Friday, 13 November 2009

RP IT spending to reach US$580M in 2011

By Alexander Villafania

MANILA, Philippines—The Philippines public sector information technology spending is expected to be worth US$580 million in 2011, according to a report by IT research firm Springboard Research. Public sector IT expenditures also include budgets for government IT projects.

This growth is pegged on the continuation of government IT projects, as well as a robust political environment that prioritizes public necessity and transparency, something that is found wanting among past controversial IT projects, such as the failed ZTE-NBN project and the much-maligned election computerization in 2004.

During a press conference Michael Barnes Springboard Research vice president for Software and Asia Pacific Research cited trends in past expenditures of the Philippine government when it comes to IT infrastructure. In 2007, IT spending was pegged at US$349.2 million, which increased to US$390 million in 2008.

In the next two years, the trend will continue as government agencies, particularly those in the national level, will spend on new IT infrastructure for both internal and public sector purposes. This growth is rated to be about 12 to 13 percent per year.

“If there are points that can be expected to show some stronger presence and spur further IT growth in the Philippines, that would be increased broadband penetration, cloud computing, service-oriented architecture, and the growing offshore outsourcing industry,” Barnes said.

Barnes, however, stressed that as for now the majority of IT spending is on maintenance. He expects this to change as there would be a shift to spending on new projects, especially with the entry of a new Philippine administration in 2010. Barnes ascribed an improving IT public expenditure to a good political environment.

He also said that one positive effect of higher investments in government IT programs is increased transparency, which should minimize under-the-table dealings between government officials and technology suppliers.

“The culture of graft is nothing unique to the Philippines; it is every country's concern. But by implementing these IT infrastructures should expose the reasons why these happen. It also forces accountability among parties involved,” Barnes said.

Past IT government projects in the Philippines have been scrutinized for various reasons, most of which is regarding questionable bidding and implementation. Aside from the failed National Broadband Network fiasco, there is also the Department of Education's “Cyber Education” project, and the current plans for the 2010 poll automation.

One of the companies that is eyeing this huge public IT spending market in the Philippines is the Public Sector division of technology firm HP. Even while it is relatively new in the public IT services deployment business in the Philippines (ostensibly dominated by IBM and its partners), the company is looking at raking in some of the government IT projects.

HP Asia Pacific and Japan Director for Public Sector Poh Chuan Tan noted that cloud computing is one of the new technologies that are being integrated into government projects, partly because of demand for streamlined IT infrastructure management and maximization.

Tan said their public IT service deployments cover a broad range of public sector requirements from healthcare, security, life sciences, social services, emergency management, web services, among others.

On the question of preventing illegal transactions during bidding and implementation of these projects, HP Public Sector Director of Sales Gerry Lim said their company exercises strict business practices when dealing with government projects.

“It is a concern that we make sure does not affect our business,” said Lim.

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