broadband, aside
from DSL, it operates Gigabit Ethernet systems
for “wired buildings.” It operates the “Internet
Direct Service” for wholesale Internet, hosting
services, and a Virtual ISP.
Digital Telecommunications Philippines
(Digitel) is known for covering Luzon with
landline services. It was the first to offer dialup
Internet to its Luzon landline subscribers
in 1999. It partnered with Global Crossing
to establish Digitel Crossing. When Global
Crossing went bankrupt, the Asian part of the
network was sold to Asia Netcom, a Chinese
telco. Asia Netcom maintains a local node.
The Lopez group, through the Sky Cable
company, operates SKY Internet since 1996,
and offers cable Internet under the ZPDee
brand in 2000. Another company, Bayantel,
operates United Network Access (UNA)
which was merged with Sky. Today, Bayantel
offers DSL service and dial-up for landline
subscribers. Bayantel offers wholesale IP
transit service in partnership with Teleglobe,
a Canadian telco. Bayantel hosts the local
node for Teleglobe.
56 internetinfrastructuredevelopment
Cable TV operator Destiny Cable was the first
to operate a broadband service on a large
scale. Since it is not a telco, it has to purchase
capacity from carriers.
BBS/Online Services
The Bulletin Board Systems (BBSes), and the
online systems that followed them, are based on
dial-up systems. The original BBS typically had
only one phone line, thus only one caller may
log on at a time. Thus, messages posted to the
“board” are read only after the caller logs off. To
promote efficient use, BBS systems made use
of offline mail readers, similar to today’s POP
mail. With these, users could download their
mail and forum messages, disconnect, write
replies, and then upload them. BBS formed
networks so members can exchange messages
amongst each other. This way, users need not
log on to the same PC to receive messages.
BBS systems also offered files, online games
and utilities.
Gateways are used to transfer messages from
BBS technology to the Internet. They either
connected to “live” networks over TCP/IP,
or dialed up using UUCP (Unix to Unix Copy
Protocol). UUCP was used to transfer messages
between the Unix machines that were the
backbone of the dial-up messaging system
that predated the availability of live IP. In
the early days of the Philippine Internet, vital
communication between the small core of
Internet users and the rest of the world, was
done through these gateways.
Dial-up and Leased Line
Dial-up modem technology converts digital
signals into the audio that may be transmitted
over phone lines. The original modems ran up
to 33.6 Kbps, the limit of analog lines. In places
where the phone lines are noisy, this rate may
not be achieved. In 1997, lines with digital
signal (E1R2) were provided by the telcos. On
the ISP side, the call is handled by a device
called a Remote Access Server (RAS) that
takes in leased lines. Each leased line carries
30 phone lines.
The transition to telco outsourced dial-up
changes the technology a bit. In a completely
outsourced solution, the IP addresses assigned
to the customers belong to the telco’s IP
service. The Internet bandwidth for these calls

is provided by the telco. Another option is to
tunnel the call to the ISP, and the ISP provides
the Internet bandwidth. This option is also
useful for outsourced dial-up for non-ISPs,
such as corporate networks. With this option,
a leased line or similar connection is needed to
carry the traffic.
Prepaid services make use of database systems
which contain usernames and IDs. These
systems communicate with the RAS to accept
or deny users. Leased lines make use of copper
wire dedicated for a data channel, from 64 Kbps
to E1 (2 Megabits per second). The line could
be hauled through other media such as fiber or
radio for segments of the trip. Traditionally, a
corporate user would order a line going to an
ISP, then the ISP would deliver the bandwidth
coming in. With telcos acting as the ISP, both
the IP service and the physical connection would
come from the same company, but the service
is still known as a “leased line to the Internet.”
Broadband
Philippine broadband includes cable Internet,
DSL, WiFi, fixed wireless, and satellite systems.
Cable Internet had limited
deployment in 1998. with
Newgen IT offering the service
over Home Cable facilities.
Home Cable later tied up with Infocom when it
was acquired by PLDT. Destiny Cable and Sky
Cable (as ZPDee) offered service in various areas,
concentrating on high-income or high-density
residential locations. These used the DOCSIS
(Data Over Cable Service Interface Specification)
standard.
The first DSL deployment was by MosCom Baguio
in 1999 using the copper wires of Piltel. DSL
became commercially known with PLDT’s entry
in 2001. Globe, Eastern, Digitel and Bayantel
followed. DSL service may only be offered by
the owner of the physical copper wire,
though the telco has the option to
resell the service to other ISPs.
philippineinternetreview
WiFi became prominent in 2003 with the increased
deployment of the IEEE 802.11x standard.
The WiFi deployments of PLDT and Globe are
limited to indoor “hot spots” for mobile users
with laptops or PDAs. While WiFi technology
may be used to build outdoor networks, this has
yet to happen. This issue concerns challenged
the National Telecommunications Commission
(NTC) which is hard pressed to adapt the old
laws to new developments. For a long time,
WiFi and related use of the radio spectrum
was limited by the license of Manila Electric
Company (Meralco) for the 2.4 Ghz frequency
for internal use.
Fixed wireless is a technology used by carriers
that own spectrum capacity and lease it to fixed
users with antennas (not mobile users like Wifi
or cellular). Providers in this space include
Broadband Philippines and Meridian Telecoms.
Satellite technology has been prominent since
the early days of the Internet since it offered
a way to bypass the international submarine
cables. Back when there was limited and
expensive international capacity, satellites
offered the ability to transmit from the US
or other foreign countries to the Philippines
at a cheaper rate. The return path was
through cable. For instance, a company could
subscribe to a 256 Kbps satellite channel,
but lease only a 64 Kbps circuit going back
to the US. This was possible because of the
inherent asymmetry of Philippine Internet
traffic – the data going out of the country is
only a fraction of the data coming in due to
the predominance of web content.
Many ISPs made use of satellite at one point
or another. OneVirtual was one provider that
relied exclusively on two-way satellite.
Satellite for personal use was not as widespread.
Among the providers in this space were Zaksat
(distributed by the Philworld Online ISP which
started 1998), Dream VSAT (of the Dream
Broadcasting Network, a direct-to-home TV
service) and Infocom’s DSAT (with Mabuhay
Satellite and GV Broadcasting). 18
The 2002 launching of PREGINET, the
Philippine Research, Education and Government
Information Network, by DOST ASTI (Advanced
Science and Technology Institute) brought
research and education back to the forefront of
Internet development. The PREGINET nationwide
broadband network enables collaboration in
Internet-oriented research. The official site is at
http://preginet.asti.dost.gov.ph.
internetinfrastructuredevelopment 57
 philippineinternetreview
IP Routing
Three Internet exchanges (IX) were set up:
PLDT’s PhIX, PHnet’s Common Routing Exchange
(CORE, or “Come On Route Everybody”), and
Eastern Telecoms’ Manila IX (MIX). These allow
Internet traffic to be exchanged locally. They
made use of a local access network (LAN) where
participants “park” their routers, and handle their
leased lines. However, few ISP’s connected to
all three, and some did not connect at all. The
“Philippine Internet” that could survive the failure
of US networks did not happen.
For international connectivity, the dominant
carriers were MCI’s UUNET, AT&T, Teleglobe and
Cable & Wireless. Sprint and its affiliate, Global
One, had an early lead in delivering IP services
to the Philippines, but it eventually declined.
For satellite connectivity, Interpacket, Loral
Cyberstar and Panamsat were used. Connections
to other Asian countries were made to Hong
Kong (Pacific Century Cyberworks/Hong Kong
Telecom), Taiwan (Asia Netcom), Japan (KDD),
and Singapore (Singapore Telecom).
Today, there is a large amount of international
bandwidth available, though no figures are
publicly released. Based on experience, there is a
lot of unused outgoing bandwidth which may be
used for hosting services such as outsourcing.
Mobile Phones
Before cellphones came in, beepers were
enabled for very short message transmission.
The popularity of mobile phones and SMS
tied up with the Internet. The mobile carriers
developed gateways between SMS and
email systems for short e-mail messages.
In 1999, when local SMS was still free, local
companies set up unauthorized Internet to
SMS gateways that were eventually
shut down.
Sites for sending free SMS became
popular, to bypass the SMS tariffs.
Longer messages were first carried
by dial-up WAP (the first generation
of WAP), and later over GPRS. The
current testing of higher bandwidth
EDGE technology, leading to “3G,”
will show greater integration between
mobile devices and the Internet.
This is complemented by the move
towards smartphones and PDAs with
communication capabilities.
58 internetinfrastructuredevelopment
Voice over IP
Voice over IP (VoIP) emerged from the Voice
over Internet services that were developed
around 1995. It started with PC-to-PC calls
where both callers need to be Internet-
connected. The technology became interesting
as a means of bypassing the relatively expensive
International Direct Dialing rates (IDD). The
free long-distance calls offered by Dialpad.com
became popular. Operators called International
Simple Resale (ISR) operators made use of
VoIP hardware to squeeze in more calls in a
data leased line, and in some cases, Internet
lines. Some of these were illegal operations.
Mainstream telcos adopted the technology and
made use of it to maximize their international
capacity.
VoIP became a point of contention between
telcos and their corporate subscribers since
the latter could resell those services. ISP’s
have been interested in getting legal access
to the technology as a value-added service,
while franchised telcos complain about losses
in revenue and the need to protect their
investment in fixed-line infrastructure.
A new business is emerging where VoIP traffic
is controlled by companies who handle the
switching but are not collocated with the VoIP
switches. One application for this is prepaid
calling services. The call center industry also
makes use of VoIP. 19
Data Centers
The dotcom boom led to a growth in content
and applications that demanded server space.
Data centers became commonplace in the US,
and replaced ad-hoc server parking. Companies
established their own capital-intensive
infrastructure for Philippine operations, circa
2000. These include the Ayala group’s Ayalaport,
PLDT’s Vitro, Mod.Net, and Reach (a venture
between Pacific Century Cyberworks/Hong Kong
Telecom and Telstra, the Australian national
carrier). The data centers were the platform
for value-added and managed services, and
enhanced traditional services such as e-mail
and web hosting.
Portals
Portals became the rage when foreign portals/
search engines such as Yahoo! came in. The
local portals were based on webpage technology
that allowed dynamic and personalized content,
as opposed to plain static pages. Portals were

descended from the search engine, which
became popular when users needed to find
their way around the Internet. The dot com
boom made portals valuable as aggregators of
content.
Yehey! started in 1997 as a search engine and
later acquired more features.
Foreign portals didn’t make headway in the
Philippines, even if Lycos made an announcement
and Yahoo! was rumored to be coming in. In
2003, Microsoft Network (MSN) announced it
was putting up a local portal with PLDT. 20
Chat
Pinoy chat started in Internet Relay Chat (IRC),
which makes use of servers linked together to
distribute the load. In the early days of PHnet,
users made use of the Unix “talk” command
when logged into multiuser Unix systems. Now,
numerous channels or “chat rooms” exist for
mass conversation.
Person-to-person chat is typically done using
instant messengers. These messengers route
all messages through central servers in the US,
which was once an issue back when international
connectivity was scarce.
File Sharing
The popularity of Napster and other file sharing
protocols got Pinoys interested. The relative lack
of broadband connectivity didn’t make this very
popular, and the lack of local peering didn’t let
local users share among each other. Instead,
they shared with the rest of the world.
Content Delivery
The Akamai Content Delivery Network (CDN)
system partnered with local providers who
had sufficient traffic and customer bases. This
system acts as an automatic mirror for its
philippineinternetreview
customers, by making copies close to the end-
user. This reduces load on international lines,
and cuts down the waiting time for surfers.
I think the most important growth in the local
Internet in the years to come will be with the
local loop. Today’s abundance in bandwidth
needs to be delivered to end users to be
viable. This is where technologies like Wimax
are needed for the metro areas. (Bitstop is
doing that today with 802.11 in less densely
populated areas such as Dagupan City.)
The cellular companies’ move to “3G” is less
feasible since it requires a forklift upgrade of
their infrastructure.
Economies of scale make handheld devices
such as cellular phones affordable to the
masses. Thus they could very well be the
usage driver. PC’s don’t get cheaper, they just
get more powerful for the same price. This is
the result of the massive capital investment in
chip fabrication plants, and R&D efforts, among
others. I don’t think PD’s are becoming the
mainstream, despite the onslaught of the tech
magazines that show them off.
I doubt if the traditional telcos will install more
wireline DSL coverage. I think they can’t afford
to put the DSLAMs (DSL access multiplexers
or switches) out in the open since those are
expensive pieces of equipment.
The local collocation and infrastructure
companies aren’t competitive with US hosting
services that offer innovations such as virtual
Linux boxes. I don’t see any improvement there,
using up the return path from the Philippines
for outgoing traffic.
Instead, Voice over IP traffic will balance
the path. VoIP traffic is symmetric in nature,
since conversations flow both ways. If VoIP is
deregulated to the VAS (value-added service
providers such as ISPs) level - a hot topic at the
moment - then we can have greater amount
of return traffic. I can’t speak for the telcos,
of course, but from an IP efficiency standpoint
this is a good thing, since fiber optic submarine
cables have equal capacity going in and out of
the country. (A few years ago, satellite usage
was more common, but it seems that their
application has dwindled down, especially now
with the glut of fiber optic cable).
internetinfrastructuredevelopment 59
 philippineinternetreview
By Janette Toral
We estimate that there are 115 ISPs in the country
today, with a total post-paid dial-up subscriber
base of 250,000. From such figure, revenues can
range from 270 to 300 million per annum. In the
case of ISPs that have franchises or branches in
different parts of the country, each independently-
owned location was considered as one ISP.
Although prepaid Internet cards became popular
in the country, this is mostly available in urban
areas. We estimate that only 24% of ISPs currently
offer such service. Please note that several ISPs
came up with multiple brands of Internet cards
in the market. Therefore, we can’t consider one
Internet card brand belonging to one company
alone. There are also co-branded cards in the
market.
A few years ago, the country has nearly 200 ISPs.
For the past three years, there’s a gradual attrition
that sparked concern in its community.
In our 2002 surveys, 26% of the post-paid home
Internet users and 8% of prepaid are subscribed
to telecommunication providers’ Internet service.
As far as the corporate market is concern, 35%
are using carrier provided Internet service as
of year-end 2002. Definitely, carriers providing
Internet service is growing in terms of capturing
market share.
The primary service being offered by ISPs are dial-
up Internet connection and web hosting. Other
forms of service are also provided but driven by
resources and market demand.
A typical Internet service provider in the province
has 280 dial-up account subscribers. In Metro
Manila, the number of dial-up subscriber ranges
from 400 to 50,000 in any given ISP depending
on which tier they belong to.
1. Dial-up Internet
2. Website hosting
3. Dedicated dial-up
4. Prepaid Internet access
5. Leased line connection
6. Domain name hosting
60 internetinfrastructuredevelopment
Sources of revenue
The primary source of revenue for any ISP is its
dial-up Internet service. On the average, 53% of
an ISPs’ income comes from this. Those offering
prepaid Internet attribute 34% of gross revenue
to this service.
Web hosting is a service that is offered by all
ISPs. However, it is hardly a revenue generator.
Only ISPs which are also into web development
services tend to get prospective clients for this
service.
Work opportunities
A typical ISP in the province has 10 employees and
maintains one to two part-time staff members.
Hardly is there work opportunity available among
those whom we interviewed. The bigger ISPs have
40 to 80 full-time staff members on board.
Competitive advantage
Respondents claim the following reasons why
clients still approach them for their Internet
needs:
1. Technical excellence. When Tridel started,
it focused its core competence of building and
offering technical excellence. This in turn has
created a loyal following, which has served as
a solid foundation for the company’s steady
growth.
2. Longevity. An ISP respondent from Iloilo City
said that being in the business long enough
made consumers trust them more for their
Internet needs.
3. Quality service. For Westlink Batangas,
loyal personnel, and management leadership
produce good products and services for its
clients.
There are still corporate and consumer clients
who prefer having close ties with their ISP. An ISP
in Metro Manila offering personalized service by
well-trained personnel claims this as an important
advantage.
For OrmocNet, company staff members are given
incentives to consistently provide quality service
to clients.
Vigilant network monitoring is consistently
performed by an ISP respondent in Dagupan City,
to ensure consistency in the service being offered
and drive undesirable elements away.
Poor government support
All respondents interviewed gave a poor rating on
government support. It emphasized that there’s

no effort from the government to help ISPs in
its present predicament. Here are some of the
concerns given by participants and believe that
government should address:
Lack of incentives. There are no incentives
for the industry or any protection from the
telecom providers now entering the Internet
service field.
No ratings and standards. There are no
standards for services, hence, many low quality
service providers are killing the better quality
providers. There should be an ISP standard
rating. This standard rating should include
average speed and ease of connection.
False advertisement. There should be
truth in advertising. Some ISPs are selling
their prepaid services claiming that their
PhP100 cards are worth 16 hours when in fact,
it is only 6 hours. Also, some are claiming fast
Internet access and end up having poor and
unreliable Internet connection.
There’s no law against monopolistic
practices. The lack of protection does not give
ISPs the level playing field they need to grow,
sustain, and survive in these hard times.
Better enforcement of the E-commerce
Law. The slow adoption of various government
offices regarding the Internet/e-commerce
mandate of the E-Commerce Law is affecting
possible growth and adoption in the
countryside.
Telecommunication and bandwidth
infrastructure
63% of ISPs feel that the current bandwidth
and telecommunication services still have a lot
of concerns that need to be addressed. These
include:
Carrier interconnection. There are still
problems with the interconnections among
carrier providers. It is still hard to connect to
non-PLDT phones from PLDT phones. Since
PLDT serves 70% of all telecommunication
users, this is a real concern.
Service reliability. Carrier or bandwidth
provider downtime is prevalent and support
is poor. Problems take days to solve. Also,
there’s no refund or incentive provided to
ISPs, corporate users, and end-user clients to
compensate for these downtime.
Oversupply of bandwidth. 25% of
respondents feel that there is overcapacity in
infrastructure today. The cost of getting and
maintaining it though is still prohibitive based
on competitive market prices today.
Telephone penetration in the provinces
has increased but expensive. There is a
wide digital divide between rural and urban
areas. In the case of telephone access in rural
households, phone metering is implemented
making Internet access a luxury for those who
cannot afford it. Sad to say, Internet users in
philippineinternetreview
the rural area pay more than those in urban
areas.
Long-term survival challenges
There are several challenges that ISPs, big or
small, have to deal with in order to survive. These
include:
Look into new opportunities. ISPs should
evolve into more professional organizations
with keen focus on the financials and an
outlook for more opportunities. It has to adapt
to changes in current industry environment as
well as client’s needs. ISPs have to offer varied
services, high tech products, and services
shifting its major source of income from dial-
up Internet connection subscription to new
forms of services.
Unfair competition. ISPs that offered
Internet access to the Filipino community stress
unfair competition from carriers. Although it is
easier to get a leased line nowadays, ISPs—
price wise—can’t be competitive versus carriers
offering Internet access services directly to
consumers and corporations. Despite appeals
to government policy makers, concrete action
still remains to be seen. This is a concern that
is killing small entrepreneurs, particularly in
the rural areas.
Expensive and unreliable power supply.
In rural areas, it is still considered normal to
experience daily power outages. For ISPs,
maintaining back-up power resource is an
add-on cost that is not helping the business.
Note as well that power rates in the provinces
are higher than in urban areas. If addressed,
savings can be passed on as higher pay to
personnel and expansion of services.
Post-paid accounts have tons of bad
debts. If all receivables are claimed then
small ISPs will earn and have enough money
to upgrade their equipment. People are not
afraid when they don’t pay their debts since
they know businesses don’t want to go into the
hassle of taking them to court if the debt is not
in the thousands. So businesses are the ones
afraid of abusive subscribers.
Extinction of small Internet service
providers
In a year or two, more small and independent ISPs
will close doors because they cannot compete. In
the provinces, ISPs don’t have the pricing power
and the corporate base to sell their service. Their
cost is higher since ISPs have to pay for the leased
line to Manila.
Selling to consumers is not as profitable as it used
to be since buyers go for the lowest price no matter
how good or bad a service is. Marketing prepaid
Internet access card is not a viable option either
as hardly any reliable and consistent revenue can
be derived from it.
internetinfrastructuredevelopment 61
 philippineinternetreview

Despite advancement in technology, ISPs will still

have to rely on dial-up subscription sales. Schools
and local offices are still contented with dial-up
Internet connection. They are not eager in taking
advantage of networking technology that would Indicator/Year
entail investment.
A. International bandwidth (BW)
Although there’s higher margin for high-speed
Internet, there’s little demand in rural areas at International Internet BW (IIBW)
this point.
Price of IIBW per Mbps
In the end, the only companies providing Internet B. Local Access BW
are the telecommunication providers while small
ISPs in the rural areas relegated to being Internet BB BW in municipalities
cafés and computer rental shops.
BB BW in cities
Conclusion BB BW in provincial capitols
Internet service providers, particularly the
provinces have somehow accepted that they will BB BW in elementary / high school
close shop sooner or later because they don’t
see the situation improving. The government is BB BW in colleges / universities
not taking action to help when it is the only one
BB BW in IT zones/parks
empowered to do so.
BB BW in hospitals
ISPs are partly to blame. Their lack of cooperation
in giving information reflects that it has not done a BB BW in tourist spots
good job in escalating Internet penetration in the
country. This raises the question: “Is the industry
C. Coverage
worth saving if their contributions to economy BB Homes passed
and Internet penetration can’t be measured
accurately?” Coverage of municipalities and provincial capitals

Carriers, on the other hand, are playing an Coverage of cities and provincial capitals
important role in bringing down the cost of access
Coverage of elementary and high schools
and offering better bandwidth infrastructure. As
it penetrates the dial-up Internet subscription, Coverage of colleges and universities
which is the number one source of revenues
among ISPs, one can’t help but doubt the intent Coverage of IT zones and parks
of carriers in bringing down the ISP market that
Coverage of hospitals
they also serve.
Coverage of tourist spots
Government’s role in protecting and helping the
SMEs still needs to be felt by this sector, especially D. BB Subscribers
the ISPs in rural areas. Although regulation is
not encouraged before to allow market forces to Residential
dictate its growth, the current situation shows Business registered with SEC
that we will see ISPs vanish one by one with their
entrepreneurial faith in government regulators BB Residential Subscribers with websites
shattered.
BB Business Subscribers with websites
Rules and regulations must be set-up to ensure
E. Average Annual BB Price
that there won’t be destructive and unfair
competition between ISPs and telecommunication Per Mbps leased line
companies. Of course, such a perspective is only
worth looking into if we ever care at all for this Per 128 Kbps line (Cable)
sector.

