Building Smart Cities in the Philippines

Building smart cities in the Philippines will create several business opportunities, such as potential partnerships between the public and private sectors.

August 2022 , by Noah Imson

Throughout Asia, countries have begun to embrace the fourth digital revolution (4IR) via accelerated digital transformation, but the Philippines is lagging behind. Thus, the Philippine government is taking the initiative to establish several smart cities. The ongoing venture has witnessed some success, but some difficulties remain.

According to an article by Business World, the Philippines’ metropolitan capital, Metro Manila, ranked last in the 2022 Digital Cities Index, a report developed by Economist Impact and Japanese multinational tech corporation Nippon Electric Company (NEC)   that assessed the digitalization and smart city efforts of 30 countries. Working on criteria based on digital connectivity, services, culture, and sustainability, Manila scored a weighted average of 39.1 out of 100, much lower than the global average of 63.3.

Smart City Initiatives in the Philippines
Although the progress of the Philippines’ smart cities may seem underwhelming, interested players should remain optimistic as development is still in the early stages. Moreover, several parties are making concerted efforts to diversify the progress and development of smart cities.

Under the ASEAN Smart Cities Network (ASCN) initiative, pilot smart cities are also being deployed in major urban centers in the Visayas and Mindanao islands of the archipelago, namely in Cebu and Davao City respectively. Meanwhile, a separate project crafted by a Philippine government agency, Bases Conversion and Development Authority (BCDA), is also underway in New Clark City in Tarlac province, north of the capital region. These projects indicate the importance that Filipino stakeholders are placing upon smart city development, which should be encouraging for potential investors.

Another encouraging indicator of smart city development and potential success for investment is the Philippines’ inclination toward technology. Specifically, the country has untapped technological potential as it is widely considered a social media powerhouse as evidenced by data from a 2022 industry report wherein Filipinos ranked second globally (10 hours and 27 minutes) in time spent on social media platforms.   In the context of the smart city framework and technological adoption, potential investors should expect rapid growth.

Smart City Investment Opportunities
Given that the development of smart cities involves several industries, investors can explore a wide variety of investment opportunities. In the YCP Solidiance white paper “Can Indonesia Achieve ‘100 Smart Cities’ by 2045?” the following key areas for potential business opportunities within Indonesia’s smart city roadmap were identified: infrastructure, information, and implementation. To emulate similar smart city success achieved by Indonesia, neighboring countries in Southeast Asia, like the Philippines, could use their framework as inspiration.

With infrastructure, information, and implementation in mind, new market entrants may engage in several ways. For instance, smart city information paves the way for analytics companies to process big data, while infrastructure will incorporate players such as urban planners and real estate developers. Moreover, to accelerate implementation, smart cities need stakeholders like tech start-ups that will help elevate local digital capabilities. Although such strategies were originally applied to smart cities in Indonesia, this approach may be considered a general framework that can be adapted to a Philippine context.

When it comes to building smart cities in the Philippines, the collaboration between the public and private sectors should also be an area of interest. The government will likely seek out partnerships with private sector businesses as it will help ensure the smooth implementation of the smart city concept. Thus, both foreign and domestic players should expect an influx of potential collaborations with the Philippine government.

Given the Philippines’ commitment to its smart city development, the country has managed to position itself as an appealing investment option. As its smart city projects gradually come to fruition, the market will likely become more competitive. Thus, interested parties should capitalize immediately and explore smart city business opportunities as early as possible.

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