Creating DICT will be ‘death knell’ of IT-BPO

A RANKING government official warned the creation of a Department of Information and Communications Technology (DICT) may only result in the eventual regulation of the IT business process outsourcing industry, a move that will be the “death knell” of the biggest driver of the services sector.

The official, who requested anonymity, said in an interview with the Inquirer that the opposition stemmed from the possibility that the DICT will have as one of its functions the power to regulate the IT-BPO industry. There won’t be any problem if the DICT will only serve as an entity that will consolidate all related ICT functions currently under various agencies such as the National Telecommunications Commission and the Department of Science and Technology, the official said.

But with the way the government works, it’s likely that the DICT’s functions will be expanded to becoming an industry regulator, the official said. Worse, the department may find itself being manned by an official bent on imposing controls rather than being “promotive,” the official added.

“Proponents of the DICT told me that they have already studied the law, but I already told them to be very careful. I told them that they are naive. I’m inside the organization and I know what can happen,” the official told the Inquirer.

“What if the DICT official decides that we should curtail access to certain information due to security risks? What if that official questions the different standards being implemented by the IT-BPO industry? Regulatory bodies are not promotive bodies. We must ensure that this [proposed] agency will not end up regulating the IT-BPO industry,” the official warned.

The official also said the tax regulations are not clear, thus there is a “huge risk that looms from a tax perspective with the creation of a DICT.”

The official said these possible consequences were already discussed with the local and foreign business communities. Even the Information Technology and Business Process Association of the Philippines (IBPAP) has been warned as well.

The IBPAP expects the industry to generate $21.2 billion in revenues this year, up 12 percent from the $18.9 billion recorded last year. The industry is believed to overtake the remittances from overseas Filipino workers.

Next year, the IT-BPO industry is seen to generate $25 billion in revenues and directly employ 1.3 million workers.

Last month, the foreign business community made a renewed pitch for the passage of a measure that will see the establishment of a DICT, as this is seen to boost the Philippines’ position as a globally competitive investment destination.

In a letter to House Speaker Feliciano Belmonte Jr., the Joint Foreign Chambers of the Philippines (JFC) cited the benefits of a DICT, such as a more effective implementation of e-governance, data protection and cybersecurity measures. The creation of the DICT formed part of House Bill (HB) 4667.