62 internetinfrastructuredevelopment
 philippineinternetreview

BroadBand (BB) Indicators & Targets (1994-2014)

1994 2004 2009 2014

BEST AVERAGE BEST AVERAGE BEST AVERAGE
64kpbs 8 Gbps 2 Gbps 6Gbps 10 Gbps
$160,000.00 $1,000.00 $1,000.00 $200.00 $200.00 $100.00 $100.00

14.4 kbps 128 Kbps 33.6 Kbps 256 Kbps 128 Kbps E1 leased line 256 Kbps
14.4 kbps 10 Mbps 56 Kbps 100 Mbps E1 leased line 1 Gbps 10 Mbps
14.4 kbps E1 leased line 33.6 Kbps 10 Mbps 64 Kbps 100 Mbps E1 leased line
14.4 kbps 64 Kbps 33.6 Kbps 256 Kbps 64 Kbps E1 leased line 256 Kbps
14.4 kbps E1 leased line 64 Kbps 10 Mbps E1 leased line 100 Mbps 10 Mbps
14.4 kbps 100 Mbps 1 Mbps 500 Mbps 10 Mbps 1 Gbps 100 Mbps
14.4 kbps E1 leased line dial up E1 leased line 64 Kbps 10 Mbps 128 Kbps
14.4 kbps 128 Kbps 33.6 Kbps E1 leased line 128 Kbps 10 Mbps E1 leased line

<1% 10% 5% 70% 50% 100% 70%

<1% 50% 30% 70% 50% 100% 70%
<1% 70% 50% 100% 70% 100% 100%
<1% 10% 5% 70% 50% 100% 70%
<1% 30% 20% 70% 30% 100% 70%
* not applicable 70% 50% 100% 80% 100% 100%
<1% 50% 40% 70% 50% 100% 70%
<1% 50% 40% 70% 50% 100% 70%

0 10% 5% 50% 30% 70% 50%

<1% 20% 10% 50% 30% 70% 70%
<1% 5% 2% 25% 10% 50% 25%
<1% 50% 40% 70% 50% 100% 70%

$22,000.00 $24,000.00 $4,800.00 $6,000.00 $2,400.00 $2,666.67

$28,000.00 $30,000.00 $6,000.00 $7,500.00 $3,000.00 $3,333.33

* no IT parks then

Estimates made by Miguel Paraz and Janette Toral. Template from

the Department of Transportation and Communications.

internetinfrastructuredevelopment 63
 philippineinternetreview
1 http://groups.yahoo.com/group/ph-cyberview/
message/2506
2 For a complete account of Fidonet Philippines
from Carlos Legaspi, one of its pioneers:
http://member.newsguy.com/~twilight/tz/
history.asc
3 Philippines looks back on 7 years on the Net
By Chin Wah Wong and Melba-Jean M. Valdez,
Computerworld Philippines
S O U R C E S / R E F E R E N C E S
h t t p : / / w w w . i d g . c o m . h k / c w / r e a d s t o r y .
asp?aid=20010402001
4 Email interview with Jonathan Marsden, admin-
istrator and BBS sysop (systems operator)
5 • New Service Providers Storm Philippine Internet
Beachhead By Betty B. Daguio, Computerworld
Philippines, May 15, 1995
http://web.archive.org/web/19961224173834/
www.europa.com/~jra/cyber/globe.htm
• Six New Ways to go Online in Manila by P.W.
Wong, PC Digest Philippines, August 1995,
archived at:
http://web.archive.org/web/19961224173745/
www.europa.com/~jra/cyber/feat/newonlin.htm
• Internet Access Costs Down 50% by Betty B.
Daguio, Computerworld Philippines, November
30, 1995, archived at:
http://web.archive.org/web/19961224173622/
www.europa.com/~jra/cyber/news/intcost.htm
6 • Internet use hampered by dearth of lines, funds
By Betty B. Daguio, Computerworld Philippines
(January 31, 1995)
http://www.internetreview.ph/modules.php?na
me=Forums&file=viewtopic&t=158
• PHnet marks its first anniversary By Betty B.
Daguio, Computerworld Philippines, April 15, 1995
http://www.internetreview.ph/modules.php?na
me=Forums&file=viewtopic&t=157
7 The text of the act is at:
http://www.ntc.gov.ph/laws/ra7925.html
8 Edsamail offers “ISP-free” e-mail service by
Mayme Fernandez, The Web Philippines, March
31, 2000.
http://www.itnetcentral.com/article.asp?id=2933
9 • Lessons of the Love Bug by Will Garside,
ComputerWeekly.com
http://www.computerweekly.com/Article46080.
htm
• Philippine student group notorious for hacking,
Geoffrey P. Ramos, Computerworld
h t t p : / / w w w . c n n . c o m / 2 0 0 0 / T E C H /
computing/05/18/manila.hackers.idg/
10 Proposed law brings IT to unserved rural areas
by Margarita D. De Pano, Businessworld IT
Matters, July 9 2001
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
07092001d.html
64 internetinfrastructuredevelopment
11 RP ISPs face uphill fight for survival By Helen A.
Jimenez, Businessworld IT Matters, December
10, 2001.
http://itmatters.com.ph/features/features_
12102001.html
12 PLDT eyes 60% of RP Internet mart, by Helen A.
Jimenez and Manolette P. Tabingo, Businessworld
IT Matters.
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
05302002a.html
13 Edsamail ends free e-mail service by Rosary
Grace Sarmiento, Computerworld Philippines,
April 10, 2002.
h t t p : / / w w w . i t n e t c e n t r a l . c o m / a r t i c l e .
asp?id=8536
14 Globe unveils wireless e-mail service, by Eleanore
C. Sanchez, Businessworld IT Matters.
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
06122003e.html
16 Intel boosts verification program for ‘hotspots’
by Geoffrey P. Ramos, Chief of Reporters;
Computerworld Philippines
http://www.itnetcentral.com/computerworld/
article.asp?id=12477&leveli=0&info=Computer
world
17 PLDT firm sees PhP31.5-M earnings from
satellite Net service, by Manolette P. Tabingo,
Businessworld IT Matters
h t t p : / / i t m a t t e r s . c o m . p h / n e w s / n e w s _
02052003d.html
18 A summary of Philippines wireless developments:
The Philippines Taking the Wireless Path, By
Alex Villafania Metropolitan Computer Times
http://www.mctimes.net/2003/2003-ender/
The_Philippines_Taking_the_Wireless_Path.
html
19 NTC eyes VoIP guidelines by Lawrence Casiraya,
Computerworld Philippines Reporter
http://www.itnetcentral.com/computerworld/
article.asp?id=12834&leveli=0&info=Computer
world
20 PLDT, Microsoft team up to launch MSN
Philippinesby Lawrence Casiraya, CW Reporter
http://www.itnetcentral.com/computerworld/
article.asp?id=12735&info=Computerworld&lev
eli=0
i Events since the acquisition by PLDT can be
found at http://www.elife.ph/aboutus/aboutus.
php?f=aboutus

Promoting Innovation
Through Effective Regulation
The Case of WLAN in the Philippines
Dealing with Innovation
Innovation is never supposed to be a bad thing.
In fact, for many industries, it is the engine that
powers the business. In electronics, information
technology, Internet, telecoms, software,
pharmaceutical and automotive, innovation
defines the business more than anything else.
Because of the huge economic benefits that
it brings, regulation is often used as a tool
to encourage innovation. But as with every
new product or service, regulation often does
not come easy. This is especially true when a
greater part of the rules needed to govern the
technology has yet to be written. In such cases,
the regulatory task becomes that of extending
the reach of government, leading to a less than
optimal approach.
Innovation has its price. It displaces old
technologies and adds to the competitive
pressure in the market. And no matter the
number of times firms are reminded that this
is part of normal business risk, innovation
continues to be approached with the same
level of anxiety. Perceived as a threat, existing
players resort to various strategies to hinder
its innovation and this is when things turn
bad. Still, it is this constant pursuit of the next
best thing that keeps markets healthy and
promotes progress. So for agencies charged
with policymaking and regulation, the main
challenge lies in specifying and implementing
rules to govern every new innovation that yield
the greatest benefits in the long run.
Questions and Answers
In the case of WLAN, regulatory authorities are
faced with the challenge posed by every innovation
that enters the market—how to regulate it and
what regulations to apply.
Given the varying concerns aired about WLAN
by different sectors and conflicting interests that
certain parties seek to advance, it appears—at
least on the surface—that regulators are faced
philippineinternetreview
By Johnson M. Chua
with a host of issues; some of which may not
be readily dealt with under current laws and
restrictions. On closer inspection, however, the
issues are actually few and fairly simple (see
Table 1).
Table 1. Roots of the WLAN Debate
Primary Issues:
• There is no existing regulation that
covers WLAN technology and shared
spectrum usage
• Previous laws and regulations were written
without reference or consideration to
innovations such as WLAN
Secondary Issues:
• Use of a common frequency
• Interference especially given that some
of the frequencies recently determined
and reserved for WLAN are currently
assigned and used by other parties
• Need for guidelines to govern private and
public (commercial) WLAN operations
laws and relate it to the prevailing
situation; and to rule on issues relating to
new technology in line with such updated
interpretation
The main issue involves the presence of
a regulatory gap. This follows from the
fundamental limitation of the regulatory
process when it comes to industries that are
prone to revolutionary shifts in technology.
First, laws and regulation—however forward-
looking they may have been purposely crafted,
were written with a limited perspective
dictated by the technologies of the times. As
such, existing laws and regulations essentially
do not define provision or readily cover
innovations such as WLAN. They also do not
provide the most ideal rules to address unique
traits that may characterize a new technology
such as WLAN’s system of shared spectrum
use.
internetinfrastructuredevelopment 65
 philippineinternetreview
Second, because the new innovation often has
no exact counterpart in regulation, a regulatory
vacuum is created. Given the lengthy process
of drafting new legislation and policies tailored
specifically to govern the new market that arise
from the new technology, regulators usually
adopt a “second-best” approach of simply
scanning the universe of existing policies and
making do with what is most applicable. While
this usually works, this exposes the market to
the potential problem of being made to function
under the wrong regulatory regime—which can
negate most of its economic benefits.
Such a strategy also leaves the regulator open
to potential challenges and possible blame later
on. Lastly, certain innovations make certain
laws irrelevant and obsolete, often resulting
to confusion in the market. This leads to two
different approaches. At one end, regulators
attempt to shape the new market to conform
to existing laws. At the other, strong-willed
and enlightened regulators make full use of
their powers to interpret laws, update the
interpretation of existing laws to conform to the
times and draft new rules as needed.
Bridging the Regulatory Gap
Because all telecom regulatory agencies
worldwide have in one way or another faced the
similar situation of coping with the introduction
of innovative products—that involve a unique
technology and give rise to new markets--clues
to resolving the regulatory gap in WLAN may lie
in examining “best practices” employed by such
agencies in response to new developments.
As a standard rule, radio control laws in
other countries embody spectrum usage
and allocation policies similar to that of the
Philippines (see Table 2). It can even be argued
that developed markets such as US, Japan and
the European community have more stringent
measures relating to frequency use compared
to the Philippines.
In the same way, very few countries have
existing regulation that closely relates to WLAN,
unlicensed devices and shared spectrum use
(see Table 3). And yet, even in countries with
tougher radio spectrum regulatory regimes,
WLAN is typically free and unlicensed (see Table
4). How?
Contrary to the prevailing view in the
Philippines, the answer does not involve going
against existing laws relating to the use of
spectrum, no matter how dated or irrelevant
66 internetinfrastructuredevelopment
Table 2. EU Directive: Setting a Common
Regulatory Framework for Electronic
Communication Networks and Services
(Adopted July 25, 2003)
A newly adopted EU directive contains
guidelines regarding spectrum allocation
as follows “radio frequencies are an
essential input for radio-based electronic
communications services and, in so far
as they relate to such services, should
therefore be allocated and assigned by
national regulatory authorities according
to a set of harmonized objectives and
principles governing their action as well
as to objective, transparent and non-
discriminatory criteria, taking into account
the democratic, social, linguistic and
cultural interests related to the use of
frequency. It is important that the allocation
and assignment of radio frequencies is
managed as efficiently as possible.”
they are regarded. Following the examples of
EU countries that notably impose some of the
most restrictive spectrum policies, the key to
coping with the WLAN issue lies in the exercise
of judicial powers assigned to duly prescribed
telecom authorities: power to interpret laws
and relate it to the prevailing situation; and to
rule on issues relating to new technology in line
with such updated interpretation.
Because of the absence of clearly stated
guidelines relating to a new technology, which
is the case with WLAN, regulatory authorities
are given privilege to exercise their ability to
broadly interpret laws. In effect, the current
policy adopted in most developed countries
regarding WLAN is achieved—rightly—with less
fear of violating the letter of the law and with
stronger intent to adhere to its spirit.
As a point clearly driven by the international
community, it is not inconsistent for countries
to maintain restrictive policies relating to
spectrum allocation and use and yet permit free
and unlicensed spectrum use for WLAN. Such a
situation should be possible in the Philippines
(see Table 5).
In grappling with the Radio Control Law,
regulators may have to remember that the law
was premised on past technologies, without any
notion that a shared spectrum technology of the
 philippineinternetreview

scale involved in WLAN is or will be possible. As

such, present day regulators are given basis to apply
the full extent of its powers to broadly interpret the
law and apply it to the new market realities. It can
do so by taking exception of the fact that WLAN
utilizes a system of shared spectrum—something
that existing laws do not cover.
Operation shall not resume until the condition
causing the harmful interference has been
corrected The rules for unlicensed use of RF
devices were first established approximately
60 years ago. In 1938, the National
Telecommunications Commission allowed
devices employing relatively low level RF signals
to be operated without the need for individual
licensing as long as their operation caused no
harmful interference to licensed services, and
the devices did not generate emissions or field
strength levels greater than a specified level
that was chosen to ensure that the device
generally would not cause interference.
The NTC can adopt similar policies relating to
spectrum allocation and use and still permit
free and unlicensed spectrum use for WLAN.
Born Free
While WLAN regulation in the Philippines
is slowly being folded into the regulatory
structure of traditional telcos, it is apparent that
other regulators worldwide do not share the
same position. In fact, by keeping it free and
unlicensed, they have directly acknowledged
that WLAN should not be regulated as though it
is a traditional telco service.
Table 3.
Rules on Unlicensed Devices
in the US:
Part 15 of the US FCC Rules sets out
regulation covering unlicensed devices. The
basic premise of Part 15 is that unlicensed
devices cannot cause interference to
licensed operations nor are they protected
from any interference.
The operational parameters for unlicensed
operations are set forth in Section 15.5 of
the rules as follows: (a) Persons operating
intentional, unintentional radiators shall
not be deemed to have any vested or
recognizable right to continued use of
any given frequency by virtue of prior
registration or certification of equipment (b)
Operation of an intentional, unintentional,
or incidental radiator is subject to the
conditions that no harmful interference
is caused and that interference must
be accepted that may be caused by the
operation of an authorized radio station, by
another intentional or unintentional radiator,
by industrial, scientific and medical (ISM)
equipment, or by an incidental radiator (c)
The operator of a radio frequency device
shall be required to cease operating the
device upon notification by a Commission
representative that the device is causing
harmful interference.

Table 4. Benchmarking Wi-Fi Regulations

US Netherlands Spain France Italy UK

Covered by No license No license Indoor use does Public WLAN No license
Part 15 rules required required not require any operators Spectrum is
on license must be free
unlicensed Spectrum Spectrum is Outdoor use is registered
devices and is free free subject to liberal and
operations authorization authorized
Moving Growing procedures
towards the presence of
creation of a free public
free access areas
independent
wirelessnet
work insome
cities
Devices are certified to ensure compliance
Commercial WLAN operations are registered for business and monitoring purposes
Market is open to all participants

internetinfrastructuredevelopment 67
 philippineinternetreview
Such a distinction is made by these regulators
on account of several unique qualities of WLAN.
The first relates to its origin and purpose.
As a new technology, perspectives about the
precursor of WLAN varies. One side argues that
since it bears a similar mark to a miniature
cellular or small radio communication system it
should be a closer relative of telcos.
The other side presents a more compelling
view, which the international market appears
to adopt. In this, WLAN is descended from its
“wired” LAN counterpart. It is an improvement
over the existing LAN architecture or on a
commercial scale, an extension of the traditional
wired Internet access service.
Second, WLAN technology is distinct from
traditional telco systems and as such, qualifies
for lesser regulation on account of its unique
utilization of the frequency spectrum. Rules
applied to a “commons” market are and should
Table 5. Living the Law
“The radio frequency spectrum is a scarce
public resource that shall be administered
in the public interest and in accordance with
international agreements and conventions
to which the Philippines is a party...”—Sec.
4c, RA 7925
“The radio spectrum allocation and
assignment shall be subject to review in
the interest of public service and in order
to keep pace with the development in the
wireless technology with the end in view of
ensuring wider access to the limited radio
spectrum and the use of cost effective
technology...”— IRR of RA 7925
Table 6. Unlicensed Devices in the US
• Cordless telephones
• Remote control toys
• TV remote controls
• Toy walkie-talkies
• Garage door openers
• Keyless entry and car alarm systems
• Home security systems
• Wireless routers
• Bluetooth
68 internetinfrastructuredevelopment
be different to that of private or exclusive
spectrum domains that characterize typical
telco operations. Property rights are not
assignable—a fundamental feature of WLAN
which justifies why its spectrum is deemed free
in other countries.
Third, WLAN technology has long been a
mainstay in the household through products
such as remote control toys, microwave ovens,
cordless phones and baby monitors (see Table
6). These have historically been subject to
minimal regulation without complications or
problems. Fourth, WLAN relates to data rather
than voice. In the Philippines, as with other
countries, data is regarded as a deregulated
market. Lastly, WLAN does not compete with
traditional telco services. All these hints of
the non-telco pedigree of WLAN, and provide
a good picture of the mindset that regulatory
authorities in other countries adopted when they
decided not to regulate WLAN as a traditional
telco service.
Necessary Regulation
Still, while WLAN should not qualify or be
subject to telco-like regulation, regulators
are nonetheless tasked to oversee the
market. Two reasons justify this: use of radio
frequency and—more importantly—use of
such frequency for profit. This highlights
other relevant aspects involved in the current
WLAN debate—interference and regulation
of public (commercial) WLAN operations. On
both, market-oriented solutions can guide the
regulatory process (see Table 7).
Preventing interference. The case for
interference follows from the fact that the
frequency for WLAN is currently owned by
Meralco. While the general view is that this
would be a non-issue had the frequency
been free. Interference is actually a concern
regardless of whether or not the WLAN
spectrum is free. Standard solutions to address
this involve measures such as setting of non-
interference standards, certification of all WLAN
devices to ensure compliance and the conduct
of interference studies.
Interestingly, the case for protection from
interference presented by the Meralco situation
is not unique to the Philippines. France, for
instance, had a more compelling reason to
disallow WLAN—the frequency is used by its
military. Yet, indoor use of WLAN systems is not
regulated and through a system of authorization,
public WLAN operations is allowed.
 philippineinternetreview

Table 7. Weighing the Options

Key Issue Regulatory Options

Interference • Adoption of non-interference limits/standards

and resolution mechanism
• Certification of all WLAN devices
• Licensing of all public and commercial WLAN
operations
• Interference studies
• Transition period to facilitate transfer of
currently assigned WLAN frequency users
• Compensation of Meralco and other current
assignees of the shared WLAN frequency by
commercial WLAN operators

Private WLAN Operations • Certification/authorization requirement for all

equipment utilizing the shared WLAN frequency
• Collection of certification fees
• No spectrum user fees

Free Public • Registration of public WLAN operation

WLAN Operations • Collection of registration fees Commercial
(Free Wi-Fi operations— WLAN Operations
government, schools, • Franchise and/or licensing requirement
community-based • Collection of franchise and/or licensing fees
or enterprise-based • Collection of spectrum user fees
freenets, etc.) for shared usage

There are also other ways to limit the interference
problem from becoming troublesome. In the
US, regulators are currently moving to allocate
additional spectrum for unlicensed broadband
use following the findings of a working group
on unlicensed devices and experimental
licenses that “the creation of unlicensed bands
has been very successful in allowing the
rapid introduction of new technology and that
additional unlicensed bands would create more
opportunities.”
Allowing private/free WLAN system to
evolve and flourish. In the case of private,
large enterprise-based, communitybased or
free WLAN systems (freenets), the mainstream
perspective is that regulation should be kept
at a minimum to permit such systems to freely
evolve and allow the market to enjoy its full
benefits. In many cases, regulation is extended
only insofar as to ensure that WLAN equipment
comply with set standards. Larger enterprise-
based, community or free WLAN systems are
registered with the government for monitoring
purposes.
Establishing guidelines for public/
commercial WLAN operations. Public WLAN
operations are distinguished by the pursuit
of profits. In effect, the main distinction that
regulators should make is between private
and commercial operations. As a commercial
service, regulators are required to come up with
guidelines to govern public WLAN operators.
Different levels of regulation are used for this
purpose. Typically, this involves a form of
certification for devices and class licenses for
commercial operations. As a ‘commons’
Cornering the Market
One of the ideas currently being floated involves
the possible limitation of the operation of
commercial WLAN services to certain types of
companies. Using the argument that commercial
WLAN involves a network element, licensed
telcos are currently pushing to make public
WLAN their exclusive market. The argument is
based on the assumption that in the network
elements market, no restriction is made to
effect a certain form of market exclusivity.

internetinfrastructuredevelopment 69
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Knowing the Technology (in a box)
Spread spectrum communication systems
use special modulation techniques that
spread the energy of the signal being
transmitted over a very wide bandwidth. The
information to be conveyed is modulated onto
a carrier by some conventional techniques,
usually a digital modulation technique and
the bandwidth of the signal is deliberately
widened by means of a spreading function.
The spreading technique used in the
transmitter is duplicated in the receiver
to enable detection and decoding of the
signal. Spread spectrum systems offer two
important technological advantages over
conventional transmission schemes. First,
the spreading reduces the power density of
the signal at a given frequency within the
transmitted bandwidth, thereby reducing
the probability of causing interference to
other signals occupying the same spectrum.
Second, the signal processing in spread
spectrum systems tends to suppress
undesired signals, thereby enabling such
systems to tolerate strong interfering
signals.
As Nicholas Negroponte points out in one of his
articles, the market for Wi-Fi calls on the regulator
to adopt a new perspective: “what people have
learned in Wi-Fi, and recent experiments with
spread spectrum…is that we can rethink how
we allocate spectrum. We can consider parts of
it as a large commons, rather than small lots.
Strict boundaries are then replaced by suitable
behavior.” As mentioned earlier, one of the
most significant differences between a WLAN
network and traditional networks is that the
spectrum is shared; that it is organized as a
‘commons.’ And, as mentioned earlier, property
rights are not clearly assignable in this case.
In effect, the technology inherently allows for
multiple players. For this reason, regulation
usually applied to govern traditional telcos
does not extend to WLAN. Such is the premise
with which regulatory authorities have opted
to stand down and adopt looser rules when it
comes to WLAN technology.
The second involves the issue of franchise
restrictions. If telcos continue their efforts
to corner the WLAN market, the market will
have to insist that regulators look at existing
franchises and clarify whether commercial
wireless Internet access services is covered in
70 internetinfrastructuredevelopment
such franchises. Franchises would need to be
examined to ascertain whether it automatically
authorizes telcos to engage in building a new
network for WLAN and make money by offering
the service to the public.
RA 7925 defines a franchise as “a privilege
conferred upon a telecommunications entity by
Congress, authorizing that entity to engage in
a certain type of telecommunications service.”
Franchises given to existing operators limit
companies to a specific type of business. For
instance, holders of a local exchange franchise
are not allowed to operate a cellular phone
service or international gateway facility unless
they also own a franchise to operate such
services.
In the case of commercial WLAN services, RA
7925 does not provide any equivalent definition
for such a service. Current franchises owned
by telcos do not automatically extend to the
provision of new commercial services as they
are developed, such as the case with wireless
internet and other future innovations. The
commercial provision of new services based on a
new technology—if deemed to involve a network
infrastructure element—are not necessarily
subordinate to existing franchises, as with
the rational for creating a separate franchise
requirement for mobile phone services.
Wireless Internet Service Providers
• Fixed line players
• Mobile phone operators
• Internet service providers
• Pure play WLAN operators
• Property owners
Under such a situation, the only way the franchise
question can be avoided is by recognizing that
public WLAN is a value-added service (VAS)
or a quasi-VAS. Current Internet services that
are provided by telcos and non-telco ISPs are
considered value-added services and are thus,
covered by more relaxed rules which entails
licensing rather than franchise requirements
(see Table 8).
Commercial WLAN thus needs to be defined
whether it is network-based or simply a value-
added service. If it is deemed network-based,
then a franchise may be required as existing
laws and franchises do not cover nor consider
any such service and technology. With this
interpretation, public WLAN is essentially a

new network-based system facilitating wireless
Internet access. It is distinct from networks
of existing services such as local exchange or
mobile phone. If the issue is forced that only
existing franchised telcos own the right to
operate WLAN commercially then regulators
would need to determine which type of
franchise currently covers such a service and
address the issue of whether only holders of
mobile and other radio-based franchises have
the exclusive right to operate a commercially
WLAN system thereby restricting pure local
exchange franchise holders or cable operators
from entering the market, or whether it is the
other way around.
Pure play WLAN operators would have no place
in such a market. Interestingly, all commercial
WLAN operations and business models fit the
“reseller” or “value-added service” definition.
WLAN operators, private or public, use telco
facilities to access the Internet. The global
telecom community appears to adopt the same
interpretation. In fact, by keeping the spectrum
free and the operation unlicensed, regulators
agree that the WLAN market should be open.
As such, there are commercial operations in
Table 8. Commercial WLAN Operators need a Franchise?
Nature Involves a network element
Possible
Regulatory Franchise
Requirement
• WiFi is a new public communication
network (i.e., only duly enfranchised
PTEs are authorized to offer the service
for compensation)
• Commercial WiFi involves a new
technology, an improved service, and a
unique system of shared spectrum
usage that is distinct from all currently
enfranchised telecom networks and
services (i.e., local exchange, cellular
phone, international gateway, etc.)
Why? • Current franchises do notautomatically
cover or extend tothe commercial (for
profit) operation of new technologies
as they are developed
• The commercial offering of new
technological products and
innovations are not automatically
subordinate to existing franchise
• RA 7925 does not provide any
equivalent definition for new
technological innovations such as
commercial WiFi
philippineinternetreview
the US by non-telco companies such as Boingo
Wireless and Wayport, and even companies such
as McDonald’s and smaller scale operations by
individual entrepreneurs and property owners.
Unfounded Fears
Many concerns raised about WLAN are clearly
overstated. For example, among the most
popular fears about WLAN is that the frequency
will be saturated. Given its small range, frequency
hopping capabilities, large allocated spectrum,
and limited market in the country, the frequency
allotted to WLAN can even be regarded as more
than adequate, if not too much. Not every
household or business will install a WLAN system
or much less go into the commercial WLAN
business. Only a handful of commercial operators
can be expected to venture into the WLAN
business. This makes the reserved spectrum band
allocated for WLAN more than ample, and likely
to leave certain portions of its reserved spectrum
unused or underutilized.
The same point applies to the hype about
interference. WLAN remains a highly evolving
technology. More sophisticated methods
More of a value added service
License
• WiFi is a derivative and/or
improvement of services that ISPs
currently deliver
• WLAN is an improved LAN or private
radio communications network which
allow multiple users to share a
common spectrum
• Rules for WLAN can be similar to that
of radio or paging operators
• As a VAS or near-VAS innovation,
commercial WiFi operations are open
to non-telco competition
• Telco infrastructure is used to connect
to the Internet
• Commercial WiFi competes with
traditional ISPs, not telcos
• Like the ISP sector today, telcos will
likely dominate the market
• Meralco, which currently owns a
portion of the frequency band
allocated for WiFi services should not
be restricted from offering WiFi on a
commercial scale
internetinfrastructuredevelopment 71
 philippineinternetreview
‘Free’ Wi-Fi Networks
• Community networks
Shop owners (e.g., mall operators,
fastfood joints such as McDonalds)
• Enterprise-based WLAN service (e.g.,
banks offering free WLAN access to
clients)
• School/Campus WLAN services
• Government WLAN services (public
parks, airports, police, government Market-oriented. While certain regulators hold
offices, etc.)
of managing the spectrum and eliminating
possible interference can be expected in the
future. Market-based solutions can similarly be
expected to evolve and effective mechanisms
to control and safeguard against interference
are likely to be established.
Such arguments support the view that the
move to corner the commercial WLAN market
is more a product of a natural impulse rather
than rational thought. For one thing, telcos do
not have to resort to such a strategy, which can
otherwise be interpreted as an overkill. Like
traditional ISPs, public WLAN operators will
rely on telco-owned infrastructure to connect
to the Internet. Similar to what is happening
to the ISP sector today, telcos will eventually
dominate the market (in fact, they are already
offering WiFi service commercially ahead of
a regulation). But even then, such foreseen
dominance of the public WLAN market by telcos
should not come at the expense of limiting
competition, specifically by putting a gag on
small-scale commercial WLAN operations, free
WLAN networks, community-based and large
enterprise-based networks which can bring
about significant social benefits.
Enlightened Approach
Regulating new technologies requires balancing
several interests that are often competing.
Taking a cue from the experiences of other
countries, certain strategies can provide
valuable guidance in regulating WLAN.
Focus on the issue. As stated earlier, the issue
is really about the absence of WLAN regulation.
In effect, regulators are playing catch up with
the technology. Possible missteps could have
a dramatic impact on the market for WLAN
and other related technologies currently being
72 internetinfrastructuredevelopment
developed. This could also lead to a regulatory
challenge by several parties.
Forward looking. New regulation must make
provisions to accommodate rather than stifle
further developments in the technology. This
can be done by directly drafting new rules or
by adopting a more liberal interpretation of the
law (with the purpose of making them relevant
to the times).
the perspective that the choice is either to side
with industry players or the consumers, it should
be the protection of the market system through
enlightened policy making and regulation that
should be of utmost concern. Focus should be
made to maximize the long run benefits that
can be derived with the introduction of new
technologies.
Recognize the changing market. The market
is changing and technology is developing in ways
that were never previously thought possible.
Traditional structures must not be maintained
at the cost of foregoing the benefits that come
when new markets are created.
Innovation is good. Innovation lowers costs,
improves margins, promotes greater efficiency
and increases productivity. In the case of WLAN,
it also has the potential social benefit of making
Internet technology more accessible and even
help expand rural access. Just imagine if fixed
line or paging operators successfully lobbied to
limit cellular phone operations in the early 90’s
by using the argument that it will affect the
viability of the business.
Going Against the Grain
Undoubtedly, the WLAN debate touches on
various interests and positions, some of
which are technical in nature. Without risking
being mired under the weight of such details,
regulators must adopt a stance, consistent with
its mandate that focuses on the market rather
than its personalities. In particular, the welfare
of the market for WLAN operation must be the
target of regulation. WLAN has the potential to
improve competition, with freenets, and small-
scale commercial operations. It is also likely
to give birth to a host of new applications. To
bar such possibilities would be to move in the
direction opposite of where the rest of the world
is heading.
advertorial
 By Daniel Escasa

ver since man learned to walk on two

feet and a straight back, crime has been
around. Ever since computers came about,
crime has been around. Many a theologist
will point to original sin as the soul of crime,
while evolutionists will point to our animal
roots. Whatever the reason is beyond the
scope of this chapter. What we do want
to accomplish in this chapter is to define
computer-related crime, how perpetrators
carry out their evil deeds, and how to protect
ourselves from being victimized. In order to
illustrate computer-related crime in action,
we’ll browse through a few choice cases.

If you’ve been using personal computers

long enough, you’ll know that viruses and
trojans are nothing new. Since worms
spread through a network, and the Internet
has been widely available only the past
10-15 years, early PC users didn’t have
to worry about worms. Even local area
networks (LANs) were still rare. It was fairly
easy to write a virus, although spreading it
was a little harder. In fact, in most cases,
writing a virus was easier than spreading
it, because the latter had to use diskettes
as a conduit. One type of virus was the
boot virus, which infected the boot sector
of a diskette. It could do something as
innocuous as changing the volume label
of all subsequently infected diskettes,
and later, of hard drives. Or, it could plant
a tiny program in the boot sector that
would interrupt your work every so often
with messages which could be political
statements or simply the inane musings
of a prepubescent programmer.

75
 philippineinternetreview
File viruses were executable files that infected
other executables and altered their behavior. A
virus planted into a word processing program
might rig it so that the author of all documents is
some individual, possibly the creator of the virus.
Vigilance was - and still is - key to preventing
infection. A boot virus resides in the boot sector
of a diskette, so all it takes to protect yourself
against it is not to boot from it. However, that
may be oversimplifying the matter, because
even a non-bootable diskette can still harbor a
boot virus. When you attempt to boot from one
and it displays the message “Non-system disk
or disk error. Press any key to continue,” it has
already loaded the boot sector into memory.
Do not simply replace the diskette with a clean
boot diskette and “press any key to continue.”
Instead, insert a clean diskette you know to
be clean then hit the reset button. Practicing
safe computing includes knowing what dangers
lurk in diskettes or executable files, and how to
neutralize them. Continue to educate yourself,
because then, as now, there were virus creation
kits circulating in the underground which made
it easy for even programming bunglers to write
a fairly sophisticated virus. You’ve heard the
statement so often you could retch, so you’ll
excuse me if I repeat it: Computers have made
doing things easier.
That, unfortunately, includes crime against
others - i.e., using the computer as a tool for
perpetrating crime. Alberto “Abet” dela Cruz,
acting president of the Philippine Computer
Emergency Response Team (PH-CERT), defines
high-tech crime as any act in violation of the
penal code, and of the E-commerce Act. “There
An example of a spoof email from an address that does
not exist. It contains an attachment of dubious origin,
with a high possibility of it being an email virus.
76 hightechcrimes
are two kinds of high-tech crime, or crime
involving computers,” says dela Cruz. “The first
is the usual penal code violations using the
computer as a tool. For example, the famous
Nigerian scam and its variants used to employ
fax. Now that the Internet is accessible, the
letter which used to be faxed are now sent by
e-mail.”
For those unaware of the Nigerian scam, this is
a letter sent supposedly by a deposed Nigerian
dictator’s close relative who wants to take
millions of dollars out of the country and seeks
a “partner” to help him out. The letter writer
claims that the money is not ill-gotten (yeah,
sure) and wants a legitimate business cover
to deposit the money in some foreign bank.
That’s where you come in: You’re supposed
to pose as a contractor, mainly in construction
work, proposing to undertake a major project
in Nigeria, for which they will pay you, by bank
transfer, the full amount of their loot. For your
trouble, you’ll retain 20% of the money. You’re
supposed to provide them with your dollar
account details (or open one if you don’t have
one yet). Once you do so, you wake up the next
morning to find that it’s empty, and that the
scamsters are nowhere to be found.
Be extremely wary of even replying to this
scam mail, as the perpetrators won’t stop at
anything—not even murder—to get what they
want, or to keep you from recovering your
money. An interesting twist to the Nigerian
scam appeared shortly after EDSA II, when a
modified form of the letter, allegedly signed
by former First Lady Loi Ejercito, made the
rounds of e-mail. Same modus operandi just a
different cast of characters.
Although not as potentially life-threatening as
the Nigerian scam and its spawn, unsolicited
commercial e-mail (UCE) attracted enough
attention to spur some countries to pass tough
anti-UCE laws. UCE, more informally known
as spam, is, as the name implies, mail sent
from vendors who want to inform you of their
products via e-mail in the hopes that you will buy
their products. These products range from sex
enhancement and weight loss pills to computer
hardware and software to home mortgages.
Many of them are downright ridiculous for the
recipient. In my case, I recive several messages
in my inbox claiming the most effective drugs
for weight loss. My weight of 64kg is ideal for

my height of 1.7 m so weight loss is the least
of my needs. There are also these messages
offering “the lowest rates” on housing loans,
then a line toward the bottom of the message
saying that the loans are available only to US
residents.
Those messages should give you an example
of how much of a waste of bandwidth and
mail server storage space they can be. Some
spammers scour newsgroups and mailing lists
for e-mail addresses where they may send
their product pitches. Some shadowy Internet
businesses make lists of e-mail addresses
available on CD for varying amounts of money
depending on the number of addresses. These
are for the spammers who want to get into
business right away and don’t want to wait till
they’ve gathered a sizable number of addresses.
In either case, you’ll note that spamming does
entail some expenses, but all they need is a
response rate of about 1% to make a profit.
So, stopping spam means that they should get
lower than 1% response rate and the closer to
zero, the better. That means that when you get
spam in your inbox, delete it. If your ISP has a
webmail interface, go there before downloading
your mail into your local storage, and delete
mail that you’re sure is spam.
While mail filters can stop most spam from
getting into your inbox, there are still those
that might make it through. Mail filters that
search for “viagra” in the subject or body of the
mail will be fooled by variations, e.g., via gra
or v*i*a*g*r*a. You’ll have to purge it yourself,
before you download your mail onto your own PC.
The best way to handle spam is to try not to get
it in the first place. Sites with content meant for
mature audiences are some of the worst places
to leave your e-mail address. If you must leave
an address, open a free webmail account and
use that one instead. Use that same address if
you want to participate in discussion mailing lists
An e-mail inbox full of spam, or unsolicited messages
(actual URL edited for security purpose).
philippineinternetreview
or usenet newsgroups. You can also mask your
e-mail address by adding a bogus host name in
the domain portion, e.g., my mangled address
might be descasa@no-spam.techie.com, then
my signature would contain instructions on
how to make a valid address out of that—which
is simply to take out the “no-spam” part. Doing
this will foil automated email address mining
software that scours newsgroups and mailing
lists for the addresses of the participants.
At the same time, if anyone in the discussion
group has a legitimate reason for getting in
touch with you, they’ll know how. On the
other hand, it should be safer to leave your
email address at well-known and established
sites such as Yahoo! or Lycos, or at the sites
of erstwhile exclusively brick-and-mortar
companies such as WalMart or Macy’s. Web
sites of established print and audio-video
media such as the New York Times, the
Washington Post, and the like should also
be responsible enough not to let others so
much as see your e-mail address, let alone
harvest them for spamming. Always look for
their privacy statement and a commitment
from them that they won’t sell your e-mail
address, before you leave it with them.
One more thing: although the US has passed
anti-spam legislation, don’t expect the
Philippines to follow suit. The Internet isn’t as
ubiquitous here as in the US, so our legislators
won’t have that on their minds. If there’s one
thing we might have to worry about, it’s cell
phone spam. Fortunately, the cellular carriers
have decided to police themselves and bar
spam from their networks.
Back to dela Cruz, he says: “The target of the
second type of high-tech crime is the computer
itself. Viruses, trojans, and worms are the
most high-profile computer-targeted crimes.
Hacking, as defined in the E-Commerce Act,
is another.” Viruses, trojans, and worms are
more sophisticated today than in the early
days of personal computing, when they had
to be executable files that had to spread, in
large part, by diskette. Today, electronic villains
come in data files (e.g., .DOC, .XLS, or .ZIP
files), and propagate through the hundreds of
millions of computers on the Internet. As an
aside, I should mention that Microsoft’s .DOC
and .XLS files are not purely data files but may
include macros which constitute the executable
portion of the file. .ZIP files, on the other hand,
are not executable themselves but may include
hightechcrimes 77
 philippineinternetreview
executables, e.g., PIFs (Program Information
Files, a left-over from Windows-on-DOS) or
screensavers (yes, they’re actually .EXEs with
a .SCR extension). Microsoft’s overly powerful
scripting language has enabled viruses, trojans,
and worms to hijack an Outlook Express address
book and spread itself by sending copies of itself
to all the entries in the address book.
In some cases, a virus can even mask the sender
by using a random entry from the address book.
So, if you receive an infected email message
that supposedly came from me, don’t be fooled.
I don’t use Windows, let alone Outlook—I use
either PINE or Ximian’s Evolution, and read
webmail from Mozilla, on FreeBSD, whereas
the viruses are written specifically for Outlook
on Windows.
My last sentence shouldn’t be interpreted as a
statement advocating the junking of Windows in
favor of some other OS—that would be beyond
the scope of this publication. The only
thing I’ll say about FreeBSD is that
it has worked for me over the
past five years, and that I hardly
have to use Windows. When I
am in Windows, I do have to
be careful when reading my
web-based mail, specifically
about opening attachments.
No matter how secure and up-
to-date the security might be of
the network I may be working in,
I’m still paranoid, especially about
file attachments, even from people I know. If
I don’t expect a file from them, I’m suspicious,
and ask them about it—by a voice call if they’re
just a local call away.
One particular kind of robotic troublemaker
that’s particularly disturbing can hijack not
just your address book, but your entire PC,
and convert it into a zombie to participate in
a distributed denial-of-service (DDOS) attack
against other computers. In effect, you become
an unwitting accomplice in a criminal offense.
A DDOS attack saturates a server with so many
requests that it slows down to a crawl, or gives
up altogether and hangs.
DDOS attacks are unfortunately platform-
independent, meaning they can hit Windows,
Macintosh, or *nix servers. Fortunately, there is
a defense against DDOS, and the Anino project,
based on OpenBSD, withstood DDOS attacks
in last year’s DefCon Manila. Also worthy of
mention is the fact that it was a Filipino team
that designed Anino.
78 hightechcrimes
“Vigilance, vigilance, and vigilance,” says dela
Cruz, “are the three most important weapons to
counter high-tech crime of any kind. You have
to ensure that you have the latest patches, and
even then, you should be wary of unexpected
occurrences, e.g., an email message even from
someone you know, with a file attachment that
you’re not expecting, or with an out-of-character
subject or body. A Subject: like ‘Re: project’ should
raise suspicions especially if, by convention, you
always mention the specific project that you
and a partner or associate are working on, e.g.,
‘Subject: Eddie Gil campaign’.”
Computer networks employ some form of
security to ensure that only authorized users
can get into the system. Hacking, as defined in
the E-Commerce Act, is unauthorized access of
a computer system. Purists will complain that
the act defined in the ECA is, strictly speaking,
cracking, not hacking. Hackers are highly skilled
techies who know more about the ins and outs of
computer systems, both hardware and software,
than the above-average user. They can do tricks
with even word processing programs that will
drop jaws.
Cracking, on the other hand, involves breaking into
a computer system to cause some harm: mainly
to steal or destroy data, or in the least malevolent
cases, leaving digital graffiti in the manner of
“Kilroy was here.” Website defacement has
become a high-profile manifestation of crackers.
“Again,” says dela Cruz, “vigilance, vigilance,
vigilance. Make sure that your servers are secure
by applying the latest patches not just to the OS
but to any application software that exposes your
server to the outside world. Web servers, telnet
or ftp daemons, instant messaging servers: make
sure that you subscribe to security alerts that will
inform you of any vulnerabilities in your server
software, and how to correct them. Telnet and
ftp daemons in particular are a bad idea because
they’re inherently unsafe. Use sshd (secure shell
daemon) or sftpd (secure FTP daemon) instead.
Then disable remote root login.”
Crackers exploit vulnerabilities in server software
to gain control of a computer. Such vulnerabilities
usually involve what’s known as buffer overflows,
where a command might exceed its programmer-
allocated length. The excess characters are not
discarded but get into the computer’s command
buffer where they might steal the user account
file, or maybe the file of website accounts.
“Regardless of the possibility that they might be
stolen due to a security hole, passwords are still

important. Impress upon your users the need
for secure, hard-to-guess passwords,” continues
dela Cruz.
“Words taken from any language are a bad idea.
Better to combine two words, and maybe separate
them with a punctuation mark or numeric digits
- maybe both. The system should also prompt
them regularly, maybe once every month or two,
for a password change.” “Perform a vulnerability
assessment of your system,” says dela Cruz.
“If you can, engage the services of white-hat
hackers.”
White-hat hackers are those who have the skills
to break into systems but choose not to use them
for nefarious ends. Instead, they identify possible
security holes in a system and recommend
measures to better secure the system. There are
some sites on the Internet that can conduct a
rudimentary remote vulnerability assessment of
your computers. This mostly involves checking
for open ports or insecure server software that
crackers might use to intrude into your system.
Unix and its variants (GNU/Linux, the BSDs),
have a command map that’ll check for your open
ports.
Whatever you use, close the ports that you don’t
need, or stop the services that you don’t need. For
instance, there’s little sense in running a POP or web
server on your home PC. In fact, the Acceptable
Use Policies (AUPs) of the broadband providers
prohibit the latter on residential accounts. For a
more in-depth vulnerability assessment though,
you’ll need the physical presence of a security
team. One question I asked dela Cruz was if there
were any documented cases of computer break-
ins. Normally, the victims of computer break-ins
would rather keep things quiet, because of the
perception of poor security. A stolen database is
a sure way to repel customers if the news broke
out. “Surprisingly,” answered dela Cruz, “there
have been documented cases. The LoveLetter
virus, even if it wasn’t a crime when Oniel de
Guzman allegedly let it out into the open, is
the prime example. The exposure even went
international.
Then there’s this Asian Pride group that owned
up to the defacement of several sites. There’s
also the Thames case.” A more recent case was
the credit card fraud case involving Yes! Pinoy.
I also heard on at least two occasions that the
Philippines was the hotbed for cracking. I found
that strange, because I saw the transcript of an
underground chat room for crackers. One of them
called Filipino crackers “lamerz”—i.e., amateurs
who don’t really know how to break into systems.
philippineinternetreview
I also asked dela Cruz about that. “Hotbed of
cracking activity? Yeah, I also heard about that.
But there’s nothing we’ve found to support that
allegation.”
Maybe the sources of those allegations have read
Gartner’s and the Meta Group’s reports about
the Philippines having the most qualified IT
professionals, and jumped to the conclusion that
Filipinos are the also most skilled crackers? But
that’s like saying that a sharpshooter will make
a good assassin. In any event, let’s look at some
real-life cases.
As the old classic love songs goes “Love letters
straight from the heart...” This one, however, came
straight from a computer, allegedly from that of
Oniel de Guzman, then a graduating student of
AMA Computer College. News reports indicate
that de Guzman submitted the virus as part of
his senior thesis, and that the panel rejected it,
denying de Guzman his college degree.
The circumstances surrounding its release are
still unclear, but what is clear is that it wrought
havoc on computers worldwide. The virus came
as an e-mail with the subject “I Love You” and a
file attachment that harbors a virus that searches
the user’s hard drive and erases all standard
graphic files: GIFs, JPEGs, BMPs, etc. That’s
just the beginning: it then sends itself to all the
addresses in your Outlook Express address book.
That’s how it was able to spread so quickly.
Ironically, it shouldn’t have been able to do
so if people were more suspicious about a
purported love letter from a stranger. Internet
users should’ve learned by now not to trust in
a mail message that has an attachment you’re
not expecting. In my case, the first copy I got
was from another male, and it was easy for me
to smell a rat. Others opened the attachment,
maybe out of curiosity. Whatever the reason
may be, the virus then opened up their Outlook
Express address books and spread itself, but not
before wiping out every graphic image file on the
hard drive. To repeat: it was easy to avoid Love
Letter and its variants, just be suspicious of all
attachments.
hightechcrimes 79
 philippineinternetreview
There was also a trick to foil a virus so it doesn’t
spread beyond your PC which involved entering a
dummy entry in your address book, and it should
begin with an exclamation point (!) to ensure that
it’ll be the first entry. The virus then will confine
itself to your PC, and you’ll have contained the
damage. It also pays to keep backups of your
most important files. A complete discussion of
backup strategies and devices is beyond the scope
of this article, but I do want to mention that both
CD burners and writeable CDs are cheap enough
to end all arguments about backing up.
Thumb drives, solid state devices that plug into a USB
port, are more expensive but have the advantage
of portability. Lastly, I would like to disagree with
the notion that Love Letter was a work of genius.
It was not, it was based on scripts that are widely
available in the computing underground.
The Thames International School of Business
stores its curricula and course materials,
including courseware, on its computer network.
A pair of former employees used their old
access codes to log on to the network and copy
the course materials. The case is now in court
so we can’t discuss it at length here.
Total Solutions Software, Inc. (TSSI) is a
subsidiary of YES Limited, a Hong Kong-
based IT company founded in 1988. In 2003,
TSSI launched www.YesPinoy.com, a Filipino
community website aimed at bringing together
Filipinos from all over the world and provide
them with a means to contact Filipinos both in
the homeland and those working abroad. The
service relevant to our discussion is YESPinoy
Send Money, which provides members a way to
send money to a SMART Money cardholder in the
Philippines using a credit card and an Internet
connection. YESPinoy also provides a mechanism
for members to order SMART Money Cards for
friends and family.
In the middle of October 2003, TSSI noticed
irregular activity within its computer system.
A number of YESPinoy members were sending
money to the same individual, some successfully,
but other transactions were not honored by the
credit card issuer. The registration details of
members who had allegedly sent money to the
same individual had details of persons in the US.
Oddly enough, their access point was, according
to TSSI’s audit trail, a Philippine Internet Service
80 hightechcrimes
Provider (ISP). TSSI then called some of the
US residents who were supposed to have been
sending money, and found that the latter had
never heard of YESPinoy and had no connections
with anyone here. With the cooperation of SMART
Telecommunications, TSSI found that the SMART
Money Card was drawing cash from Automated
Teller Machines (ATMs) in Quezon City. TSSI, after
further investigation, worked with the National
Bureau of Investigation (NBI) to conduct a sting
operation that resulted in the arrest of three
individuals who were detained at the NBI jail
and charged with violations of RA 8484 (Credit
Card Fraud), RA 8792 (E-Commerce Act), and
falsification of public documents and estafa under
the Revised Penal Code.
TSSI said the design of its software enabled them to
detect and trace the fraudulent transactions. The audit
trail’s revelation that members who were supposed
to be in the US but were using a Philippine ISP was
key to breaking the case. One thing that TSSI officials
wanted the public to know was that, when a credit
cardholder disputes a charge, the issuing bank will
decline the transaction and it’s the merchant who’s
left holding the bag. In this case, TSSI would take
the hit. It’s important to mention this, because those
who might intend to engage in a fraudulent credit
card transactions have to realize that it’s not the
issuing bank (e.g., Citibank or Standard Chartered)
that absorbs the loss, it’s the merchant. In this case,
TSSI had to account for the charges, which meant
that they were spending money that wasn’t coming
back to them, in contrast to the salaries they pay
their programmers. If there are enough declined
charges, TSSI could go out of business and their
Filipino programmers unemployed.
There’s much more to cover. I haven’t even
managed to mention other cybernasties. What I
can do is send you over to http://www.aoema.
org, which engages in educating the computing
public about viruses, trojans, and worms, spams,
Internet scams, and the like.
 philippineinternetreview

Albert “Abet” Pangilinan Dela Cruz

President, Philippine Computer
Emergency Response Team (PH-CERT)
Columnist, Entrepreneur and Consultant

Janette Toral (JT): Are there any significant
breakthroughs with the way we fight cyber
crime today?
Abet Dela Cruz (ADC): Most definitely.
People from all sectors including law
enforcement agencies are now very aware
of the dangers and implications of computer-
related crime. We have learned our lessons
very well and are taking proactive steps to
combat such.
The public has reached a level of
consciousness in IT that has made them aware
of both the benefits and consequent dangers of
using the computer and the Internet.
There’s big progress on the development
of awareness and technical know how of
our law enforcement agencies. It’s not
as great as first world countries but we
are definitely on our way up. I see major
efforts, despite the limited resources,
of our law enforcers to upgrade their
capabilities to acceptable levels. Various
cooperative efforts with the US and other
countries have been happening and have
lead to great strides in our effort to fight
computer related crime.
JT: Government is now disseminating posters
showing most wanted criminals, kidnappers,
and the likes. Do you think these wanted
posters will be on their websites soon?
ADC: That’s relatively easy. We now have law
enforcement websites up and running, and
that can be done in a jiffy. You’ll be surprised
on how the technical capabilities of some of
our investigators have improved. The only
problem is the lack of tools and equipment.
JT: Do you see our law enforcement entities
or courts having more ICT expertise in the
next 10 years?
ADC: Again my answer is on the affirmative
side. I see thatconcrete steps and efforts
are underway today as we speak. We have
a judiciary that is forward-looking and
very aware of the benefits of information
technology. We have good people in the law
enforcement sector, who either have or will
undergo training. I see foreign assistance for
our anti-cybercrime endeavors as well as full
support from our country’s leaders. We have
been at the bottom and there’s no way for us
to go but up.
JT: How technology-sophisticated do you
think criminals will be in the next 10 years?
Do you foresee organized crime or online
syndicates demanding protection money for
safe transactional environments?
ADC: The more information gets out on
the net, the more sophisticated everybody
will become, not just the bad guys but also
those who are out to catch them. The cat and
mouse scenario will still persist but the stakes
will indeed be higher and more complicated.
The group that will have the resources will
eventually win as progress in technology will
greatly speed up processes, applications,
and of course computing power will increase.
Speed spells the difference in a lot of things,
the more things you can do in a short span
of time, the more efficient and effective you
will be.
There is a possibility that indeed computer-
related crime will grow into a more organized
and systematic manner. With the progress in
technology, so goes the dangers as well, just
like anything else in life. We cannot discount
the possibility and all we can do is prepare
for it.

“Abet” is known for founding and being part of several successful

companies like Trends & Technologies, NetX, Wolfpac and Data
Networks &Defense. A few months after he starts a company, you’ll
hear a major corporation buying it. He also works hard in pushing
for IT advocacy becoming part of the e-commerce Subcommittee
of ITECC which churned out the Rules on Electronic Evidence. He
is also part of various private/public sector initiatives to promote
information security and IT in general.

hightechcrimes 81
 By Janette Toral

I t is amazing to know how the

Internet has empowered ordinary
individuals whose main craft is not
in the field of information technology
at all. This chapter features some of
them showing how the Internet can
empower Filipinos.
 philippineinternetreview
Science-Fiction / Comics Writer and Artist
Website: http://www.komikero.com
Mission: “Provide a means by which I could
share my artwork with the rest of the world.”
Gerry Alanguilan is well known for his expertise
in comics. His fiction work, like “Wasted,”easily
touches the heart of the reader and remembered
for years to come.
JT: Please give us a background about your
website and other endeavors.
GA: I have been drawing comics for several
years before the Internet hit it big in the mid 90s.
When I first surfed the web in 1996, I realized
its huge potential for better communication.
I resolved to put my portfolio
online for the purpose of finding
people who would like to hire
me for various projects. In that
regard, my online portfolio has
been quite successful because
I’ve gotten jobs through people
who hired me after visiting my
site.
I produce my art simply with
paper and any art tools I have
available placing ink on paper.
I use the computer only when
I need to send the art via the
Internet which consists of scanning and some
cleaning in Photoshop.
Being a comics artist, much of my time, effort
and concentration is directed towards that.
This is perhaps why I never changed my site
in terms of design and technology. I’ve yet to
master HTML, and I’m clueless when it comes
to things like Javascript and Flash. So I just try
to make my site as easy to navigate and as asy
to look at as possible.
JT: Does the Internet age mean the death of
personal privacy? Why?
GA: I’ve always been puzzled as to why people
are up in arms about “loss of privacy” on the
Internet. It doesn’t matter to me if people know
what my name is, what my e-mail address is or
my educational attainment. It doesn’t matter
to me if people know my hobbies, my favorite
movies, or the places I go to on the Internet.
How exactly can those things be used against
me, or used to take advantage of me? Spam?
Junk mail? So what? I can delete them all if I
84 peoplepower
want. It’s not like there’s a camera in my room
connected to the Internet monitored by the
government to see what I say and do 24 hours
a day. This issue of death of personal privacy
because you give up some personal details
online is a whole lot of bullshit. People find out
MORE about you in the trash you throw out of
your house. Why don’t people watch against
that?
JT: Do you worry about your obsolescence and
that of “speculative” or “exploratory” fiction?
GA: I don’t worry about it at all. I honestly
don’t know what the Internet can possibly do to
kill “speculative” fiction. A lot of people will still
want to read in spite of the Internet. And read
actual printed books no less. In spite of the
propagation of advanced albeit pirated versions
of Harry Potter and the Order of the Phoenix as
a passable PDF version online, people still went
in droves to buy the book, making it one of the
best selling books worldwide.
JT: What do you think will be the most
unexpected and spectacular impact of the
Internet in the next 10 years (circa 2004-
2014)? Why?
GA: I really can’t see that far ahead. I mean,
10 years ago who would have thought that the
Internet would explode in just a few years and
revolutionize communications forever? A lot of
people have made predictions before then and
none of them have mentioned the Internet. So
I’ll just wait to be surprised.
If I would have to hazard a guess, and mind
you this is just for fun speculation, something
that I could put in my comics... I see people
connected to the Internet ALL the time whether
they are at home or on the road. They would
carry their computers on a small device
attached to the arm. Young kids will make it
into a fashion accessory. Of course one can
do this with cellphones, but computers of the
future will be more sophisticated with a lot
more features than what cellphones today
can offer. Because speed would have risen
astronomically by then, downloading files, no
matter how big, will no longer be a problem.
People can watch movies anywhere they like,
 philippineinternetreview

listen to whatever music they want to hear. Of
course, piracy grows along with the growth of
technology so downloading free movies and
music will become more rampant.
Taking it even further... probably 50 years from
now, people will be able to enter the Internet
themselves and interact in a virtual community
which exists online. Information will come fast
and furious. No information in the world can be
hidden from anyone.
People will then continue to live in their
computers and a thousand years down the
line mankind will evolve even further. Human
bodies will physically shrink as reliance
to these diminish while brains grow as use
increase. In a few thousand years we would
have evolved into beings who are suspiciously
like the aliens we are so scared of in movies
like the X-Files.
JT: What type of person and what skills are
rewarded by an Internet dominated society?
I really have no idea. I think anyone can be
adept in whatever skills necessary to get a
handle on the Internet. But I do think those
who are NOT afraid of the computer (I was
once), and have the knowledge of it inside out
would do well.
JT: There are now portable e-book readers
in the market. Does this affect writers and
publishers?
I think the writers and publishers let it affect
them when it really shouldn’t. Like the Harry
Potter example I cited previously, PDF files of
the latest book have been circulating widely
months before the book came into print. And
yet when the book finally became available,
people STILL came in droves to buy it.

JT: Will the Internet change the struggles of love,
relationships, and interpersonal dynamics?
GA:It has certainly changed mine and not
exactly for the better. My wife is continuously
frustrated to find me online instead of being
on my desk working. Being online is very
addicting...and I think if this tool is not used
well (and evidence suggests it has not been
used well a lot), it does not bode well for the
future. It could build walls between people,
although it could also bring people together.
Lately I noticed people would tend to just e-
mail instead of call or meet personally. On
the other hand, it can also help maintain the
communication between two people who would
not have otherwise communicated because of
distance.
Maybe some writers opt to write books
specifically for the e-book format. But unless
the problem of piracy is solved, there is little
chance of it becoming profitable in the long
run.
JT: Do you think as downloadable titles and
literature become more available online in the
future, Filipino consumers will prefer reading
from such?
GA: Speaking strictly for myself, I wouldn’t. If
such books are not available elsewhere, I might
download it and print it so I can read it. But I
don’t see myself actually reading a book from
a computer.

Looking further at the positive side of it, the

Internet has brought people together. I am
part of two alumni mailing lists from my high
school and college. Through the mailing lists,
I managed to get in touch with people I would
not have otherwise have gotten in touch with if
there was no Internet.

JT: Write the first sentence for the novel or

short story you might write sometime after the
year 2014 and set it in cyberspace.

GA: Ever since he flew into town, everybody

was suspicious of him. Some were afraid, some
were curious, and a few wanted to kill him. He
was different. He looked different, and he acted
different. And unlike them, he was entirely
human.

peoplepower 85
 philippineinternetreview
Former Executive Director
Information Technology and
Electronic Commerce Council
Melissa “Toby” Monsod was a DTI Assistant
Secretary from 2000 to 2002. She is the first
Executive Director and laid the groundwork
of the Information Technology and E-
Commerce Council (ITECC) from July 2000
to April 2001.
She led the drafting of the Implementing
Rules and Regulations of the E-Commerce
Law. It was completed within 30 days from
the passage of the law.
Toby was greatly involved in the formulation
of the Internet Strategy of the Philippines
(ISP.COM) that focused the efforts of the
government and private sector in capturing
business opportunities in IT now referred
to as “E-Services Philippines” to generate
export revenues and employment for the
country.
86 peoplepower
By Juan Magdaraog
“The power of the Web is in its universality.
Access by everyone regardless of disability is
an essential aspect.”— Tim Berners-Lee, W3C
Director and inventor of the World Wide Web
For the first time in history
the technology is available
to level the playing field for
People With Disabilities
(PWD). The Internet, World
Wide Web and ICT in general
have empowered PWDs. I
should know. I’m one of those
empowered individuals.
I’m fortunate enough
to be living in the age of
information technology. A
time wherein the tools have
been developed where access
to information is virtually at
your fingertips. I’m also fortunate to have family
who encouraged me to learn and develop the skills
necessary to make use of the Internet and ICT.
My first experience surfing the Internet was
on a 486 PC with a 28.8 kbps modem. I was still
in college at that time. Even then the Internet
proved to be a big help. I had a difficult time going
to the library for research and to look for books.
The Internet opened a wealth of information that
was available from the comfort of my home and at
a click of a mouse button. Doing school work was
made easier because I had the information that I
needed.
I developed my skills on using the Internet
and other related technologies as time went by.
I didn’t have any computer related background
in college so I had to self-study and read a lot of
books on how computers and the Internet worked.
I decided on learning web design because I found
out that it’s something that I could do and is at
least somewhat related to the course I took in
college. I was able to
finish with a B.S in Industrial Design (Product
Design).
I spent a year after graduating from college
working in a small company my dad, cousin and
I put up. The company did multimedia and web
site development. It was there that I honed my
skills in web designing. After a year, I decided that
I would take a break from the company and try
to look for a job in another company. I wanted to
find out if companies would give PWDs a chance
and employ them.
 philippineinternetreview

I applied at several companies. Some of which easy. Now, access to information and doctors
did not give me a chance. I eventually found one are readily available. Websites and discussion
that did. After several interviews with HR and groups about it have also sprouted connecting
the Executive Director they decided to give me a patients all over the world. Patients can now
chance. Due to the nature of my work (web design) share information, experiences and ideas on how
the Executive Director agreed to allow me to work to deal with the illness. Support for patients and
from home or telecommute. I would report to the their families are made accessible because of it.
office once or twice a week for meetings. I regularly communicate with other patients and
The Internet and ICT played a significant role share with them thoughts about our situation.
in making this work arrangement possible. From dealing with the physical disability it has
At the start of the work day I would connect brought up to dealing with the emotional stress
to the Internet, log in to an instant messaging that have resulted due to it. I can truly say that
service, and download my e-mails. It was through the Internet has helped me a great deal in coping
instant messaging and e-mail that I had contact with my illness.
with people at work. My boss would e-mail me the In the virtual world we call the Internet,
work needed to be done and we would chat via opportunities are equalized for both people
instant messaging to clarify or discuss whatever with disabilities and those with out. While it is
needed to be talked about. I would then do my work true that some PWDs still have a difficult time
and upon completion use File Transfer Protocol accessing information through the Internet, it
(FTP) to upload it to our server. For almost two goes without saying that it is easier now than it
years this was my work arrangement. was several years ago. As technology progresses
Technology improved as time passed by. I it will become easier and easier for people
eventually upgraded to a DSL connection. This with disabilities, like those who have sensory
improved telecommuting a great deal since I was impairment, to make full use of the Internet and
able to stay online the whole day. Bigger bandwidth its power. It is therefore important to teach and
also made for faster downloads and viewing of equip PWDs with the knowledge and the facilities
richer content and media. Conferencing was also to make use of the Internet. It will surely open
made available—both group conferencing and doors and opportunities to live and work better.
voice conferencing. This improved communication I know, I have a better life because of it.
between the office and me.
I eventually left the company I worked for due
to the downturn in the economy. I was able to apply
the things that I’ve learned from that experience,
when I returned to the small company we put up.
Using the Internet, I was able to get clients from
abroad by communicating with them via the same
technologies I had used in my previous work.
At first my clients from abroad didn’t even know
I have a disability until I told them. They were
that
pleasantly surprised. If you meet me online, you
would not even think that I have a disability because
I’m as regular as the next person.
Apart from gaining access to work, the Internet
also opened the doors to communication to the
world. I’ve fostered new friendships with people
from all over the world as well as strengthen
old friendships. I communicate with them a lot
through e-mail and instant messaging. We’re
able to exchange photos, video conference, play
games and a whole lot more. The Internet has
truly opened the doors of the world for people.
Another important benefit that the Internet
has brought is the ability to search for people
and information that otherwise would prove to Juan Magdaraog is the Web Design Director for
be close to impossible. Due to the rarity of my Innov8, Inc. He also contributed to the book,
illness it has been difficult in the past to search “Reflections from a Different Journey. What Adults
for information about it much less doctors who with Disabilities Want All Parents to Know” (http://
specialize in treating it. The Internet made this www.disabilitiesbooks.com/reflections/index.html)

peoplepower 87
 philippineinternetreview
The Philippine Web Awards
Website: http://www.philippinewebawards.com
Mission: To recognize the best Philippine websites
on the Internet.
The Philippine Web Awards is the premiere
award-giving body that recognizes the best
Filipino websites on the Internet.
JT: Please give a background about yourself
and your Internet life.
HB: I have a parallel career in finance, having
worked in SGV and BPI. But I started using
the Internet in 1996 when I first wrote for PC
World Philippines, later penning its Web Watch
column where I reviewed the first few Filipino
websites then. Then PC World
included an insert, which I edited,
about website reviews, taken from
The Web magazine of the US. A
year later, WSCPC spun off The
Web Philippines, and I became the
editor. I served in that capacity
from 1997 to 2000, and resumed
in 2002, renaming and reformatting
the magazine into a business and
technology publication as Enterprise
magazine later that year.
I was also WSCPC’s Online Business Manager
from 2000 to 2002, launching and managing the
operations of our IT portal, ITnetcentral (http://
www.itnetcentral.com), and our publication
sites. In total, I’ve been using the Internet for
close to eight years. Given the nature of my
work, I’m online almost everyday for almost
the entire work day. The Internet, particularly
the Web and e-mail, are an integral part of my
professional and personal life.
JT: Can you give us a bit of history on how the
Philippine Web Awards started?
HB: The Philippine Web Awards (PWA) started
in 1998 as a project of The Web Philippines
magazine (now Enterprise magazine). It was
pattered after the Webby Awards of the US
(Webbys). The Web magazine in the US—
published by IDG (International Data Group),
of which WSCPC (WS Computer Publishing
Corporation, now Media G8Way Corporation) is
88 peoplepower
the Philippine licensee—launched the Webbys
in 1997.
As editor of The Web Philippines (http://www.
theweb.com.ph), I thought it was a good idea
to extend the mission of the magazine—which
is partly to recognize the growing number of
Filipino websites—to another format for a wider
audience. And the idea caught on.
JT: What is your role in the Philippine Web
Awards?
HB: During the first two years, I was
actively involved in practically all aspects—
conceptualizing the awards guidelines, inviting
judges, overseeing the judging process,
promoting the awards, even writing the script
of the awards night program!
Recently, I’ve taken a more consultative role,
as each area of organizing an awards program
has been delegated to specific committees.
There are different people handling the judging
process, the updating of the website, the
promotions, the event management, etc. I do
not have a direct hand or operating responsibility
in the entire process but I am always around
for consultation. I still do help in promoting the
awards through tri-media.
JT: Would you refer to the Philippine Web
Awards as the FAMAS for the Internet?
HB: Well, that’s how we billed it when we
launched it in 1997, since it’s a quick way
of getting people to understand what it’s all
about. While we no longer promote it as the
FAMAS for the Internet set, it still boils down to
an industry competition which awards the most
outstanding Filipino websites of the year.
JT: How did the Philippine Web Awards
mature/change year-after-year? What were the
significant changes/milestones?
HB: The first few years were naturally a learning
experience for us, given the ad hoc approach
we took. It was a way like an Internet startup—
bootstrapping and multitasking. We started in a
small venue (Hard Rock Café in Glorietta, Makati)
and later moved up to bigger ones (Shangri-La,
Meralco Theater, New World Hotel).

Every year, we fine-tuned the judging process,
making sure we cover loopholes. Definitely, the
set of judges we’ve invited have increasingly
become highly regarded, given their background
and reputation in the web development
community. We’ve had more and more judges
who are well-known internationally. So there
have been a lot less, if not no, complaints about
their credentials.
We’ve been working with different web
development companies for our website almost
every year, and we’ve certainly improved in
that regard. Their multimedia talents continue
to wow the crowd during the awards night with
their animated clips.
We’ve also done a better job in the People’s
Choice Awards segment, and last year we
introduced SMS voting as a way of expanding
further the audience of the PWA.
The awards night itself has become better-
organized and continues to be entertaining.
Some of the country’s top bands and artists
have performed at the PWA.
We changed the name from the Philippine
Webby Awards to the Philippine Web Awards
after seeking the advice of IDG. But it does
recognize and encourage our efforts.
Now that we’ve formed a separate events
group, we’ll be expanding the PWA franchise
to cover more areas and groups. We’ll also be
introducing ancillary activities such as seminars.
philippineinternetreview
We’re also looking into specific segments in the
ICT industry that we can spin off as separate
awards.
JT: People tend to say that awards like this are
all hype. Do you agree with that?
HB: In one sense, it is hype in that it puts the
spotlight on web developers. It’s the closest
thing to being a celebrity.
But there is substance to it, as it helps them in
terms of exposure and promotions, which may
lead to new business and career opportunities.
It also serves as a venue for promoting
best practices in web design, content, and
development.
JT: Why do sponsors support the Philippine
Web Awards?
HB: Primarily because they believe in the
concept. It also has that coolness factor which
they might want to be associated with. But more
than that, they want to be associated with the
promise of the Internet and New Media. They
know these web developers are at the cutting
edge of New Media and they want to support
this effort to recognize them.
JT: Is the awards going to be institutionalized
(or is it already)? Or will it just keep on moving
for as long as there are sponsors?
HB: It’s not institutionalized in the sense that
there’s a separate foundation or academy
running it, like the Academy Awards. But while
the actual operations reside with us, it has the
participation and support of the web community,
whose members are perennial screeners and
judges. In the end, it’s the web community,
along with some experts from other industries
that decide the winners. It’s peer competition if
you look at it that way.
And it’s practically a widely-recognized industry-
supported awards program, which has the same
credibility and support as awards programs
of other industries. Press releases, news
articles, brochures, annual reports, executive
speeches, and other promotional materials of
past winners--from the freelance web designer
to the Top 100 companies--all mention their
achievements from the PWA.
peoplepower 89
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90 peoplepower
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peoplepower 91
T
he timing seemed perfect: the
Philippines had just gotten a live
IP connection to the Internet, and
all the major IT industry think tanks—
Gartner, the Meta Group, Forrester­­—
were predicting that the Web would
generate billions of dollars in revenue.
Thus, we were all witness to the Gold
Rush of the 20th century, and this one
was on a global scale – anyone, even if
they only had a part-time (e.g., dial-up)
connection to the Internet needed only a
Web hosting service and a surfeit of guts
to take the plunge.
There was no shortage of venture
capitalists and angel investors with
bulging moneybags seeking out dotcoms
that would create the next generation of
millionaires. On the other hand, there
was no shortage either of Net-based
entrepreneurs looking to make their
millions on the Web. After all, a mere
fraction of the world’s 100 million users
could generate enough traffic to attract
advertisers into pouring in the money. At
least that was the theory. Unless you’ve
been living a hermit’s life on Mt. Banahaw,
you would know that Netrepreneurs
discovered—to their dismay—a yawning
gap between theory and practice.
Advertisers did fight for prime placement
on websites, and kept the dotcom boom
going. Unfortunately, they soon found
out that their ad placements were not
generating any sales. They might’ve
gotten some click-throughs, but too few
of those translated into transactions.
Advertisers realized that they were
paying for ad placements that weren’t
contributing to the bottom line, and the
decision to cut down on or altogether
eliminate Web advertising was a no-
brainer. Without this lifeblood, the
dotcoms collapsed, turning the dotboom
era into dotbomb, dotcrash, and other
similar labels.
There has been enough analyses about
the causes of the dotcom crash. A report
from Infoworld, however, is worth
mentioning mainly because it described
one of the pitfalls that successful
dotcoms avoided.
According to Infoworld, the dotcom
owners were living it up, buying the most
expensive Beamers and Rolexes, leasing
the most expensive and hightech office
spaces, and flying first class. Oddly
enough, this was the idea of the venture
capitalists or angel investors, who
wanted their wards to project an
image of profitability. Ironically,
that was one of the practices that
would prove their downfall. In
the so-called “new economy,”
old-economy rules still
applied: mainly, that people
still expected something
in return for money. I come
neither to bury dotcom, nor to
praise it.
Several writers have already
done both, the former perhaps
prematurely. What I do want to
do is look at those dotcoms that
survived the crash so that we
might remember their adherence
to old-economy rules and apply
them if we should dare a dotcom
venture ourselves. In particular,
I’d like to look at Philippine
dotcrash survivors in the hopes
that some enterprising Pinoys
might shrug off the dot-bomb
shakes and come up with a
working revenue model for
a dotcom. Rather than go
mile-wide and inch-deep, I
intend to look closely at two
dotcoms: a high-profile and
a silent operator. The former
is a webmail provider, the
second an online shop. By Daniel Escasa
 philippineinternetreview
SMEs Trailblazing with E-Commerce
By Janette Toral
The Philippine Internet Commerce Society launched
the PICS-SME IT Excellence Awards for its 2nd
National E-commerce Congress (2003). It aimed
to recognize SMEs who have managed to utilize
information technology and e-business best
practices in their operations - and have managed
to gain benefits in terms of profitability, savings,
efficiency, customer relations, supplier relations and
other relevant metrics. We’re featuring three of the
nominated companies here.
Godiva Natural Skin Care
http://www.godivaskincare.com
Godiva Natural Skin Care won the PICS-SME IT
Excellence Awards. The company is well known for
its innovation in the skin whitening market.
Godiva Licorice Skin Whiteners enjoy high
customer satisfaction. It uses only purified licorice
with the highest glabridin content (40%), a product
of the latest, state-of-the-art Japanese isolation and
purification technology.
GODIVA, Inc. has introduced new and exciting
natural skin care products to the international
market. These products are now being imitated
by global brands. GODIVA has been using purified
licorice as an active ingredient since 1996, long
before international well-known brands have started
doing so.
The company has two websites namely http://
www.godivaskincare.com and http://www.i-godiva.
com. It has developed loyal clientele from the United
States, Canada, Britain, Australia, and Japan. As early
as 2002, the company makes up to US$3,000 per
month.
Godiva’s online revenues kept getting better, with
every month considered as a sales record breaker.
The company has also rolled out an e-commerce
promotional program where big-ticket and frequent-
buyer clients are encouraged to make money by
partnering with GODIVA as a distributor.
The present scheme provides prospective
distributors 50% discount on online store rates, for
a minimum purchase of US$1,000 worth of GODIVA
products.
94 blazingglory
Thus, interested companies shell out US$500 for
the US$1,000 worth of products. GODIVA Natural
Skin Care assumes shipping cost as an added
incentive to these distributors.
The program, if successfully done, will lead to
a steady increase in sales to a level of US$50,000
monthly.
Regional Foods Marketing
http://www.bangus-online.com
Regional Foods Marketing is in the business
of de-boning and distribution of Bonuan bangus
(milkfish). It was established in 1999 and acted as
the exclusive distributor of Bonuan Boneless Bangus
products. Due to the clamor of various independent
distributors, it established its first factory outlet at
OPN Center Commonwealth Ave. Quezon City. The
factory outlet also serves as a showroom and pick-
up station for independent dealers who are currently
distributing its products.
The company’s website, http://www.bangus-online.
com, is the only bangus store on the Internet.
Through the awareness he was able to built, the
company now exports to Abu Dhabi.
Hulsey believes that Internet selling is the thing
of the future. He explained, “You can reach a lot of
people all over the world with just one website. You
can send your sales copy to a number of segments
with one click of the mouse, unlike before where
you’ll be mailing expensive brochures. Internet
marketing, the job gets easier with less cost, which
is very important to an SME. Let the computer do the
selling.”
Worldnet Achievers Consultancy
http://www.worldnetachievers.com
Worldnet Achievers Consultancy Co. Ltd. is a tax
auditing firm handling the bookkeeping and other
tax-related services of a huge base of clients. The
firm has been in the field of tax consultancy and
business management services since the late 40s.
Its website, http://www.worldnetachievers.com,
is used by clients to access their records conveniently
and in a secured manner. For Worldnet’s clients,
the ability to check and update current tax and
government records online are important.

PinoyMail.com
All experts say that e-mail is the most popular
application on the Internet, not only in terms of
penetration (i.e., percentage of Internet users
using it), but also in terms of traffic. Therefore,
e-mail is a strong potential source of revenue.
As a result, there is a proliferation of free web-
based e-mail services. There were three major
sources of these mail providers.
There were the stand-alone services whose main
offering was the mail service. Into this category
are iname.com (since renamed to mail.com),
graffiti.net, fastmail.fm, and several others you
should be able to find on search engines. And,
just in case you think I forgot, there’s hotmail.
com, which attracted enough attention to earn
a purchase of the business from Microsoft. I
should also mention that, while mail is the
primary offering, some services also feature
amenities like discussion groups—graffiti.net is
one such site. The second source was the so-
called portal which allowed one to customize
entry point into the site. The biggest and most
prominent example is Yahoo!, which delivers
news, a search engine, and mailing lists, among
others. Another popular example is Lycos. The
third source was the site whose main offering
was some other service that gave out e-mail
addresses as a bonus.
The International Data Group (IDG) gave out
idgnetmail.com e-mail addresses. In a few
cases, these sites managed the web mail
service themselves, although many preferred
to outsource to mail.com, OutBlaze, and other
dedicated mail providers. Now for the puzzling
part of this equation: if mail providers saw e-
mail as a major revenue generator, how did they
make money? Of course, they had advertising
support, but one of the most striking lessons
from the dotcrash was that advertising could
philippineinternetreview
only go so far. As an aside, and for what it’s
worth, many of Yahoo!’s ads are in-house (i.e.,
about Yahoo!’s other services).
The answer here is premium services. You can
choose from one of several dozen free mail
domains from mail.com, but you can get a
“cooler” address, one more indicative of your
occupation or personality, for about US$20 a
year. In addition, mail.com also charges for
mail forwarding, which automatically sends
your mail.com messages to another mailbox of
your choice. This saves you from ever having
to visit the website, which assaults you with
ads for classmates.com in the form of pop-
unders and interrupts. There is, however, a
price—literally—for getting rid of those ads. You
can also pay extra for more storage, which is
a good idea if you want to keep some mail on
their servers. With regards to hotmaiL.com and
Yahoo!, you can pay extra for POP (Post Office
Protocol) access so you can read your mail
from your favorite mail client, e.g., Eudora or
Ximian’s Evolution. You can check external POP
mailboxes from Yahoo! for free and. For a fee,
Yahoo! allows you to send out mail using your
ID from those external POP accounts. Yahoo!
also gives out additional storage for as low as
US$9.99 a year. fastmail.fm also provides this
free service, although fastmail.fm’s IMAP is free,
and they also have premium services that give
you more storage, or more e-mail addresses.
Lastly, graffiti.net’s premium services consist of
IMAP access and more storage. Of the dozens
of free mail providers I tried, only one has
dropped out altogether, a sign that free e-mail
can be a profitable proposition. On the other
hand, graffiti.net has slowly revised its charging
structure—IMAP access used to be free, but it’s
a premium service now.
That’s not necessarily a sign of trouble
that graffiti.net might be experiencing, just
the natural adjustments that any business
undergoes. The bottom line is that free mail,
like any other business, needs a sound revenue
model. This was what was on the mind of
Dominick “Dom” Danao when he founded
PinoyMail.com. He knew, even before the dot-
com crash, that excessive reliance on revenues
from advertising was an invitation to disaster.
He therefore looked at corporations that might
need e-mail but could not justify a full-blown
IT department just to have an email service.
No matter how much money you have, you
don’t spend it on something that’s not cost-
effective. An IT department whose only
function is to manage e-mail is an overkill.
blazingglory 95
 philippineinternetreview
You’d have to look for other jobs for them to
do. Your information processing needs – which
may or may not include e-mail – should weigh
in your decision to set up an IT department.
“There are, for example, all these law offices
with lots of money but not much in the way
of information processing requirements,” says
Danao. “Maybe their IT needs are met by office
suites or other canned software. One day, they
decide that e-mail would be beneficial for them.
But that’s their only urgent IT need, and is not
enough reason to set up a full IT department.
That’s where we come in. We set them up for
as many e-mail addresses as they need for
their staff, and they’re good to go.” Yet, it’s not
only cash-rich law offices that can benefit from
outsourcing their e-mail. “Schools are among
our target market for our corporate mail service,”
continues Danao. “For example, we gave Centro
Escolar University (CEU) 3,000 e-mail accounts.
It didn’t even cost the students any significant
increase in their fees, because CEU incorporated
the charge into their computer lab fees. We did
a study that convinced them that it was more
cost-effective to outsource their e-mail to us
rather than do it themselves, either through an
IT department or through some team (possibly
one-person) of part-time mail administrators. In
fact, regardless of the size of the organization,
we can demonstrate the cost-effectiveness of
outsourcing vis-a-vis an in-house administered
e-mail system.” Obviously, PinoyMail won’t turn
down advertisers. Danao notes that Citibank,
one of PinoyMail’s first advertisers, continues to
place advertisements there. “Apparently, they
get enough business from our users to justify
their continued presence,” says Danao. Still,
PinoyMail won’t fold up if all their advertisers
suddenly pulls out because the corporate mail
service is the center of its revenue model. As
an aside, PinoyMail practices what it preaches:
the philosophy of cost-effective solutions and
not spending more than one has to.
PinoyMail’s success didn’t escape the notice of
the industry, and that of Alfonso “Doy” Vea
in particular. Vea found PinoyMail so attractive
that he offered Danao “a cheque representing
more money than I had seen my entire life,”
recalls Danao. Vea’s purchase was a sign of
the confidence he had in the foundations laid
by Danao, and of the potential that might
have escaped even Danao. On the other hand,
it meant that Danao would lose operational
control over PinoyMail. On that note, Danao
could not hide his disappointment. “I had
this vision of the PinoyMail engine becoming
a serious competitor of Microsoft Exchange
Server—shared folders, workgroup-oriented
96 blazingglory
calendaring, electronic routing of forms, the
works. The technical enhancements would’ve
cost only a fraction of the competitor’s current
marketing budget, yet management could not
provide anything for development. But that’s
the way it goes when you cede control. I respect
the new management’s decision to concentrate
more on marketing than development.” Still,
Vea’s purchase of PinoyMail made Danao one
of the first Philippine dotcom millionaires,
if not the first. Although PinoyMail is under
new management, the old economy habits
that Danao instilled will ensure that PinoyMail
remains profitable for many years to come. At
this point, there’s the inevitable comparison
between PinoyMail and EDSAmail. Although
the two employ different technologies, their
philosophies and marketing strategies are
similar. PinoyMail requires its users to have
some form of Internet access, either at home,
at the office (subject to the Acceptable Use
Policy, or AUP), or at a Net café. EDSAmail, on
the other hand, only requires a modem. Where
PinoyMail users access their mailboxes through
PinoyMail’s Webmail interface, EDSAmail has a
dedicated Windows-only client that dials up to
EDSAmail’s servers and retrieves mail and sends
out any pending messages from the user’s PC.
Those who are familiar with the Offline Mail
Readers (OMRs) that were popular among users
of electronic Bulletin Board Systems (BBSes)
should experience déjà vu with EDSAmail.
EDSAmail, like PinoyMail, started during the
early days of the Internet in the Philippines,
when Internet penetration was still low and
still fairly expensive. A dedicated dial-up client
independent of an ISP therefore made sense.
Even today, you can’t beat EDSAmail on price,
especially if you don’t care all that much for
Web surfing, friendster, or streaming media,
and need only basic e-mail.
 philippineinternetreview

KabayanCentral.com
Spotlight
The IT industry think-tanks’ predictions on
billions of dollars worth of business on the Jovel Cipriano
Internet were anchored in large part on e- PinoyDelikasi.com
commerce, specifically online business-to-
consumer (b2c) storefronts which housed, Jovel Cipriano is well known for being the
electronically, goods and services for Internet entrepreneur behind PinoyDelikasi.com (http://
users to purchase. Thus, Jeff Bezos put up www.pinoydelikasi.com), a web site that sells
amazon.com, and several others followed. Once Filipino delicacies—like danggit, dried pusit, dried
again, though, traditional economic practices mangoes, tuna belly, among others—online.
still applied in the new economy. The new part
of the deal was in the payment system, where
buyers had a choice of credit card payment
or, later, in electronic money in the form of
payment gateways such as PayPal. On the other
hand, maintaining inventory and delivering to
the customer within a reasonable time were old
rules that were not going away—not ever.

Prior to this venture, he worked for IBM

Philippines for five years handling its Visayas-
Mindanao operations. On August 2000, he decided
to give up his IBM job to focus on PinoyDelikasi.
com, giving it 100% of his time. The idea for
PinoyDelikasi.com began in March 1999. It went
online on January 2000.
From a simple shopping
site, Jovel was able to build
Speaking of payment gateways, one of the
a distribution network to
challenges facing potential Netrepreneurs
other countries that enabled
was a means of accepting payments. Credit
him to deliver PinoyDelikasi
cards were – and probably still are – the most
products efficiently. Jovel
popular payment scheme. However, credit card
believes that for as long
merchant accounts still required a considerable
as one has the passion in
amount of work, and not just anybody could
what they’re doing, nothing
get one. Thus, if I put something up for bid on
can stop success from
ebay, just about the only way for the winning
happening.
bidder to pay me was to go to the bank and
Despite problems in
order a money transfer, since I don’t expect
logistics, online payments,
to be able to get a merchant account. On the
export restriction of Filipino
other hand, if I were to put up a Web storefront,
delicacies, and encountering
I may just have to bite the bullet and apply
unethical distributors, he
for a merchant account. Over the years, many
enjoyed the recognition and fame accorded to
electronic money services have sprung up that
PinoyDelikasi.com by various sectors as he got
allowed anybody with an e-mail address to send
invited in various events to share his story. His
and receive money electronically. This meant
site was also featured in international publications
that PayPal users could send money to other
and got nominated for several awards.
PayPal users, in much the same way that you
Apart from running his export business, he
might pay me out of your wallet, face to face,
now does consulting as well for companies who
for a used cell phone I might be selling. The
are planning to put up their own dotcom site.
aforementioned PayPal was among the first,
and remains the most well-known.

blazingglory 97
 philippineinternetreview
Similar to what happened with success stories
involving small companies, PayPal was purchased
by Amazon.com. PayPal and similar electronic
money remittance services were meant mainly
for non-merchant Internet users who needed
to get paid for goods or services. For instance,
independent programmers who work from home,
or away from their customers’ premises, could
benefit from a PayPal account. All their clients
have to do is pay them through PayPal, which will
then credit the programmers’ PayPal accounts.
PayPal also has a merchant account set-up. If US-
based netrepreneurs had to contend with setting
up payment gateways, the challenge for RP Web
merchants was an order of magnitude higher. In the
early days of Internet commerce, local banks were
slow to give out merchant accounts. If a Philippine-
owned storefront wanted a merchant account, it
was easier to get one from a foreign bank.
However, that meant a time frame of three months
for the issuing bank to transfer the credit to their
accounts. Today, merchant accounts are a bit easier
to get from local banks. On the other hand, payment
gateways like PayPal are in fierce competition with
credit cards, and there’s still a sizable number of
Internet shoppers with PayPal accounts who prefer
to use those over credit cards. Thus, a PayPal
account is a must. Unfortunately, the Philippines is
on the list of countries where PayPal doesn’t operate.
The reason, without elaborating, Paypal gave on its
web site is “local banking laws.” Another payment
gateway is StormPay, which used to accept users
with Philippine addresses. However, a year or two
ago, StormPay struck the Philippines from the list
of acceptable countries, citing the prevalence of
credit card fraud, and cancelled all accounts with
Philippine addresses.
These were the challenges facing KabayanCentral.
In fact, they had barely begun operations, as
tatakpinoy.com, when they faced a legal challenge:
a San Francisco resident was claiming rights over the
domain tatakpinoy.com, and threatened a lawsuit.
“He wasn’t even Filipino, as far as I remember,”
says Armin Santiaguel, who replied to my mail
addressed to info@kabayancentral.com. “We talked
it over, and one of us was so agitated that he wanted
to fight it out. After all, he said half in jest, if the
domain claimant wanted to sue us, he’d have to work
for our US visas so we could appear in court. In the
end, we decided that it wasn’t worth it, and gave up
the domain. We didn’t even receive reimbursement
for our domain registration expenses. We just just
had to write it off as a loss.” If you visit Kabayan
Central’s website, you’ll find that they accept the
usual major credit cards, and PayPal as well. “One
of our partners set up an office in the US so getting
merchant and PayPal accounts would be easier. Or,
98 blazingglory
in the case of PayPal, possible,” says Santiaguel.
(Remember that PayPal doesn’t accept Philippine-
based accounts.) “It didn’t really cost us anything
extra because he was there already anyway.”
Although Santiaguel replies to the webmaster and
info@kabayancentral.com addresses, he’s much
more than a webmaster. He’s actually functioning
as the head of the Manila operations, supervising
two messengers. He also does customer support,
which consists mainly of questions about deliveries
and debited credit cards against goods that hadn’t
been delivered yet.
He sends off the two messengers from a rented
two-story apartment in Kapitolyo, Pasig City to the
malls, primarily Megamall in nearby Mandaluyong
City, to buy the goods ordered by their customers,
then pack them for shipping. Although they pay
retail prices, they don’t have to maintain inventory,
so the margin of retail over wholesale just about
evens out with what inventory would’ve cost them.
The PhP15,000 they pay for rental of the apartment,
the cable Internet connection, Web hosting, the
wages of the messengers, and Santiaguel’s own pay
constitute much of Kabayan Central’s overhead.
“We don’t need a fancy office in some expensive
business district like Makati’s CBD (Central
Business District), the Ortigas Center, Eastwood,
or Bonifacio,” says Santiaguel. “We don’t ever need
to entertain visitors. We don’t have any wholesale
deals with Vicor or Viva, or with any of the publishing
companies. We don’t entertain customers either,
because they’re in the US. We don’t have a local
market.” Kabayan Central sells just about anything
Filipino: mainly books, and audio and video discs.
“Video discs of classic Filipino films are popular, as
are audio CDs of both contemporary and classic
Filipino music,” says Santiaguel. “Cookbooks with
recipes of Philippine cuisine also sell well.” Kabayan
Central has found itself a market of Filipinos in the
US. Fil-Ams also frequent the online store. “We
found that second- or third-generation Filipinos
are curious about the homeland of their ancestors,
especially the culture and the cuisine,” continues
Santiaguel. “That explains the popularity of audio
and video discs, and of cookbooks.”
Kabayan Central’s US-centric marketing explains
why hardly anyone has heard of them here. They
didn’t have any high-profile launches in glitzy
hotels, or full-page, full-color ads in any of the
local publications. They haven’t even issued any
press releases. At least I had an excuse when I
first admitted to Santiaguel that I hadn’t heard
of them until I read a post in internetreview.ph.
“If we were to place ads, it would be in the US
media,” says Santiaguel, “since that’s our market.
We did purchase a sponsored link from Google

and looksmart, which cost us about US$70 a
month. We could probably launch a major media
campaign in the US and possibly get us more
customers, but we’re not sure we want to do that.
We’ve been going back and forth over the issue
in the past few years and never really decided to
do anything but stay put. Anyway, we’re covering
our expenses, and pulling a decent profit.” The
business model seems too simple to be true.
However, it does work, and in fact, Kabayan
Central doesn’t have any exclusivity rights over
the model. “divisoria.com, for one, employs the
same system,” says Santiaguel. “The times I have
to hit the malls myself, I might run into my friends
from divisoria.com and we’d greet each other with
snickers because we both know what the other
is doing there.” So, can anyone else build an e-
commerce site around the same model? “Sure,”
says Santiaguel. “Aside from Kabayan Central,
there’s also divisoria.com that operates under the
same system. There might be one or two others,
or maybe even dozens of others that we haven’t
heard of, working quietly in the US, or maybe
even outside of North America.
There’s a large number of Filipinos, both expats and
immigrants, in Australia and New Zealand. Both are
promising markets.” Not everyone though will win a
“Netscape Open Directory Cool Site” citation but that
shouldn’t stop or discourage those who just want to
make some money on the Web. Hey, how many jobs
do you know of that involve shopping at Megamall?
Kabayan Central has since launched new services.
One of them, called e-kain.com, lets Filipinos in the
US treat their Philippine-based families and friends
to a banquet. They choose from among several
restaurants with their respective menus, fill in the
name, address, and phone number of the Philippine
beneficiary and the date and time of the banquet,
then supply their credit card or PayPal number. In
order to protect against credit card or PayPal fraud,
Santiaguel calls the Philippine resident to ensure
that someone will pay for the meal in case the credit
card charges are declined or repudiated. Kabayan
philippineinternetreview
Chikka.com
Given its minimal capital in the beginning,
Chikka.com started during the dotcom bust.
However, customer service, innovation, and
good technology are the company’s competitive
advantage. The company protected its initial
competitive advantage, the Chikka.com Instant
Messaging solution, by patenting it.
Dennis Mendiola, CEO of Chikka.com,
strongly protects value in the chain by building
on businesses that are related in nature, where
community begets community. Having the first
advantage will make it expensive for rivals to get
to the same level as where Chikka.com is now.
Dennis’ business wisdom was greatly influenced
by his experience in eRegalo.com (http://www.
eregalo.com). It taught him to manage his operating
cash flow, have financial discipline, prudence, and
sensibility in making projections.
Chikka.com is expected to scale up further
in the next 10 years because of its technology,
knowledge, and rich implementation experience,
on how to conduct Internet and mobile marketing
the right way.
Instead of doing everything on its own, it is
expanding through franchising by finding local
counterparts in immediate target markets. As of
this writing, the company has operations and/or
subsidiary in China, Indonesia, Thailand, Hong Kong,
and United States like Guam, among others.
Chikka.com is driving and pulling the SMS
market place forward. It plays a great role on what
makes the Philippines the most sophisticated and
advanced SMS user in the world today.
blazingglory 99
 philippineinternetreview
Jay Frank De Jesus
Titik Pilipino- The Online Resource for Filipino Songs
Titik Pilipino.com started as a lyric server for Original
Pilipino Music (OPM). With issues on intellectual
property rights and Jay’s respect for the copyrights
of the Filipino Artists, Titik Pilipino.com has now
evolved to encompass more information about
Filipino songs, artists and the albums.
It now includes, album information
such as track, artist, composer, lyricist,
arranger and producer listings in a
fully searchable database. Jay initially
gathered all this in extensive research
through old albums, cassettes and
CDs from all over. Now, record labels
provide most of the album info.
In relation with local Music labels,
Titik Pilipino has of a section on music
news covering album releases, concerts,
events, album and artist awards. This is
complemented by an artist discussion forum that lists
more than 500 Filipino artists, with info such as songs
released, official website, and trivia.
The site has developed quite a following. It
currently receives a daily average of 5,000 visitors
with 40,000 page views. For 2003, the site has
received a total of over a million visitors and
7.2 million page views comprised of visits from
Filipinos based in the United States, Japan,Canada,
Australia, Saudi Arabia, United Kingdom and 100
other countries around the globe.
For the past five years, Titik Pilipino also has
been a consistent finalist in the Philippine Web
Awards Music Category. In 2003, Titik Pilipino won
the Best Philippine Music Site Award.
What’s next for Titik Pilipino? The site currently
has numerous e-commerce functions that allow
visitors to buy music CDs online. Jay promises
more to come for the Filipino music lover.
100 blazingglory
Central also has a grocery delivery service where
a US resident may order and pay for groceries on
behalf of a Philippine resident, for delivery to the
latter. If you have relatives in the US, you might
drop a few hints and ask them to visit http://www.
kabayancentral.com – I’m sure Santiaguel and his
partners will be happy to attend to them. A discussion
of Philippine dotcoms wouldn’t be complete without
mentioning yehey.com – the inspiration should be
obvious. Yehey has gone beyond its search engine
and directory services and created PayPlus, which
allows depositors of the Bancnet consortium of
banks to use their ATM cards to pay at accredited
sites. There are also a few unknown sites that give
foreign customers a video or audio-only chat with
Filipinas – and no, there’s no pornography involved,
just wholesome conversation. Some sites have
integrated the ubiquitous cell phone with their
website, the most prominent being the instant
messaging provider Chikka.
Chikka is a Windows client that can exchange
messages with cell phones. On the cell, the message
shows up as an SMS (Short Messaging Service), and
on the Windows client, as an instant message.
Bidshot.com also uses the cell phone, first to
send a password or activation code, and then
sends answers to potential buyers’ questions to
the user’s cell phone. The seller can then reply
to bidshot’s gateway, which will forward the reply
to the potential buyer’s handset. No matter what
kind of business you decide to put up on the
Web, remember that cell phone penetration in
the Philippines is approximately five times that of
the Internet, and so it pays to incorporate some
gateway between your site and all three cellular
networks, if possible. Lastly, remember that,
while it is a new economy, old economy rules still
apply.
Advocacy and Politics Online:
A New Media

T he Internet gave an accessible platform

to Filipinos in meriting support for
their advocacy. Some were even able
to advance their current programs by
integrating ICT as soon as they realize its
benefits. Here are some examples in this
area.
 philippineinternetreview
Caring for Filipinos with Special Needs
Visual impairment is one of the most prevalent
disabilities in the Philippines. According to the
2000 census, 942,098 Filipinos have some
type of disability. Individuals with low vision,
at 37.41%, top the list followed by partial
blindness at 8.14%.
Despite the fact that technology is now
available for people with eyesight disability,
many can still not afford it. Computers donated
to various schools don’t have any provision to
enable this special type of access. In the next 10
years, making ICT useful to people with special
needs is a task that needs to be addressed as
well.
IBM Computer Eyes Program
In June 2001, the Resources for the Blind (RBI)
approached IBM with a request to provide
training facilities and technology for the first
national computer camp for blind students.
104 advocacyandpolitics
In its humble efforts, 53 students were able
to participate from 2001 to 2003. IBM loaned
21 computers and allowed use of its training
classrooms. The software IBM Home Page
Reader, a web browser reader, was also used.
Students were taught computer skills, word
processing, e-mail, Internet use, and website
design and publishing, aided by a screen reader
program that speaks, through the sound card,
whatever text is displayed on the screen.
Web pages of the students can be viewed at
http://www.cyberhip.ph.
ATRIEV (Adaptive Technology for
Rehabilitation, Integration and Empowerment of
the Visually Impaired) fielded a blind instructor
for the camp. They eventually placed a blind
graduate in IBM’s on-the-job training program.
Content for Children
Philippine Schools Cyberfair Project
http://www.cyberfair.ph
One of the common problems identified today
include minors age 18 and below having a hard
time finding educational resources suitable to
their academic requirements on the Internet.
Even with the growing number of Internet cafés
and computer facilities, the lack of educational
content prevents the youth from maximizing
its use.
The Philippine Schools CyberFair Project
is a learning program, envisioned to be used
by elementary and high school institutions
nationwide—for students to conduct research
about their local communities and publish
their findings on the Internet.
It is intended to complement subjects such
as English, Social Studies, Computer Education,
and Practical Arts, among others.
Prizes are awarded to schools for the
best entries in each of eight categories: local
leaders, businesses, community organizations,
historical landmarks, environment, music, art,
and local specialties.
This contest encourages students to become
ambassadors for their own local communities by
working collaboratively with community members
and using technology tools to publish a website
that displays what they have learned. The contest
will involve students from different schools all over
 philippineinternetreview

the Philippines—the largest national cyber-event Local attractions award

for schools. WINNER
To date, the PSCP is the only cultural Internet- Don Bosco Makati
based competition in the Philippine meant to The Philippines - 7100 Times beyond Expectations
empower and educate students in elementary http://dbti.edu.ph/7100islands
and high school. It focuses on content that will Runner-up
bring children to value their country’s natural Bislig City National High School
resource, people and heritage. The Natural Wonders of Bislig City
http://www.angelfire.com/folk/bislighi/
Close to 1,000 students and teachers from

all over the Philippines participated in the 2002-
Local music & art form award
2004 edition of this competition.
WINNER
All Philippine entries shall also join the Bayugan National Comprehensive High School
International School CyberFair (http://www. Naliyagan Festival: Enjoy, Explore and Discover
globalschoolhouse.org/cf), described as the the Pride of Agusan del Sur
largest educational event of its kind ever held http://www.angelfire.com/clone2/naliyagan/first.htm
on the Internet. This program has brought
together more than one million students from Community groups & special populations award
over 100 countries. Six Philippine schools also WINNER
won recognition in the international competition STI Academy High School
in 2002 and 2003. The Calling
http://www.aloofhosting.com/dcalling/
Runner-up
Claret School of Quezon City
Sibol: Beyond the Walls
http://www.geocities.com/claret_webteam/
SIBOL/
Honorable mention
De La Salle Zobel
The Z in MuZic
http://muzic.overtranced.net/

Business & Organizations
WINNER
De La Salle Araneta
Malabon: The Cradle of United Business
Entrepreneurs
http://www.malaboncube.tk/
Honorable mention
Roosevelt College Quirino
RCQ’s CyberFlair...the Genre
http://www.rcquirino.tripod.com/

Local specialties
2004 Awardees WINNER
March 29, 2004 St. Mary’s College of Meycauayan
Makati Sports Club Makati City Meycauyan’s Pride
http://www.geocities.com/meycauayanpride/
Environmental Awareness Awards Honorable mention
WINNERS Liceo de Cagayan University
Zamboanga City High School CDO Night Café
Main’s 3 R’s of Zamboanga City http://cdonightcafe.tripod.com/
http://www.geocities.com/zchscyberfair2004
MSC High School
Sampalok Lake..Paradise Lost..Paradise Reborn
http://warlock.msc.net.ph/cyberfair_2004/
Runner-up
Antique National High School
Laragway
http://202.91.162.51/websites/
antiquehigh/2004/index.htm

advocacyandpolitics 105
 philippineinternetreview

2003 Awardees Environmental Awareness Award

March 28, 2003 WINNER
Traders Hotel, Pasay City Liceo de Cagayan University
Cagayan de Oro River
http://www.angelfire.com/blues2/river/home.html

Local Specialties Award

WINNER
MSC High School
PASALUBONG from the City of San Pablo
http://warlock.msc.net.ph/CyberFair_entry_03
2nd Place
St. Benedict College
Paete
http://www.stbenedict.edu/CyberFair/paete/index.htm

2002 Awardees
Web Philippines, Inc. Local Leaders Award March 28, 2002
WINNER Glorietta Center, Makati City
De La Salle - Araneta University
‘POOLiticos’
http://www.geocities.com/pooliticos2002
2nd place
Zamboanga City High School Main
ZAMBOANGA LEADERS - Then... & Now...
http://www.geocities.com/zchsCyberFair
Honorable Mention
Philippine Cultural High School
Pillars of Philippines
http://www.pchsonline.org/philweb/
Philippine Daily Inquirer Environmental
VCTI-IT Community Groups and Special
Awareness and Issues Award
Population Award
Catanduanes State Colleges
WINNER
Agojo Marine Park and Sanctuary
Claret School of Quezon City
http://www.geocities.com/ampsanctuary/
Claret School Associates In Social Involvement
Website
Eastern Telecoms Historical Landmarks Award
http://www.geocities.com/claretschool_asin
Jubilee Christian Academy
Honorable Mention
EDSA. One Nation with One Voice.
Don Bosco Technical Institute - Makati City
http://www.edsa.schoolreference.com/
Salesians of Don Bosco
http://salesiansofdb.tripod.com
INQ7.Net Businesses and Organizations Award
Leyte National High School
Mapua IT Center Local Attractions Award
Pintados-Kasadyaan
WINNERS
http://lnhs.CyberFair.ph/
Antique National School
Antique’s Treasures
Local Attractions (Natural and Man Made) Award
http://antiquehigh.CyberFair.ph
MSC High School
Holy Trinity College
San Pablo City (City of Seven Lakes) ... Streets
Discover Sabang
and Historical Landmarks
http://holytrinity.CyberFair.ph
http://www.msc.net.ph/CyberFair_entry/
Local Music and Art Forms Award
www.Iskul.Org
WINNER
Local Music and Art Forms Award
Centre for International Education
St. Benedict College
Science and Information Technology High School
A Trip to the Artists’ Paradise
Sinulog: One Beat, One Rhythm, One Nation
http://www.stbenedict.edu/CyberFair/
http://sinulog.cie.edu
Honorable Mention
Goodwill Bookstore Local Leaders Award
De La Salle Santiago Zobel School
Gregorio Araneta University Foundation
The Artists Entrance
PIPOL
http://www34.brinkster.com/cf03artiste
http://www.pipol.schoolreference.com/
106 advocacyandpolitics

Spotlight
Attorney JJ Disini
Disini & Disini Law Office
http://www.disini.ph
JJ is a lawyer specializing in information
technology matters. He represents
mobile content providers, e-commerce
companies engaged in e- banking, B2B
marketplaces, online services, as well
as, “traditional” IT companies such as
systems integrators, ISPs, and network
providers. The website, http://www.disini.ph, was established in
2000 at the same time he formed his lawfirm. One of his main
goals in maintaining the site is to provide legal information for those
interested in various areas of the law. He continuously updates the
resources section of the site by including informative materials such
as an Investment Primer and an Outsourcing Primer.
He was also the principal drafter of the Implementing Rules and
Regulations of the E-Commerce Law - Republic Act 8792. He also
wrote a position paper for the Philippine Internet Commerce Society,
in support of Cebu-based CyberPromdi in 2000 to counter a proposed
ordinance banning minors in Internet cafés.
JT: Since the passage of the E-Commerce Law what’s happening in
the legislative arena?
JJ: There have been various initiatives in Congress relating to e-
commerce such as the cyber crime bill, the convergence bill, and
of course, the bill creating the Dept of ICT. However, there have
been no new laws to date. I’m not entirely sure if this is a good
thing or not. It seems to indicate that ICT isn’t much of a priority in
the national agenda. However, I do believe that certain initiatives
are worth pursuing. In particular, I believe a data protection and
privacy law would benefit various sectors of the IT industry including
the outsourcing providers as well as the public in general (whose
informational privacy can be secured through the law).
JT: What’s next? Do you see tougher issues in the area of cryptography
and intellectual property?
JJ: I think the challenge now in the policy arena revolves around
formulating a strategy for addressing various issues. There appears
to be no “game plan” emanating from our policy makers with a
specific agenda and action items. I think the time for motherhood
statements of support and development have passed. We need to
initiate steps to implement specific programs to get the industry
going and ensure the continued development of the ICT sector.
JT: Do you ever see the Internet being governed? Will it be through
traditional courts or dispute resolution?
JJ: Internet governance is far too complex to have a ready answer.
Overall, I do believe that the use of technology (probably through
private contracting) remains the strongest source of regulation on
the Internet. The best example is the Uniform Dispute Resolution
Policy (UDRP) of ICANN which effectively
legislated protection to trademark
owners against cybersquatting. In a mix
of private contracting and technological
control, UDRP has been an unqualified
success. I think there are important
lessons in that experience relating
to Internet governance. Of course,
a government can take an extreme
position, similar to China where ISPs
are heavily regulated in order to block
access to “offensive” sites. In the final
analysis, the success of government
control depends on many factors and an
philippineinternetreview
individual government’s efforts may be thwarted by hackers and
other liberally- minded citizens.
I don’t believe the traditional courts can effectively handle
multi-jurisdictional issues arising from the Net. Unless, of course,
those courts are created by international agreements and some
order is placed in terms of venue and jurisdiction. Still, I imagine
those kinds of suits will be very expensive to litigate and very
inconvenient to at least one of the parties.
JT: As work-at-home arrangements are becoming popular in the
Philippines, do you find companies monitoring workers-at-home for
privacy violation?
JJ: I’m not aware if monitoring is that effective for people who tele-
commute. I imagine that at best, the company can screen the person’s
email. Still, in the workplace, a vast majority of employers—at least
in the US—monitor computer use to avoid unauthorized surfing
and other factors that affect productivity. In that respect, I believe
the employer has a right to institute monitoring equipment. In the
final analysis, computer resources are provided by the employer
for business purposes only. As such, the employer has the right to
monitor the use of those resources to ensure their proper utilization.
If employees want privacy, then they should use their own computer
resources—at home, for example.
JT: Is it possible for Filipinos to elect a Philippine President from the
comforts of their own home or work place (especially for OFWs)?
JJ: Theoretically, yes. The issue of course is authentication. But
that’s a common issue for all on-line transactions as well as current
“off-line” election procedures in place.
JT: Do you think it’s possible in the future that there will be a candidate
in national politics that will represent the Internet community? Who
do you think that will be?
JJ: I guess it’s difficult to say or determine who comprises the
Internet community. There are users and there are business people,
government officials -- all having different interests that need to be
protected. I think at most, we can have a candidate with an agenda
that supports various interests within the Internet community.
Perhaps, that would be enough.
Who would that be? Anybody who takes up the cudgels for
promoting Internet use and commerce in the Philippines.
JT: Many believe the Internet changes everything about the law.
Almost everyone can maximize the use of the Internet for both good
and bad purposes. As a safety principle especially in legislation, what
is commonly noted is that whatever is allowed in the real world should
be allowed on the Internet and vice-versa. Do you think this principle
will remain the rule of thumb in the next 10 years? How does this
double-edged sword affect our rights and liberties?
JJ:It’s not so much a rule of thumb as a stop-gap measure. The
advent of the Internet and the pace at which adoption and usage
has grown over the past years has far outpaced Congress. Making
laws is a deliberate and deliberative process that cannot possibly be
done in Internet time. So, in the absence
of any pronouncements from Congress, the
courts have no choice but to apply existing
laws to new situations—with varying success.
I believe this will continue but I also believe
that the process is continually improving as
the legal analysis improves and legal experts
come to understand the peculiar issues the
Internet brings to the law. On the whole,
I wouldn’t be too concerned about our
rights and liberties. I don’t think excessive
regulation is in the offing and those of us
online should be free from restrictions for
years to come.
advocacyandpolitics 107
 philippineinternetreview
The E-Commerce Law Policy Advocacy Process
Petite is a fresh graduate from the University of the Philippines, Los
Baños (UPLB) with a degree of Bachelor of Science in Development
Communication, major in Development Journalism.   She’s  a member of
the Gamma Sigma Delta Honor Society of Agriculture , an organization
whose main objective is to encourage high standards of scholarship and
worthy attainment in agriculture and related sciences.
“The passage of the E-Commerce Law is a living
proof that the Internet, if used well, can be an
enabling tool for policy advocacy. This landmark
law is the only law in the country to date that was
supported by numerous sectors throughout the
country. The passage of the law is seen as a great
catalyst for leveling the playing field, benefiting
SMEs and Filipinos worldwide.” – Janette Toral
A
t this time and age, the size of an organization
does not guarantee its success. The organization’s
achievement will depend on how fast its plans are
implemented and how it makes use of the first-mover
advantage. Andy Grove of Intel said that in five years
all companies will be Internet-based or nothing at all.
With these implications, the Electronic Commerce Act
(Republic Act No. 8792; E-Commerce Act) paved the
way for local companies to examine themselves and their
place in the New Economy. It should be emphasized
that the passage of the Act is but the first step in the
government’s efforts to secure the country’s place in
the New Economy (Disini, et al, 2000).
The E-Commerce Act is an important piece of
legislation for the Philippines. As intended, the passage
of the Act has opened the door for investments in
Information Technology projects as well as a number
of back-door listings in the Philippine Stock Exchange.
Consequently, companies became interested in
electronic commerce and they have been forced to deal
with the changes brought about by the New Economy
(Disini, et al, 2000).
On June 14, 2000, President Estrada signed the
E-Commerce Act (Republic Act No. 8792), “An Act
Providing for the Recognition and Use of Electronic
Commercial and Non-commercial Transactions, Penalties
For Unlawful Use Thereof, And Other Purposes.” On July
13, 2000, the “Implementing Rules and Regulations
of the E-Commerce Act” was likewise signed (Favis-
Villafuerte, 2001).
Estella (1997), one of the authors of the book
Uncovering the Beat, wrote, “There are bills – and bills.
Some find their way to the front pages; most don’t.
Some became the subject of heated debates from the
time they are taken up in the committees to the time
they are debated on by the plenary body; others never
see the light of day.” The thrusts of the E-Commerce
Act (RA No. 8792) have been contentious even before
the first bill was drafted.
Bills, according to Reyes (1998), “must be
beautifully packaged through communication strategies
108 advocacyandpolitics
By Petite Nuñez
that can influence the passage of a bill into a law.”
The advancement of a bill into a law has always been
a dance between talent and politics, with the use of
various communication strategies. There are as many
communication strategies to process a bill, as there are
individual policy-makers.
With the growing popularity of computers, Internet,
and e-commerce, comes the greater need for the E-
Commerce Act to be enacted into a law. Assuming that
a policy-maker has relevant knowledge and is open-
minded, the problems of bridge design arise. Thus,
the question: What form/s of communication strategies
did the policy advocates of the E-Commerce Act use to
communicate their policy idea?
This study focused on the progress of the E-
Commerce Act from its emergence as a bill, to its status
as a law. It zeroed in on the communication strategies
the policy-makers employed during the passage of the
E-Commerce Act.
Salient Features of the E-Commerce Act
Republic Act No. 8792, “An Act Providing for the Recognition
and Use of Electronic Commercial and Non-commercial
Transactions, Penalties For Unlawful Use Thereof, And
Other Purposes,” is popularly known as the Electronic
Commerce Act or E-Commerce Act.
As stated in the Section 3 of the E-Commerce Act:
This Act aims to facilitate domestic and international
dealings, transactions, arrangements, contracts and
exchanges and storage of information through the
utilization of electronic, optical and similar medium, mode,
instrumentality and technology to recognize the authenticity
and reliability of electronic data messages or electronic
documents related to such activities and to promote the
universal use of electronic transactions in the government
and by the general public.
The salient features of the E-Commerce Act are
the following (Favis-Villafuerte 2001: 161-163):
a) The provisions of the law apply to both commercial
and non-commercial transactions whether the
transactions are international or domestic in
scope;
b) Electronic data messages and electronic documents
have now the same legal status as paper/written
documents including its admissibility as evidence;
c) Electronic signatures have now the same legal
status as manually-signed signatures;
d) Government offices will perform their functions
and conduct business electronically within two
years from the effectivity of the law;
e) The Supreme Court is given authority to come out
with rules on electronic notarization;

f) The installation within two years from the effectivity
of the E-Commerce law of a government-wide
electronic on-line network that will facilitate the
on-line interaction between government agencies
and the general public;
g) As a general rule, service providers incur no civil
or criminal liability for providing some access to
electronic data message or electronic documents;
h) For the Department of Trade and Industry (DTI) to
direct and supervise the promotion and development
of electronic commerce in cooperation with other
government agencies;
i) For the DTI to issue rules and regulations establish
quality standards or issue certifications to give effect
to the provisions of the E-Commerce law;
j) There are penalty provisions for hacking; piracy
of intellectual property rights; violations of
the consumer law and other laws as well – for
transactions that involve electronic data messages
or electronic documents;
k) The DTI, Department of Budget and Management
(DBM) and the Bangko Sentral ng Pilipinas
(BSP) are mandated to enforce the provisions
of the E-Commerce Law in coordination with the
Department of Transportation and Communications
(DOTC), National Computer Center (NCC), National
InformationTechnology Council (NITC), Commission
on Audit, other concerned agencies and the private
sector;
l) A Congressional Oversight Committee composed of
the Committees on Trade and Industry, Commerce,
Science and Technology, Finance, and Appropriations
in the Senate and House of Representatives shall
monitor the implementation of the E-Commerce
Law and shall meet every quarter for the first two
years and every semester for the third year after the
approval of the E-Commerce Law;
m) The three government agencies implementing the
E-Commerce Law [as mentioned above] are also
required to submit to the Congressional Oversight
Committee a quarterly performance report for the
first three years;
n) Parties to a contract involving electronic data message
or electronic document may agree to modify any
provision of the E-Commerce Law; and
o) Benefits conferred by the provisions of the E-
Commerce Law including the practice of profession
may be conferred to other nationalities of countries
that grant the same benefits to Filipino citizen.
Policy advocacy process
The E-Commerce Law policy advocacy groups utilized
numerous communication strategies during the various
stages (i.e. from first reading up to the bicameral
conference) of the E-Commerce bill in both Houses.
The advocacy strategies are face-to-face, testimonies,
networking, alliance building, tapping key legislators,
and using mass media.
The elements of the advocacy process in this
study are: a) the legislators and interest groups; b)
the advocacy strategy/ies; and c) the E-Commerce
Act. Interplay of each element in the policy advocacy
process of the E-Commerce Act (Figure 1) starts from
the advocates who drafted the bill. Advocates could
either be an interest group that stands to gain from its
passage, or the congressional representative or senator
with a constituency to serve.
The conveyor of interests or advocate used one
or several of the communication strategies earlier
philippineinternetreview
• Legislators •
• Interest Groups • Figure 1. Framework of the
policy advocacy process of
the E-Commerce Act
Advocacy/
Communication
Strategies:
• Face-to-face •
• Testimonies•
• Networking •
• Alliance Building •
• Tapping Key Legislators •
• Use of Mass Media •
E-Commerce Act
stated, to promote and accelerate the passage of the
E-Commerce Act into a law.
Evolution of the E-Commerce Act
The Electronic Commerce Act (Republic Act No. 8792; the
“E-Commerce Act”) is the merged version of House Bill
No. 9971 (HB 9971) and Senate Bill No. 1902 (SB 1902).
The primary authors and sponsors were Senator Ramon
Magsaysay, Jr., Representatives. Leandro Verceles, Jr.
and Marcial Punzalan, Jr. Co-Authors of the Act who filed
electronic commerce bills were Senators Juan Flavier,
and Blas Ople and Representatives Harry Angping, Roilo
Golez and Dante Liban. Other co-authors include Sen.
Vicente Sotto III, Franklin Drilon, Francisco Tatad, Raul
Roco, Aquilino Pimentel Jr., Miriam Defesor-Santiago and
Representatives Herminio Teves, Magtanggol Guinigundo,
Rolando Sarmiento, Orlando Fua, Joey Salceda, Oscar
Moreno, and Ignacio Bunye.
Senate Bills
Four bills were filed in the Senate in relation to e-
commerce:
a) Senate Bill No. 10, “AN ACT PROMOTING THE
USE OF ELECTRONIC DATA INTERCHANGE (EDI)
IN TRADE TRANSACTIONS AND FOR OTHER
PURPOSES”, authored principally by Senator Juan
M. Flavier on June 30, 1998;
b) Senate Bill No. 1184, “AN ACT PROVIDING FOR AN
ELECTRONIC COMMERCE LAW AND FOR OTHER
PURPOSES”, introduced by Senator Juan M. Flavier
on Sept. 10, 1998;
c) Senate Bill No. 1523, “AN ACT PROVIDING FOR
AN ELECTRONIC COMMERCE LAW AND OTHER
PURPOSES”, introduced by Senators Ramon B.
Magsaysay, Jr., Vicente Sotto III, Juan Flavier, and
Blas Ople on March 25, 1999; and
d) Senate Bill No. 1902, “AN ACT PROVIDING FOR
AN ELECTRONIC COMERCE LAW AND FOR OTHER
PURPOSES” Feb. 15, 2000.
The first bill on electronic commerce was filed in 1992. It
was called the Electronic Data Interchange (EDI) bill and
was re-filed as Senate Bill No. 10 (SB 10) during the 11th
Congress. However, when the United Nations Commission
on International Trade Law (UNCITRAL) Model Law on
Electronic Commerce (Model Law) was adopted, the EDI
bill was abandoned in favor of the Model Law framework.
Besides, the EDI bill was considered technology-specific and
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Table 1. Timeline of the passage of E-Commerce Act at the Senate

Date Senate
1992 Electronic Data Interchange (EDI) bill
June 30, 1998 EDI re-filed as Senate Bill No. 10 (SB 10) during the 11th Congress
Sept. 10, 1998 Senate Bill No. 1184 was introduced by Sen. Flavier
March 25, 1999 Senate Bill No. 1523 was introduced by Sen. Magsaysay Jr. et al.
Feb. 15, 2000 Senate Bill 1902 was read on first reading and referred to the Committee(s) on
Trade and Commerce; and Science and Technology
Returned and submitted jointly by the Committee(s) on Trade and Commerce;
and Science and Technology recommending its approval without amendment
Feb. 16, 2000 Bill on Second Reading
Feb. 21, 2000 Start of interpellation
March 7, 2000 The conclusion of interpellations for SB 1523
After the conclusion of interpellations for SB 1523, the bill was referred back to
the Committees on Trade and Industry and Science and Technology where it was
replaced by SB 1902.
Start of period of committee amendments
March 15, 2000 Period of committee amendments closed
March 21, 2000 Start of period of individual amendments
April 4, 2000 Period of individual amendments closed
Approved on Second Reading with amendments
April 10, 2000 Bill on Third Reading
SB 1902 was approved

if passed, might inadvertently promote the use of a declining
technology, EDI. In addition, it was felt that given the long and
tedious legislative process in the Philippines, a technology-
neutral law would provide more stability inasmuch as it can
adapt to and withstand advances in technology.
The Model Law was thus incorporated in Committee
Report No. 34 and Senate Bill No. 1523 (SB 1523). In
addition, the Electronic Transactions Act of Singapore
(ETA) was considered as suggested by several participants
in the technical working group. The ETA, at that time, had
just been passed in Singapore and it was believed that
innovations in that statute would prove beneficial in the
Philippine setting. After the conclusion of interpellations
for SB 1523, the bill was referred back to the Committees
on Trade and Industry and Science and Technology where
it was replaced by SB 1902. SB 1902 departs from SB
1523 in that provisions of the ETA were minimized and
the bill reverted back to the framework of the Model Law.
This revision was prompted by concerns that since the
Philippine judicial system frequently adopt US case law;
conflicting Singaporean jurisprudence on the ETA might
unduly confuse the issues on what is already considered a
complex area of the law.
However, the SB 1902 did not undergo the usual
process wherein once the report reverted to the committee,
the committee had in its possession an original measure
that should have been heard, as though there had been no
previous hearings beforehand. The Senate President clarified
that it would not, as there were instances in the past where
the Body, in order to facilitate the proceedings, discussed
the draft of a bill as of a certain date without referring it back
to the committee. In this instance, he said that the Rules of
the Senate (Rule XI, Section 32) was presumed to have been
suspended to allow the Body to debate on a new draft.
It is significant to point out that all debates in the Senate
regarding the Act referred to SB 1523 not SB 1902. SB
1902 was approved on April 2000 (Table 1).
House Bills
During the first regular session of the 11th Congress, there
were four bills on e-commerce initially filed in the House to
the Committee on Trade and Industry for consolidation:
a) House Bill No. 1756, “AN ACT PROMOTING THE
UTILIZATION OF ELECTRONIC DATA INTERCHANGE
IN TRADE TRANSACTIONS, AND FOR OTHER
PURPOSES,” which was introduced by Representative
Harry C. Angping on Sept. 14, 1998;
b) House Bill No. 4123 “AN ACT PROMOTING AND
ENHANCING ELECTRONIC COMMERCE, USE OF
ENCRYPTIONS IN TRADE AND INDUSTRY, IN
GOVERNMENT AND FOR OTHER PURPOSES,”
introduced by Representative Roilo R. Golez on Oct.
12, 1998;
c) House Bill No. 7104, “AN ACT PROVIDING FOR AN
ELECTRONIC COMMERCE LAW, AND FOR OTHER
PURPOSES,” which was introduced by Representative
Leandro B. Verceles, Jr. on March 24, 1999; and
d) House Bill No. 8046, “AN ACT PROVIDING FOR AN
ELECTRONIC COMMERCE LAW, AND FOR OTHER
PURPOSES,” which was introduced by Representative
Marcial C. Punzalan, Jr. on Aug. 4, 1999.
Representatives Punzalan and Verceles filed separate
bills which were copies of SB 1523.
At the same time, Committee Report No. 34 and
SB 1523 were filed in the Senate. After the above bills
have been subjected to several committee hearings

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with both government and the private sector providing
their inputs and comments, the Committee on Trade
and Industry came up with a substitute bill on the
above e-commerce measures on March 7, 2000. This
substitute bill was subjected to further comments and
refinements and eventually led to House Bill No. 9971
(HB 9971) – “AN ACT PROVIDING FOR PROTECTION
OF ELECTRONIC COMMERCIAL TRANSACTION,
PENALTIES FOR UNLAWFUL USE THEREOF AND FOR
OTHER PURPOSES” – which was jointly approved
by the Committee on Trade and Industry and the
Committee on Science and Technology on March 22,
2000.
HB 9971 was spearheaded by Rep. Harry C.
Angping. It is the consolidated version of the bills filed
in the House, and was presented and deliberated upon
by the House in May 2000. The bill was approved by
the House on June 6, 2000 (Table 2).
Bicameral Conference Committee
case of conflicting provisions in both HB 9971 and SB
1902, these were resolved through discussion.
The report of the Bicameral Conference
Committee was issued on June 7, 2000 and approved
by the House later that evening. On June 8, 2000,
the Senate approved the same report.
After the bill has been enacted and approved by
both Houses, it was endorsed to the Office of the
President for signing. The Electronic Commerce Act
(Republic Act No. 8792) was signed into law on June
14, 2000 (Table 3).
Stages of the Policy Advocacy Process
The role of the Congress must be, as mentioned by
Senator Ramon B. Magsaysay, Jr., the Chairman of the
Committee on Trade and Commerce in the Senate, “Not
to pose any obstacle to e-commerce or the growth of
EDI (Electronic Data Interchange) in trade transactions.
If it cannot help at all, it must, at least, not hinder.”

Tasked with reconciling the provisions of HB 9971 Senate Version

and SB 1902, the Bicameral Conference Committee
convened on June 7, 2000 in Manila Hotel. Senators
Magsaysay, Roco and Flavier represented the
Senate panel and Congressmen Punzalan, Verceles,
Angping, Moreno, and Sandoval represented the
House panel.
The rule, “any provision appearing in one version
which does not appear in the other” was adopted
in the final report. Interestingly enough, since HB
9971 did not abandon the provisions of the ETA (as
distinguished by SB 1902), these provisions found
their way back to the final version of the Act. In the
During the 11th Congress, the principal author of the
re-filed EDI bill, Senate Bill No. 10 (SB 10) and Senate
Bill No. 1184, was Senator Juan M. Flavier. However,
Senator Flavier believed that there were others who
had better technical competence at discussing the bill
better than the knowledge he possesses. Consequently,
he let Senator Ramon B. Magsaysay, Jr., then the
Chairman of the Committee on Trade and Commerce in
the Senate take over the passage of the bill. Senator
Flavier’s acknowledgment of his limited knowledge
about the EDI was apparent in the committee meeting

Table 2. Timeline of the passage of E-Commerce Act at the House of Representatives

Date House
Sept. 14, 1998 HB 1756 was introduced by Rep. Angping
Oct. 12, 1998 HB 4123 was introduced by Rep. Goilez
March 24, 1999 HB 7104 was introduced by Rep. Verceles
Aug. 4, 1999 HB 8046 was introduced by Rep. Punzalan
March 7, 2000 The Committee on Trade and Industry came up with a substitute bill on the e-
commerce measures, HB 9971
March 22, 2000 HB 9971 was jointly approved by the committee on Trade and Industry and the
Committee on Science and Technology
Both Committees submitted HB 9971 for approval in substitution to HB 1756,
HB 4123, HB 7104, and HB 8046
April 5, 2000 Start of period of sponsorship
April 7, 2000 Certified as urgent
I Love You Virus
May 17, 2000 End of period of sponsorship
May 24, 2000 Start of period of interpellations
May 2000 HB 9971 was presented and deliberated upon by the House
June 5, 2000 End of period of interpellations
June 6, 2000 Period of committee amendments
Period of individual amendments
Third reading
HB 9971 was approved by the House
Transmitted to the Senate

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Table 3. Timeline of the passage of E-Commerce Act at the Bicameral Conference Committee

Date Bicameral Conference Committee

May 8, 2000 Certified by the President of the Philippines for immediate enactment on April 7,
2000
June 7, 2000 Bicameral Conference on the disagreeing provisions of SB No. 1902 and House Bill
No. 9971
The report of the Bicameral Conference Committee was approved by the House
later that evening
June 8, 2000 The Senate approved the Bicameral Conference Committee report and the Act was
referred to the Office of the President for Signing.
June 14, 2000 The Electronic Commerce Act (Republic Act No. 8792; the “Act”) was signed into
law by then President Joseph Ejercito Estrada

of the Committee on Trade and Commerce joint with
Committee on Science and Technology on Sept. 9,
1998:
SEN. FLAVIER. … I am not an information technology
person. I am, as everyone probably knows, a
medical doctor and a rural development worker.
In fact, I have difficulty distinguishing between a
mouse and a rat, a CD rom and a CD or Christian
Dior perfume, a megabyte and a love bite. In fact,
my nine-year old grandson knows more about the
computer than I do.
The Chairman. …go through this bill and not be
limited by what you see in the bill but you see what
is needed to encourage, simplify and make the
country even as competitive as Singapore. Don’t
be afraid to copy. We don’t have to be the pioneers.
But if you look at the more advanced countries, let
us find out what are the good things, and then our
own local input. But when I say simplify, if you can
say it in one page, you say it. That is an attention
to the lawyers. If you can say it in half page, even
better, as long as the message is there…

In one of the public hearings in September 1998
conducted by the Committee on Trade and Commerce
joint with the Committee on Science and Technology,
the chairman, Senator Magsaysay, Jr. expressed that
the private sector should spearhead the promotion of
the use of e-commerce in the Philippines. This was
supported by many of those in the private sector.
When the United Nations Commission on
International Trade Law (UNCITRAL) Model Law on
Electronic Commerce (Model Law) was adopted, the
EDI bill was abandoned in favor of the Model Law
framework.
In addition, the Electronic Transactions Act of
Singapore (ETA) was considered as suggested by
several participants in the technical working group. The
members of the Technical Working Group (TWG) who
worked closely with the Committee Technical Staff led
by Atty. Sofronio Larcia and Atty. Rodolfo Noel Quimbo of
the Office of Senator Juan M. Flavier were Mrs. Janette
Toral of the Philippine Internet Commerce Society and
its members; Mr. Gamaliel Pascual of the E-Commerce
Promotion Council; Mr. Paul Brown of the US Embassy;
Mr. Albert dela Cruz, Director General Ike Señeres of
the National Computer Center; and the Department of
Trade and Industry.
According to Janette Toral, a member of the
TWG and the founder and then president of the
Philippine Internet Commerce Society (PICS) – an
organization whose primary mandate is to push for
the passage of the E-Commerce law – in making
provisions for the law, they deliberated on which
provisions of the model laws they got (Singapore
and US) were better. Having decided which one
is more appropriate, they copied it, fixed it, then
gave it during the deliberation/lobbying. This
approach was encouraged by Senator Magsaysay,
Jr. (Sept. 17, 1998 Public Hearing conducted by the
Committee on Trade and Commerce joint with the
Committee on Science and Technology):
Since it was difficult to explain the concept individually
to the senators, and it was complicated to expound
technical concepts in layman’s term, AGILE, one of the
interest groups came up with a simple publication—
the E-Primer: An introduction to E-commerce. This
was a primer on frequently asked questions on e-
commerce from that technical and operational side
of it, up to the legal issues concerned in e-commerce
transactions. This was released on January 2000 and
was distributed to the senators and their staff.
However, after several deliberations, the process
was stalled by Senator Raul S. Roco who, according to
Toral, “requested another version”. The interpellation
of Senator Roco was manifested in the Senate’s Journal
of Feb. 1, 2000:
Senator Roco believed that the bill would be
difficult to understand considering that Singapore
law has different roots in terms of legal development.
He inquired why Singapore was particularly chosen
instead of the standard references. Likewise, he
asked on the jurisprudence that would prevail in legal
cases—that of Singapore, that of the international
community by usage, custom or convention, or as
understood by the United Nations’ agencies.
Accordingly, in two days, they revised everything
and submitted another technical committee report.
The Model Law, having been adopted, was incorporated
in Committee Report No. 34 and Senate Bill No. 1523
(SB 1523), “AN ACT PROVIDING FOR AN ELECTRONIC
COMMERCE LAW AND OTHER PURPOSES.” SB 1523 was
filed by Senator Magsaysay, Jr.
First Reading
Nothing much happened during the first reading of
SB 1523. Here, the bills were announced and their
numbers and titles were read before the plenary
body. Afterwards, the Speaker or the Senate
President referred it to a particular committee to

112 advocacyandpolitics

which the proposed measure is assigned. According
to Atty. Rudy Quimbo, one of the members of the
TWG and the Chief of Staff of Senator Flavier, the bill
was referred to the committee of Senator Magsaysay,
Jr. - the Committee on Trade and Commerce. Since
Senator Magsaysay, Jr. was the one who defended the
bill on the floor. Thus, the E-Commerce Act is most of
the time identified with him.
Nevertheless, the first reading took quite some
time because Senator Magsaysay, Jr. conducted many
hearings. Atty. Quimbo cited two main reasons: there
were other bills that were competing with it and there
was the “fear of the unknown” among the senators.
Their greatest enemy was, more than anything,
ignorance.
Atty. Quimbo’s sentiment about the senators’
“fear of the unknown” was resounded by Atty. Suharni
Samanodi, Head of the Congressional Oversight
Committee on E-Commerce Secretariat and the Chief
Technical Officer of the Office of Senator Magsaysay,
Jr. “One basic problem that we had before was that
it (e-commerce) was not easily understood by a lot
of people. …it was new and technology is not really
practiced by most of the senators – actually, the elderly
ones.” Consequently, Senator Magsaysay, Jr. had a
difficult time hammering the new concept so that it will
be acceptable to everybody.
Second Reading
With the senators, properly educated through their staff
members, comes the bombardment of questions during
the second reading. Atty. Quimbo recounted that they
had difficulty during this stage, only in the sense that
many senators participated, “...marami ng tanong sa
floor. Marami nang gustong i-amend. Syempre they
were gaining knowledge also from the Internet, getting
materials... (...there were many questions on the floor.
They wanted to amend a lot of things...)”
He further added that, “they (senators) were trying
to put certain provisions which they felt were important
but which we (TWG) felt were provisions that would
only create even greater confusion.” There were certain
provisions the TWG felt should not have been included
and they were successful in making sure that the bill
was not cluttered, “I think about 85 to 90 percent
of that, we were successful in making it as much as
possible “hue” to the original version, which was the
UNCENTRAL model.” Still, he emphasized that it was
not perfect.
Other senators also complained about its being too
technical. However, it could not be avoided because it
really had technical components.
To build alliance with senators, one of the tactics
employed by Senator Magsaysay, Jr. during the second
reading was flattery:
Senator Roco:… Would the distinguished
gentleman yield to questions that I have been
asked to study?
Senator Magsaysay: Very willingly, Mr.
President, from the sage of the Bicol Region, the
highest-placing presidential candidate in 1998 in
the demographics of class A and B, including the
youth, having been the top.
Senator Roco: Mr. President, I am about to sit
down because as we all know, in this Hall, flattery
will get us everywhere. [Laughter]
However, since most of the members of the senate of
the 11th Congress were lawyers, Senator Magsaysay,
philippineinternetreview
Jr.’s stature as an engineer was belittled in a subtle
way and they challenged the legal parlance of the
Act:
Senator Roco: We have total trust in the
staff, Mr. President. I am just calling attention to
some notions that they may wish to adopt.
Now, as for “hacking,” may we suggest also that
the staff revisit the definition? Again, we lawyers
are always prone to defining by enumeration.
But since hacking is one of the criminal acts we
penalized, we may want to definitely state the
elements. Because we are penalizing. So we
cannot just go by enumeration.
Again, I just leave that, Mr. President. I am
just calling attention to them by way of drafting,
if we may do so.
Senator Roco: Now, Mr. President, I will ask
a series of questions and I will leave it to the
sponsor to answer. I am really leading him to the
answers, but again this is for the lawyers who will
read the record.
When we say “accessible” in Section 9, what exactly do
we mean? Downloaded? And if it is secured, secured
with permission. If it is coded, what exactly do we
mean by “accessible”?
To get the support of Senator Roco, Senator
Magsaysay, Jr. acknowledged and welcomed his
amendments during the discourse. Also, he emphasized
the Information Technology (IT) title of the former:
Senator Magsaysay: That is a welcome
statement from the gentleman from Camarines Sur,
who is also a champion of IT and e-commerce.
On March 28, 2000, One Internet Day was held in
the Senate. This was an event conceptualized by
PICS, one of the interest groups, with the support
of Senator Magsaysay Jr. It was held as a lobbying
battle cry for the passage of the E-Commerce
Law. Free seminar, food, technology exhibit, and
entertainment were offered during the event. It
carried the theme “Internet Para Sa Lahat”. Senator
Magsaysay Jr. and sponsors provided the necessary
resources to make the event highly successful that
allowed PICS to accommodate close to 300 attendees.
As a tactic Toral—the founder of PICS and one of
the advocates—said they invited all the senators to
drop by and say a few words and somehow get a
verbal commitment that they support the passage
of the E-Commerce Law.
After the conclusion of interpellations for SB
1523 on March 2000, the bill was referred back to
the Committees on Trade and Industry and Science
and Technology where it was replaced by SB 1902.
SB 1902 departs from SB 1523 in that provisions
of the ETA were minimized and the bill reverted back
to the framework of the Model Law. It is significant
to point out that all debates in the Senate respecting
the Act referred to SB 1523 not SB 1902.
Nevertheless, after several measures were done
to educate the senators about the e-commerce, there
were still several issues that were not comprehensive
to some during the second reading and the period
of interpellation. Illustrations of this were another
discourse between Senator Roco and Sen Magsaysay,
Jr. during the second reading:
Senator Roco: Yes, Mr. President. I am
sure the staff—they were nodding their heads—
caught that part of the introductory paragraph of
UNCITRAL.
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The variation by agreement is also one that I have
difficulty understanding. If it can be explained a little.
I do not understand why it is here. In fact, I do not
know what it is saying. It is difficult. It says:
As between parties involved in generating, sending,
receiving, storing or otherwise processing data message,
and except as otherwise provided, the provisions of Part
II, Chapter III, may be varied by agreement.
I honestly could not identify, unless it means communication
of data messages. I cannot figure it out.
And the discourse of then Senator Teofisto T.
Guingona, Jr. with Ike Señeres, the director general of
the National Computer Center, and Gamaliel Pascual
of the E-Commerce Promotion Council about some
provisions on March 15, 2000, during the period of
interpellation:
Senator GUINGONA: Itong “by other means,”
I don’t know what this means, or by other means,
very, very soft.
MR. SEÑERES: I think the reason why it is there,
Senator, is…
Senator GUINGONA: I know that, technology is
progressing. I mean, it’s very hard to put it down
and just that…
MR. PASCUAL: But I guess the allowance there
is, as the technology improves, there may be other
means for storing.
To help the senators further understand the concepts,
Senator Magsaysay, Jr. and the policy advocates used
examples and comparisons during their explanations
(interpellation, March 15, 2000):
SEN GUINGONA: All right, electronic signature
refers to any distinctive mark, characteristic or sound.
What is sound? How will that represent signature?
MR. PASCUAL: I’ll give you an example, Senator. For
example, let’s say, in the US Justice system, the Parole
Board verifies the parolees by…You have to dial up into
a 1800 to report, but the computer actually verifies
your voice print. It actually verifies, it checks the caller
ID. For example, if you have to stay in Kansas, it will
check very quickly that, “Yes, that is the area code for
Kansas. Yes, that is the voice print of Liel Pascual.”
MR. PASCUAL: (talking to Senator Guingona).
I’ll show you another example. When we talk about
electronic signatures, we have to agree mutually. This
is another method. This is what they call a hard token
wherein this generates a sequence every 60 seconds.
This ID which is registered to me. That’s the one we
are using for the Small Investors’ Program wherein the
Bureau of the Treasury knows with certainty that that is
coming from me because this is a unique number being
generated every 60 seconds.
Third Reading
This is an excerpt from the “EXPLANATION OF VOTE OF
SENATOR MAGSAYSAY”:
Senator Magsaysay: Mr. President, this is a very
brief explanation.
It took us almost two years since 1998 to discuss
the e-commerce bill in three public hearings, and more
than six formal technical working group meetings, and
other informal discussions conducted in my office by
the TWG, up to its approval today on Third Reading.
The passage in this august Chamber of the e-
commerce bill, Senate Bill No. 1902, has been awaited
by all sectors which actively participated and worked
hand in hand with the Committees on Trade and
Commerce; the Science and Technology…
114 advocacyandpolitics
The result of the voting on the Third Reading on SB 1902,
“AN ACT PROVIDING FOR AN ELECTRONIC COMMERCE
LAW AND FOR OTHER PURPOSES” was 16 affirmative
votes, no negative vote, and one abstention. With this,
Senate Bill No. 1902 was approved on Third Reading on
April 10, 2000.
House Version
During the first regular session of the 11th Congress,
there were four bills on e-commerce initially filed in
the House to the Committee on Trade and Industry for
consolidation: HB 1756, HB 4123, HB 7104, and HB
8046.
After the above bills have been subjected to several
committee hearings with both government and the
private sector providing their inputs and comments,
the Committee on Trade and Industry came up with a
substitute bill on the above e-commerce measures on
March 7, 2000. This substitute bill was subjected to
further comments and refinements and eventually led
to House Bill No. 9971 (Committee Report No. 685) –
“AN ACT PROVIDING FOR PROTECTION OF ELECTRONIC
COMMERCIAL TRANSACTION, PENALTIES FOR
UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES”
– which was jointly approved by the Committee on
Trade and Industry and the Committee on Science and
Technology on March 22, 2000.
First Reading
Similar to the Senate, HB 9971 was announced during the
first reading and its number and title were read before the
plenary body.
During floor deliberations, the policy advocates were
there to aid the congressman who will be defending the
bill. Zorayda Andam, a project associate for e-commerce
ans a representative of AGILE (a US funded project),
related that if there were questions that were not included
in their prepared anticipated questions and answers, the
congressman would buy time until they finished their
suggested answer and were able to hand it over, “we also
had index cards prepared.”
It was also during this time that the TWG and policy
advocates really saw the need to explain how e-commerce
really come into play because they observed that the
congressmen were having a hard time understanding
concepts as they (congressmen) ask the questions.
With this, copies of the E-Primer: An introduction to E-
commerce were also distributed in the House.
On the other hand, during the period of sponsorship
in the House, the bill was certified as urgent by then Pres.
Joseph Estrada. According to Andam, one of the policy
advocates, at the House, it was certified during the advent
of the “I Love You” virus.
Popularly called “love bug,” the “I Love You” virus wreaked
billions of dollars worth of havoc on thousands of computers
worldwide in May 2000. In an online article written by Helen
S. Andrade-Jimenez (2001) entitled “Preventing the ‘Love
Bug’ from biting again,” she reported that:
Philippine authorities were in quandary on what
charges to file against the suspect, former AMA
computer student Onel A. De Guzman, for being
responsible for the spread of the virus. The worm
affected Windows-based computer systems on May 4
(2000) through an e-mail attachment with the subject
line ‘I Love You.’
The love bug overwrote files on local and remote
drives, including document, music and image files.
“Industry estimates peg that at least 45 million

computers around the world were infected by
various strains of the virus,” she said further.
Andam recalled that the virus really facilitated the
readings and the discussions on the floor. This was
reaffirmed by Toral, “nakatulong din yung lumabas
yung kay Onel De Guzman, yung I Love You Virus.
Kasi nasa kalagitnaan na kami noon.” (talks about
the “I Love You” virus helped the House.
Although Representative Marcial C. Punzalan, Jr. was
the committee head, it was Representative Leandro
G. Verceles who defended the bill during the floor
deliberations. As Andam related, Representative
Punzalan believed that Representative Verceles is
more knowledgeable about the topic than he is.
Consequently, he turned over the defense of the HB
9971 to Representative Verceles.
Second Reading
Sometime in May, a One Internet Day at the House was
also held. Similar to the event at the Senate, it was
held as a lobbying battle cry for the passage of the E-
Commerce Law.
During the second reading, Representative Verceles
employed an unusual but striking introduction to his
sponsorship speech on the measure being discussed.
Addressed to the deputy speaker, Representative
Fuentes after being recognized:
Representative Verceles: Thank you, Madam
Speaker. “I love you”, Madam Speaker. I like to tell
you again, “I love you,” Madam Speaker.
The Deputy Speaker (Representative
Fuentes): I am hearing you loud and clear.
Representative Verceles: Madam Speaker,
however, this is not an amorous or intimate invitation.
This is the name of the bug, a computer bug, that
had recently plagued the computer industry in the
last few days…
During his sponsorship, he also quoted the Far Eastern
Review:
Representative Verceles: … In this Far
Eastern Review, September 2 issue… it said there that
there are only two countries in this world outside of
the western world which are on the right time and
the right place to gain the momentum in Information
Technology and to gain the benefits of the information
economy of e-commerce, one is India and the other is
the Philippines. India is about one decade ahead of
us. They are now into e-commerce.
The toughest part in the passage of the E-Commerce
Act in the House, according to Andam, was the Second
Reading. This was because it was the part where they
accepted amendments.
During the time where certain provisions in the bill
were referred for committee amendments, Andam and
other policy advocates gave pieces of advice, comments
and proposals to the Committee on Trade and Industry.
She narrated that they, the policy advocates, were able
to establish that kind of confidence with the committee.
Thus, the committee listens to them. One of the
reasons why the committee trusted them was because
they do not just negate a certain provision; they give
and explain their reasons why certain provisions should
not be included in the bill due to its legal implications.
Some provisions would complicate the situation, and
they were barring those provisions to prevent it from
happening.
philippineinternetreview
Third Reading
During this stage, Representative Punzalan was the one
who read the proposed provisions before it was brought
to the Bicameral Conference. With 160 affirmative
votes, 11 negative votes, and 0 abstentions, HB 9971
was approved by the House on June 6, 2000 and was
transmitted to the Senate.
Before the Bicameral Conference
Since the Senate version of the bill came out first, the
TWG of the House during this stage, together with
some of the policy advocates, already made sure that
the Senate version and the House version were fairly
consistent.
There were some provisions in the Senate version
that were, as said by Andam, “troubled waters” which
had unfavorable legal implications. What the policy
advocates did was to make a counter provision on the
House version. One of these was the provision on tax.
“Yung counter provision eh napasa sa House, ngayon,
at least yun yung mga ide-deliberate nila doon sa
Conference Committee. (The counter provisions passed
in the House are the ones being deliberated on by the
Conference Committeee.) We had to do that,” Andam
explained. She added that they had to have foresight,
“if you do not want any provision in the Senate version,
eh lumabas, gawa ka ng counter provision dito sa
House. So alam mo, may coordinating work involved
doon.”
Accordingly, there was not much discussion when it
came to the Bicameral Conference.
Conference Committee Deliberations
Tasked with reconciling the provisions of HB 9971
and SB 1902, the Bicameral Conference Committee
convened on June 7, 2000. Senators Magsaysay,
Roco and Flavier represented the Senate panel
and Congressmen Punzalan, Verceles, Angping,
Moreno, and Sandoval represented the House
panel.
As a rule, any provision appearing in one version
which does not appear in the other, is adopted in
the final report. This was suggested by Senator
Roco:
Senator Roco: Well, if there is a provision from
the House or from the Senate version that does not
conflict with anyone, we will just combine it. In the
areas where you have a provision and they have a
provision and they are just based on words, the staff
can clean it up. But the staff must identify where
there is a policy difference, hindi ba? And then we sit
down again after, let’s say, two hours or three hours,
to clean up or even just authorize the Chairmen to
work it out.
While the staff was combining the rest, the
committee discussed the contentious issues. In the
case of conflicting provisions in both HB 9971 and
SB 1902, these were resolved through discussion.
The counter provision on tax made by the
policy advocates of the House was one of the issues
deliberated upon:
THE CHAIRMAN (REP. PUNZALAN): So, we do
not intend to impose new taxes on e-commerce
transaction, likewise, I think the Senate intends
to…
THE CHAIRMAN (Senator MAGSAYSAY): That
is the intention of the Senate although it did not
advocacyandpolitics 115
 philippineinternetreview
contain any terms like existing. But I think the
House version is more specific…
They eventually erased the provision.
The report of the Bicameral Conference Committee
was issued on June 7, 2000 and approved by the
House later that evening. On June 8, 2000, the Senate
approved the same report.
After the bill has been enacted and approved by both
Houses, it was endorsed to the Office of the President
for signing. The Electronic Commerce Act (Republic Act
No. 8792) was signed into law on June 14, 2000.
Communication Strategies
In the case of the E-Commerce Act, the following
advocacy or communication strategies were employed to
various extents: face-to-face, testimonies, networking,
alliance building, tapping key legislators, and use of
mass media.
Face-to-Face
Similar with Reyes’ (1998) study, this study found out
that face-to-face contacts occur most often with staff
members of the legislators than with representatives
and senators. This was largely due to the constraints in
getting an appointment with members of the Congress
since demands on their time were tremendous and
actual meetings with them were preceded by delays,
procrastinations, and postponements. Consequently, the
advocates would feel presumptuous to talk to a legislator
straight unless they were asked. Thus, the advocates
went to the legislators through their staff members. Atty.
Quimbo emphasized, “Staff ang aming tutukan, isa-isa.
(We had to Zero in on the staff members).”
Although this strategy was employed all throughout
the advocacy process, this was foremost employed
before the Second Reading of the bills wherein the
advocates educated the staff of the senators and
congressmen who were in charge of the bill. Educating
the staff was conducted through seminars and lectures.
Likewise, educating them was done by dining them out
of their office building where there would be guests to
deliver lectures on the importance of the E-Commerce
Act. Atty. Quimbo emphasized the value of inviting the
staff out, “Ang weakness lang naman ng mga tao dito,
basta ilabas mo sila para hindi nakakasawa yung venue,
tapos pakainin mo sila, makikinig na yun. (Just bring
them to a different venue so they will not be bored.) So
we took advantage of it.”
Other face-to-face interactions employed were:
visits to the legislators offices and holding of seminars,
conferences and regular meetings to explain to both
the staff of the legislators many of the technical terms
on how e-commerce really comes into play; one-on-
one explanations given to legislators who have further
queries; and the advocates’ and staff’s briefing of
congressmen and senators defending the bill.
Testimonies
In giving testimonies, one must be able to provide the
members of the Committee with succinct information
and arguments why a certain measure is needed to
prepare the Committee during the deliberation and
Second Reading (Reyes, 1998). Quality of testimony
is important (Guither, 1980, cited in Reyes, 1998). A
witness must be concise and should give figures to back
up the points presented.
116 advocacyandpolitics
Atty. Samanodi, the staff of Senator Magsaysay
and one of the respondents, affirmed the importance of
accurate figures in the advocacy process, “Everything
should be backed by data.” In terms of the E-Commerce
Act of 2000, testimonies were mostly employed during
the committee hearings, the period of sponsorship after
the First Reading, and during the period of interpellations
in the Second Reading.
Networking
As defined by Piotrow et al. (1997), networking is “foraging
partnerships, linkages, networks or alliances with other
organizations, sectors, or communities.” This aims to
enhance the strength of one’s position most especially
in advocating a cause or socially-desirable action or
program.
The respondents relayed that networking in the case
of RA No. 8792 were employed among the advocates of
the E-Commerce law, and between and among sectors
in interest groups. Andam, one of the respondents,
said that networking is essential in strengthening the
stand or position of the advocates, “Mas maganda kung
unified yung aming stand or position on a certain e-
commerce issue. It is stronger kasi. (It is better to
have a unified position on the matter.)”
To have a unified stand, advocates released position
papers on certain issues. Advocates exchanged position
papers during meetings and then make sure that they
give the key people who will be defending the bill and
who will be working on the bill, copies of their position
papers so that they will know the rationale behind why
advocates propose certain provisions.
To be able to avail of the required and related e-
commerce data, this type of strategy was also utilized.
The advocates had to connect with information
technology (IT) people in the Philippines and other
countries abroad, particularly with the US Embassy
(which was assisting the advocates at that time).
According to Atty. Samanodi, networking with them
was done through e-mail, telephone conversations
and faxed letters. Accordingly, they got all the inputs,
numbers, or at least the estimates which they needed
for the deliberation of RA No. 8792.
Alliance Building
This strategy, according to Andam, is an integral part
of the advocacy process. This is where you establish
relationships with the key people who will be “calling the
shots” or those people who are in charge of working on
the passage of the E-Commerce bill into law. Alliance
building, in the case of RA No. 8792 was employed
with the advocates and with the people in government
who were working on the bill. This was generally done
on the committee level. This is similar to Brim and
Duston’s (1983, as cited in Reyes, 1998) advice that
the best time to approach is before the committee has
reported on the bill.
Piotrow et al. (1997) emphasized that,
“Communication strategies depend on credible sources
who are trusted and respected by people”. Consequently,
persuasive communication depends on trust as well as
expertise - people will not follow advisors they do not
trust.
Andam, acknowledged the magnitude of trust in
the alliance building of the advocacy.
The advocates worked closely with the technical
working group. “We really sat with them and really
discussed as if we were part of the technical working

group. [Thus] we were treated as part of the technical
working group.”
Alliance building was also utilized in the event of
the One Internet Day Celebration in both Houses where
legislators were invited to speak about thier stand on
the proposed E-Commerce Act.
Tapping Key Legislators
This strategy is done to convince a legislator to agree on
the measure. This includes asking key legislators and
influential persons to persuade other legislators.
According to Reyes (1998), one way to tap influential
persons is to contact government policy-makers. The
purpose is to gain access to a member of Congress or
agency official when other officials do not seem open to
the idea.
In the case of the E-Commerce Act’s passage in
the House of Representatives, the advocates tapped
the committee head on the Committee on Trade and
Industry and not the congressman with a constituency
to serve. Andam explained, “I worked closely with the
committee secretary who was apparently the one who
is doing all the paperwork involved. So we worked with
her; we established a professional relationship with
her.”
Mass Media
This includes the print and broadcast media that were
utilized in the policy advocacy process.
A good communication strategy combines different
media to repeat and reinforce key messages. This is
because the same channels of communication do not
reach everyone. Thus, a multimedia approach is the only
way to reach a substantial proportion of the audience
(Piotrow et al., 1997).
However, in the case of the RA No. 8792, some
respondents stated that this type of strategy was not
used too consciously and only on a minimal level. They
did not use it since there was already media interest
in the bill, especially in the information technology
section of the newspapers. Atty. Quimbo shared,
“Minsan kulang yung balita, ano yung gagawin mong
balitang local? So, ‘Ito, gumagalaw yung e-commerce.
(Sometimes the news are insufficient, what can you
use for local news? Here we have e-commerce on the
move).” By publicizing the effort and the fact that there
was an e-commerce bill that was pending in the senate,
the media also advocated for it, although not directly.
Also, some of the press releases related to the
E-Commerce Act were, according to Andam, mostly
individual efforts of the congressmen and senators.
Some publications that were released by the
advocates were: the book entitled Business@Philippines.
com, which was distributed to the office of the senators,
in the hopes that the staff in charge of the bill would
read the book, and then by reading the book, they (the
staff) will also inform their principals (Senators) of the
importance of the bill; and the E-Primer: An introduction
to E-commerce which was released on January 2000 and
was distributed to the legislators in both Houses before
the floor deliberations, and to the Committee on Trade
and Industry (Senate) before the Second Reading.
Key Strategy in the E-Commerce Act
Of all the techniques open to public interest
representatives, the personal presentation of
argument to government officials is thought to
philippineinternetreview
be most effective (Berry, 1997 as cited by Reyes,
1998). This is backed up by Rogers (1983, cited by
Piotrow et al., 1977), who conveyed that by the end
of the 1970’s the accepted view of mass media was
that they were effective for increasing awareness
but that only interpersonal communication could
persuade or motivate action.
This was demonstrated in the case of the E-
Commerce Act of 2000.
Although one of the respondents from the
Senate stated that the use of electronic mail
facilitated the passage of the E-Commerce bill, the
rest of the respondents acknowledged that face-to-
face interactions was the one that truly facilitated
the passage. This is because they deal with the
people directly.
The advocates personally talked to them and
adviced them. Also, they did not just give the primer
and their position papers to the legislators; they made
sure that they were there to explain the material so
that they could address further questions. Andam
affirmed, “Tingin ko it is really face-to-face kasi
nothing beats personal explanation to the legislator.
Kasi at least kapag may mga follow-up questions you
are able to address it at that point already.” She
added that they cannot anticipate all questions. You
can only know their questions when they actually have
read the paper and you find out that there are still
some issues you were not able to address. Thus, one
cannot trust that single position paper could address
all the issues and concerns of the legislators.
Moreover, alliance building was also done face-
to-face. Trust and confidence of the key legislators
could not be obtained if it were not for the face-to-
face interactions.
Atty. Quimbo recognized that, “In so far as I am
concerned, we would not have been as successful had
we not concentrated on face-to-face interaction.”
Communication Problems
during the Policy Advocacy
According to the respondents, the major problem in
their advocacy was the ignorance of the senators and
congressmen on e-commerce transactions. Since it
was a new technology at that time and it was not
really practiced by most of the legislators, particularly
the elderly ones, there was a resistance at first. With
this, the chairman of both Houses had a difficult
time hammering the new concept so that it will be
acceptable to everybody.
Although some of the legislators have a working
understanding of the concept of e-commerce, some
issues were not easily understood. In fact, some of
them complained that it was too technical. However,
the technicality of the E-Commerce Act cannot be
avoided since it involves technical components.
There was also the problem in the availability of
e-commerce data in the Philippines. E-commerce
related data, during the policy advocacy, were very
important in supporting the positions and provisions
being lobbied in Congress. According to one of the
respondents, although there were some data, they
were not complete and updated.
Pointers for Future Advocates
There is no one set of ‘lessons’ on advocacy that needs
to be learned. However, pointers were given by the
respondents of the study for future policy advocates:
advocacyandpolitics 117
 philippineinternetreview

a) First of all, you should know the terrain. Many REFERENCES

people who go to Congress to advocate for certain
bills or certain issues do not know how to lobby.
You should ascertain the process on how legislation
Alicias, MDG. (2003). Handbook on advocacy
works.
b) After knowing the terrain, find out the key persons
strategy and techniques development. Manila,
that you need to talk to in each office. You do not Philippines: Institute for Popular Democracy.
go through the office of the Senate President and
expect that other senators would know about the Andam, Z. (personal communication, Feb. 9, 2004).
issue. You have to go to each and every office door.
So talk to each and every senator’s staff, or staff-in- Andrade-Jimenez, H.S. (2001). Preventing the
charge for a particular issue. The easiest is to seek “love bug” from biting again. http://itmatters.com.ph/
an appointment with the chief-of-staff and then the features/features_01122001d.html (Feb.21, 2004).
chief-of-staff will probably introduce you to the staff
in-charge for that. Anigan GR. (personal communication, Jan. 16, 2004).
c) When you already know the key persons in having
your proposed provisions enacted, start off by Disini, JM., Jr., & Toral, JC. (2000). Republic Act No.
establishing a relationship of confidence with them 8792 implementing rules and regulations of the Electronic
– whether it be at the House level or the Senate Commerce Act. http://www.disini.ph/downloads/
level. Gaining their confidence and trust is essential EcomIRR%20Annotations.pdf (Jan. 11, 2004).
so that they will listen to your issues and concerns.
d) In getting your proposed provisions enacted, you
Estella, C., et al. (1997). Uncovering the beat.
have to entail all measures that will ascertain that
those provisions will be enacted. Know your strategy
Pasig, Manila: Philippine Center for Investigative
and carefully deliberate on what is effective (e.g. Journalism.
Plan A, Plan B, etc.). Map out a strategy and make
sure that you implement it. Favis-Villafuerte, N. (2001). Understanding…
e) Patience is essential during the advocacy. Do not fight cyber space. Makati, Philippines: Apples of Gold
and debate with those who do not agree with you. Publishing.
Just patiently explain to them what your proposed law
is all about. Eventually they will accept. Johns Hopkins Center for Communication
f) Compromise is important. You have to be open Programs. (ND). “A” Frame for advocacy. http://
to amendments and opinions. You cannot be self- www.jhuccp.org/pr/advocacy/ (29 Aug. 2003)
righteous because it is a committee work. You have
to accept their proposed changes in the bill so that Navarra RJ., Jr. (personal communication, Dec. 17, 2003).
it can become a law.
g) Do good research. If you are not prepared when Piotrow, PT., et al. (1997). Health communication:
you are in the floor the legislator defending the bill lessons from family planning and reproductive
will also be left hanging.
health. USA: Praeger Publishers.
h) You have to attend all meetings. By being present,
you are able to monitor and guard your proposed
provision; at the same time have your say at
Quimbo, RS. (personal communication, Dec. 17, 2003).
whatever is being discussed.
i) When you meet with the key actors, you must have Republic Act No.8792 - An Act Providing for the
a goal in mind and be prepared. Accordingly, you Recognition and Use of Electronic Commercial and
must do your paperwork. Non-commercial Transactions, Penalties For Unlawful
j) Position papers should not be too long and should be Use Thereof, And Other Purposes. 2000.
redrafted for their (target person) understanding.
Make it in bullet forms because most legislators opt Reyes, LC. (1998). The policy advocacy process of
to read short, brief papers. the National Water Crisis Act of 1995 (Republic Act
No. 8041). Unpublished Master’s Thesis. Institute of
Personally deal with the key actors. The process does Development Communication, UPLB.
not stop at giving them position papers and other
research materials. You cannot trust that a single Samanodi, S. (personal communication, Dec. 17,
position paper will be able to address all their issues 2003).
and concerns. Those are only supplementary. You
have to deal with them personally so that your stand
Toral, JC. (personal communication, Jan. 9, 2004).
will be properly explained.
Toral, JC. (2001). History - one internet day http://
www.oneinternetday.com/history.php (Jan 11,
2004).

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of the Philippines: a compilation and analysis
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Communication, UPLB.

118 advocacyandpolitics
T he Internet gave its users
the profound idea of having
a transparent and efficient
governance. Although much
is still to be desired on this
subject, numerous initiatives
are gaining momentum.
 philippineinternetreview

by Mayumi Canuto diskettes. I heard about the Internet at that time,

but the computer shops do not offer the use of the
Mayumi Canuto is the winner of Internet as the rates were very steep.
the 1st Philippine Internet History
Today, as I write this article, Internet technology
Writing Competition. has become more accessible and affordable, and
the current PC models have made the models of
the 1980’s jurassic. To date, I count four (4) shops
renting out computers, or what we call “Internet
ne of the lures of writing this article is also
Cafés” within the barangay where I live, when before
being able to satisfy a personal curiosity—of
these shops were non-existent. These cafés are all
how a place that used to be a town not so
situated in the house of the owner— that is, a room
much known except for its quality shoes could
facing the street is refurbished or converted into a
become a burgeoning city that has completely
business establishment. The entire city has about
transformed itself into a model place to live and
four (4) Internet cafes in each of the 14 barangays.
do business in.
Aside from the owner’s houses, Internet cafés can
also be found in the Riverbanks Center and other
Living in Marikina all my life and witnessing the
commercial establishments in Marikina situated near
massive improvements around, especially because
the marketplace and in the proximity of schools.
I have always lived in the proximity of the Marikina
River, made me want to know if the place where I
Visiting the local internet cafés in the area, I observed
live and the assertions made by our politicians hold
that a typical establishment holds about 10 to 12
true. Modernization not only comes with seeing
PCs, networked using UTP (Unshielded Twisted Pair)
infrastructure being built, although this accounts for
cables held by one switch. Most if not all the local
most of it, but also being able to respond to the call
internet cafés cater to network gamers, although
of the times. By this I mean that not only the physical
residents also use the cafés to check websites
aspects of the city is changing, but also the way the
to find jobs, write email, chat, or do research for
people see computerization as a concept to facilitate
homework, mostly through search engines like
how things are being done. In other words, if the
Google, Yahoo and MSN. Internet cafés also offer
people living in what we call a newly transformed
other range of services like tutorials, PC repair and
and modernized city have also been re-engineered
troubleshooting, scanning, design of resumés and
to act accordingly, then transformation has hit its
business cards, invitations, and printing and fax
mark.
services. Internet is available through a dial-up
facility, with mostly Globelines as the ISP. PLDT also
One of the aims of this article is to be able to span
provides telecommunication services.
the period whereby the city has actively made use
of computers, the Internet, built their computer
departments in the city offices and promoted
automation as a faster way of doing transactions.
It will discuss the benefits it derived, opportunities
yet to be seized, the vision being pursued, and the
challenges being encountered in line with keeping up
with modernization in the city.

The use of the Internet started in the Philippines

during the turn of the 1990’s and went live in 1994.
I could still remember that we had computer classes
in the late 1980’s and Model 486 was the fad. By
the time the early 1990’s came, there was a furious
change in computer models and technologies. I of
course witnessed the changes in the University and
not in my hometown. When I used to type reports
in Wordstar—using a PC with a black monitor, green
fonts and blinking cursor—I was also witness to the
evolution of the Windows-based PC with a more
appealing screen and an office suite, not to mention
a mouse. At the time I was doing my reports in
the mid-1990’s, I relied on the computer shops
sprouting along Katipunan Avenue. There were no
computers being rented out in Marikina City. Neither
were there any stores, which sell floppy disks nor

120 themarikinastory

Even if DSL could be made available, most owners do
not opt to use them since network gaming attracts
bulk of the users and provides more revenue.
Internet speed via DSL purchased is normally only
at 128 Kbps. Because of this, the average rate for
an hour’s use of the PC is Php 20.00 for network
gaming and Php 25.00 for Internet use. If you do not
use up one hour, the owner or the keeper of the café
charges you in increments of PhP5.00, depending on
the time that was consumed. True to the concept
of a café where one can have refreshments while
using the computers, these establishments offer
snacks to patrons similar to the costs in the sari-
sari stores. Hardly is coffee served, unlike in the
more posh Internet cafés, where charges climb as
high as Php70.00 per hour (for those with complete
amenities and found in exclusive or prime locations).
Customers of these local Internet shops range from
grade schoolers and teenagers to yuppies. An
Internet café fronting Provident Villages, a shop
converted from what used to be a beauty parlor,
opens at 10 a.m. Customers already come assoon
as the shop opens. Lull occur at 2 p.m. to 4 p.m.
Peak hours are from 4 p.m. until closing time, which
is at usually at 10 p.m. The keeper attributes this to
the fact that it is around this time that people are
done with school or with work and have enough time
to go to the cafés. Weekends are particularly good
business days.
It could be observed that the local internet cafés
in Marikina City is akin to a family den, except that
Mom is not around to admonish or to set limits
on the noise level and the length of playtime. It
sometimes tend to be too relaxed at times, as
people doing research are overpowered by the noise
of the network gamers. Local Internet cafes do not
have dividers or cubicles that allows privacy for
each user. PCs are normally lined up in a row on a
long table, where players or users sit side by side.
Local Internet cafés also do not offer peripherals
and accessories per PC like scanners, speakers,
microphones, printers and webcams. Not all PCs
have CD-ROM drives since most computers are
used for network gaming.
Status of Telephone Service
As of July, 2001
Location Capacity Working Available
North Marikina 38,300 lines 35,895 lines 2,405 lines
(Along A. de Guzman St.,
Con. Uno)
South Marikina 50,882 lines 33,431 lines 17,451 lines
(Along Marcos Highway,
Cainta Rizal)  
T O T A L 89,182 lines 69,326 lines 19,856 lines
Figure 1
philippineinternetreview
Based on the statistics (Figure 1), we can see
that the city’s phone line capacity is not yet
saturated and can make way for businesses
and even households to have a better chance
of hooking up. Based on a 2002 demographic
data available, Marikina City has a population of 427,
037, translating to roughly a person to phone
ratio of 6:1. Household count, on the other
hand, is at 90,636 in year 2002. Therefore, a
ratio of one phone to one household, based on
the capacity as illustrated, is achievable. Since
telecommunication lines are the primary conduit of
Internet data and its availability a determinant of
whether a city could afford to go online, we could
infer that telecommunication is not a bar for the
City to achieve its goal of enjoining the populace
to use Internet technology since there are plenty
of telephone lines. Currently, only one out of 10
households in Marikina have Internet connection,
translating to approximately 10,000 internet users
in the entire city.
The time the Internet and the concept of hitech
was sweeping the country was also the time that
the Fernando’s came to office in Marikina City.
Then Mayor Bayani “BF” Fernando did not only
transform the physical infrastructure or “look” of
Marikina City by improving the roads, cleaning up the
river and transforming it into a park. Marikina was
also envisioned to be a modern city where people
need not go to the city hall to conduct transactions
in person. Posted conspicuously in the City Hall are
the following: “The best city hall is where no people
go,” implying that transactions are envisioned to be
conveniently done online.
The Marikina City Council reinforced this vision by the
enactment of an e-government resolution, which was
passed last year (2003)—the “Resolution Adopting
the Revised Marikina Computerization Framework.”
In compliance with the resolution, a Management
Information System (MIS) Division was set up to
ensure total computerization of city government
operations, replacing the traditional manual system
of the local government. In September 2003, the
Marikina City government commissioned BayanMap
Corporation of the Lopez Group of Companies to
install the Geographic Information System (GIS) for
themarikinastory 121
 philippineinternetreview
the city. Among the types of services the citizenry
can enjoy through this computerization sweep are
access to records involving methods of processing
documents like renewal of business licenses;
health advisories; and various government policy
agenda. Information services on taxes, legal
matters, public service, police, fire department
and education, among others, will also be more
accessible. A call center will be set up by the MIS
Division, envisioned to have command and control
functions in the future.
Part of the computerization
effort is a website for
Marikina City. The website
has 24 main slides
supporting the homepage.
The homepage gives a view
of the Marikina City River
Gazebo, the picture of the
City Mayor, Mrs. Maria
Lourdes “Marides”
Fernando (MCF) and
other advertisements and
thumbnails to promote the city. It also offers links
to city government information, city news, city
radio station, e-procurement announcements,
e-governance write ups, business opportunities
in the city, community bulletin, guestbook,
and contact information/directory of the city
government officials and personnel. There
are less than a hundred links leading to the
e-procurement files and community bulletin
postings. There is a city map that can be found
in the website and a downloadable brochure of
the city.
According to Mr. Adrian Salvador, Chief of the
General Services Office (GSO) of the Marikina City
Hall, Marikina set up its website in 1998 as a pilot/
test project by then Mayor Bayani “BF” Fernando.
The project was commissioned to Web.Com,and
used Mosaic Communications (Mozcom) as the
ISP. The (MIS) Division as set up will take over
the website’s operation and maintenance in 2004.
“At present, out of the approximately 1,500 LGUs,
only 184 have web presence, and Marikina is one
of them,” Mr. Salvador proudly said.
He attested to the gradual shift from the manual
to the computerized mode of doing transactions
in the city. Marikina City currently performs
online bidding process through the web. An e-
procurement icon is placed on the homepage
and carries links to notices of public auction,
invitations to bid, and bid resolutions. City
equipment which are unserviceable and need
to be disposed of are listed and posted in the
website for interested buyers. Instead of going to
the city hall in person, a buyer can be informed
just by visiting the city’s website. Purchases are
made transparent as the winning bidders and
awards are likewise published on the website. Mr.
Salvador foresees an EPS (Electronic Payment
System) being set up in the future to support
this infrastructure.
122 themarikinastory
Ms. Sally Balagot, formerly of the Marikina Public
Information Office (PIO) said the Marikina City
website was used as a vehicle for people to know the
services offered by the Marikina City government, and
to provide important facts about the city. Aside from
complying with the E-Commerce Act as mandated
by the Office of the President, whereby government
offices should have web presence by year 2001, the
city considers the value of the website as a stepping
stone into global competitiveness. She reiterated
the city’s vision of becoming a “little Singapore”—
its citizens well-mannered and the city clean and
progressive.
The website was promoted throughout Marikina City
through radio announcements (DZBF, the local radio
station), the city newspaper and billboards. Eventually,
the website reached international viewership and
has become an avenue where its citizens­particularly
ht OFWs—can read news and information about their
hometown. To date, the guestbook lists a minimum
of 10 visitors per day, the community bulletin 15
visitors a day, and the city e-mail receiving roughly
20 notes a day, within and outside Marikina. Foreign
presence has been felt with visitors of the site from
Sweden, China, parts of Europe and the US sending
inquiries about investment opportunities in Marikina’s
shoe industry. The City getting into the Guiness Book
of World Records in 2003 for the world’s biggest shoe
also contributed to the healthy rate of web traffic.
However, there is still no online ordering system and
inquiries are responded to by provision of a list of
shoe manufacturers or referrals to the head of the
city Trade and Industry Office.
Ms. Balagot disclosed that the Marikina website was
patterned after another LGU’s website, which Mr.
Salvador acknowledged.
As the technical aspects of
hosting and maintenance
is left to the service
providers (later on to their
own MIS), brainstorming
on the web content is the
task of the Marikina Public
Information Office (PIO),
with the office of the City Mayor having the final say
on which items and segments are to be published.
Ms. Balagot, assigned to monitor the website—
responds to queries made online; reads comments,
observations and points of improvement for the
website; and occasionally practices censorship
of wayward messages in the community bulletin.
She said although city hall personnel welcomed
the website and the chance to go online, the
technology has yet to be maximized. As much as
400 personnel can be afforded e-mail addresses
for use in the domain but only 18 are active. There
are no links to commercial or other government
agencies from the Marikina City website, albeit it
has links to the Marikina City Council of Fashion
website and Secretary Bayani Fernando’s website.
She acknowledged that the website may need to
be more aesthetically pleasing and that additional
information can still be added to address the needs
of the people researching about Marikina City. More

features can be explored,
such as accomplishment
of more egovernment
transactions, inclusion of
the GIS, placement of an
online ordering system,
and the like. She said
that the website is still
in the process of further
improvement.
Mr. Bernard Berja, an
MIS consultant, now
heads the MIS Office,
which was mobilized
during the second semester of 2003. He is a
professional IT services consultant with a wide range
of experience both here and abroad. Together with
city government representatives, he surveyed the
extent of computer modernization in other cities prior
to starting construction of the Marikina MIS Office.
He observed that many LGUs spent millions of pesos
in modernization efforts but were not very successful
in making technology work for them, chiefly because
government employees and the representatives
who purchased the technology were swayed by IT
salesmen and marketing people. In the end, the
users were either confused on what they have, do not
know how to use the technology, or have purchased
equipment and software which are not suitable to
their needs. For Marikina, Mr. Berja used his work
experience and lessons learned from other LGUs to
identify the specifications for the construction of the
MIS Office. They then called on bidders to supply
the specified equipment, software and services.
They called on a bidding for the purchase of a central
server in November 2003. The server is currently set
up in the new MIS Office. The server processes and
stores all pertinent Marikina City government files,
and has redundancy and other security features. The
server has a net capacity of 620 GB of data.
He also revisited contracts between Marikina
and IT companies servicing the city government,
and worked on creating new contracts to the
advantage of Marikina. Starting 2004, Marikina will
be hosted by e-PLDT instead of Moscom, and web
development and maintenance will be done by an
in-house MIS team. A programming team, about
seven to ten people, is currently working to develop
the back end applications/modules customized to
the needs of the different offices. In the future, the
public can also benefit from these functionalities
as these can be accessed through web technology,
subject of course to different levels of access.
Priority modules to be developed by the team are
related to revenue collection, to help fund ongoing
construction. The Marikina Treasury Office is now
using its own system, but this will be replaced by
a new one this year. A new, accurate and more up
to date database is expected to be generated from
the use of this new system.
Marikina now has a network capacity of a meager
128 Kbps. In anticipation of the city-wide shift from
the manual to the automated form of transactions,
philippineinternetreview
the Marikina City
government requested
PLDT to lay down new
cables with 1MB capacity.
PLDT will complete work
on it by this year. The
Office of the City Mayor is
also pushing for the MIS
Office to be open and
operational by the end of
this year. The MIS Office
will have a receiving
area, a conference
room, cubicles for the
Call Center personnel,
an administration area, and a server room with
glass panels (a symbol that they believe in
total transparency). Kiosks will be put in areas
around city hall,so the public can conduct online
transactions such as visiting the website, paying
their taxes online, requesting for information,
downloading forms, and the like. In the future,
access of Marikeños to the city hall offices is also
seen to be done conveniently at home, in the public
schools and libraries via WAN.
Marikina has come a long way. As a resident, I
feet the city government strives to keep up with
the modern times, and the changes made in line
with modernization though gradual, is picking up
speed. The city still has some way to go in terms
of realizing its vision of an online and paperless
transaction system, promoting the use of the
Internet as the medium for business and leisure,
and perhaps making it a way of life among its
residents. This may be attributed mainly to the
fact that Internet access still remains a privilege
— not all homes have computers, a reason
why there is a proliferation of Internet cafés.
Public education in the area has just started
to incorporate the Internet in its curriculum,
as computer basics need to be taught first.
Provision of computers is a challenge. I addition,
we can say that not all users are receptive to
using technology. I know of some people who
still get intimidated by a computer. For those
who currently have access, not eveyone is aware
of the power of the Internet, because many are
still unexposed and unaware of its breadth and
depth.
For all its worth, it is notable
that the City while busy with
promoting its world class
shoes and trade has tagged
information technology
as an additional medium
to reach more people. It
is very encouraging to
realize that my hometown
is maturing and keeping up
with the times. Perhaps in
the next decade, information technology would pull
the direction of trade and industry in the city. All
it would take now is for Marikeños to visit the city
website.
themarikinastory 123
 philippineinternetreview

Father of the
Philippine
Internet

His persistence and patience paved

the way for the Internet connectivity
we are enjoying today.

drwilliamtorres 125
 philippineinternetreview
A Fat h e r ’ s M e s s a g e
Janette Toral (JT): Ten years ago, did
you envision the Internet to reach its present
state?
Dr. William Torres (WT): It has gone
beyond my expectations. At that time, I saw
it simply as a tool for communicating and
accessing information. That’s all. But now,
because of its useful application in business,
the Internet has gone a long way. It is now the
main, if not the sole, information infrastructure
for most businesses today.
JT: Which sector do you think has benefited
the most from the Internet?
WT: It is the private sector. Because of it, a
lot of enterprises have enhanced their business
processes with ICT. To a certain extent, some
educational institutions have also benefited.
JT: How would you describe the Internet
evolution in the past 10 years?
WT: Briefly, the first five years was about
building the infrastructure. The main
applications were email and surfing. During the
second half, Internet applications became more
sophisticated—e-commerce and e-business
took place. The World Wide Web (WWW)
is the Internet application that gave rise to
many enterprise-oriented applications. In the
beginning, we were just interested in access.
People would simply access the Internet and
do whatever they wanted to do. However, we
came to realize that there’s a bigger purpose
to having access. Thus putting up content,
websites, and portals became important. The
Internet user became interested in something
of value and something that can contribute
towards increased productivity. The dotcom
mania was in response to expectations that any
content placed on the Internet will be accessed
by people. However, their interests were pegged
on the value of information to their lives and
their work. They use it in education, business
and others.
JT: What do you think are the reasons why the
Internet has not taken off to a greater extent
compared to other countries?
WT: One deterrent in the Philippines is that
Internet access is not yet at the stage where
it is simply “taken for granted.” Broadband is
126 drwilliamtorres
available but still quite expensive. We’re not
moving as fast as we should in our infrastructure
build-up. The price of International Private Line
(IPL) then was not only expensive, but it was
in short supply. Today there’s a glut in IPL and
that has made it affordable. On the other hand,
being able to distribute bandwidth nationwide
and interconnecting different provinces are still
quite expensive.
I also do not agree that we are behind, as
implied in many international reports. The
measurements or criteria used in ranking
developed, underdeveloped, and developing
countries in ICT development should not be
the same. Consider telephone density, for
example: the Philippines can’t catch up using
this measure, which is expressed in terms
of the number of telephone lines per 100
persons. I believe that for the developing
and underdeveloped countries this should be
based on how many people have access to a
telephone, or how far or near a person is from
a payphone. With respect to the Internet, we
are measured on access that takes place from
the home. Instead, we need to factor in shared
community access, then the number of people
with Internet access will increase.
JT: With telcos competing with traditional
ISPs today, how is Mozcom coping and keep its
organization strong?
WT: We are diversifying to value-added
services. It is not true that we will always remain
strong in a given area. We have to change our
direction, moving from access to value-added
services. The health of our organization will
come from our ability to innovate. For example,
the WWW is an innovation that came out from
the Internet. The World Wide Web gave birth
to numerous applications like e-commerce. We
need to move on from the usual things that we
do to new things.
Mozcom had more than 70 branches and
partners before. Many have closed because they
were no longer viable due to telcos penetrating
the market. We now have only between 40 and
50 PoPs (points of presence). Incidentally, I
believe that the number of “independent ISPs”
will come down to less than 10 within the next
10 years. It is difficult to fight the telcos since
they own the infrastructure. ISPs should now
take the attitude that they can work together

with the telcos. If everyone is into connectivity
only, the bigger players will surely kill the
smaller ones. But in the area of value-added
services, there’s room for competition because
there are numerous possible applications one
could develop for a wide market.
JT: I noticed that you are quite active in
promoting e-learning. What would encourage
schools to really consider it?
WT: We have to push for it more aggressively.
We need to educate the market – showing our
educational and training institutions how e-
learning can lower costs and go beyond the
campuses into a larger market. In general, we’re
interested in applications that have nationwide
impact. That is why we support e-government,
e-commerce, and e-learning for education.
Philippine education needs all our help now—it is
a big if not the biggest problem of our country.
ICT-based innovation is the only way to go. And
we need to do this with utmost speed and on a
nationwide scale.
JT: What are the things that should take place
in order for full Internet adoption to be realized
in the country?
WT: There are numerous challenges that need
to be addressed. These include:
• The country’s current broadband map tells
us only where we have access. We should
focus on capacity and actual connectivity.
The Commission on ICT can mandate
this. A map should be able to describe the
magnitude of data flow to and from Cebu,
Manila, Davao and other points.
• We need to allocate resources for our E-
Commerce and Intellectual Property Rights
laws to be fully implemented. This includes
having a functioning computer emergency
response team.
• We need to have a Convergence Law that
will allow us to integrate and make use of
the various infrastructures like broadcast,
cable, and satellite in developing and
deploying applications. Although this is
partly mentioned in the E-Commerce Law,
the government agencies concerned did not
come up with guidelines to implement that.
• We still have piracy. We can’t really
capitalize on our intellectual property if we
don’t respect those of others. If we pirate
software and content, ours can be pirated
as well. Investment flow to our country
will be limited until our laws are properly
implemented.
philippineinternetreview
• Republic Act 7925 does not allow VAS
providers to offer voice-related services.
This has to be revised in order to make
VOIP an easy-to-access and affordable
commodity for all. At present, only telcos
can offer this service which puts ISPs at a
disadvantage and unable to maximize the
full potential of our Internet infrastructure.
In the next 10 years, the Commission on
Information and Communications Technology
(CICT) can serve as focal point. We can
consolidate our laws, policies, implementing
rules and regulations in such a way that it can
foster better competition and breed innovators
on the use of the Internet for enterprise. The
Internet per se may not be profitable but
its application in various forms in business,
education, government, will certainly create
more wealth for our country.
JT: But how about the private sector? It seems
that today’s ICT community is fragmented today.
WT: One of the many things we should do is to
think of ourselves as belonging to one industry.
We should cooperate to make ourselves better
competitors. We must be active and firm in
recommending policies. If we are a united
industry, we could have a stronger voice in
lobbying—not only to complain but to explain
issues well. Internet security is being advocated
only by a few. It should have been promoted as
a critical component of the ICT industry. People
would listen to us only if we have a strong
association.
With the CICT (which hopefully becomes a
Department of ICT soon) we can hold a high
level agency responsible for all our industry
concerns. Reporting directly to the President,
through the Department of ICT, we don’t have
to go to multiple agencies as we do now.
Hopefully, a better future will arrive sooner for
all of us!
drwilliamtorres 127
Programs and output for 2004 – 2014. Expected impact to community.

HED : Today’s internet market is rapidly changing and customers have increasing expectations so we
have to make sure we have what it takes to cope with the demands of the emerging e–generation.

The focus for the next few years will be on more relevant products that would address the basic
and unrecognized needs of the market. Emphasis would be on delivering faster access with bigger
bandwidth capacity.

Demand from the residential market has been gradually increasing as professionals and students alike
do a lot of activities from their home computers. With this realization comes the need to deliver the
needed speed and reliability of service.

The other priority is to bring down the cost of the broadband service and eventually capture the dial up
market which has a lot of limitations at the moment.

As people watch their cable and use cable broadband we want them to experience the price benefit and
the speed advantages that only SkyCable can offer.

New trends in areas of entertainment, education and business would benefit from our services. Soon we
will offer total entertainment, immediate information and easy to understand yet secure e- commerce.
World class Cable services, high capacity, high speed Cable Broadband at the most affordable price will
be our focus for the coming years.

Future of the internet for the next 10 years.

HED : A bit difficult to forecast. Who would imagine that we would have millions of cellular phone users
and the text capital of the world 10 years ago? My two cents worth... Entertainment, education and the
way we conduct business would be redefined.

As the percentage of residential computer owners increase, education becoming more modern and
companies creating new channels for advancement, the demand for convenience would, like I said, be
redefined.

The one thing that is common to all of us is that we want convenience... and that’s the future of the
internet in the Philippines –convenience!!! Convenience will be embraced in every household in its own
unique way.

Imagine having access to any available movie, not just thru Cable but thru your Broadband Internet at
home. Imagine immediate access to any information by just one click. Imagine ordering your groceries,
shopping or even calling an early morning conference... all made possible thru your affordable, high
speed broadband internet service.

The greater potential which may or may not happen is the ability to have the whole computer shabang
right in our cellphones. Now this will really make chess geniuses out of each owner...and life would
never be the same.