Manila, August 25, 2005 – The Philippine Internet and ecommerce sectors continue on a healthy pace of development and are expected to maintain an upward trajectory due to aggressive price offerings from the telcos and more varied service offering from business-to-business (B2B) sectors. Internet buyers in the Philippines are expected to grow at an estimated 22% compound annual growth rate (CAGR) while ecommerce at a 58% CAGR for the forecast period 2005-2009.

According to IDC, Internet adoption growth in the Philippines can be attributed to the accessibility and affordability of broadband connections, particularly of asymmetric digital subscriber line (ADSL), while the rise of Internet commerce, continues to be led by the B2B sector, particularly of high-value eProcurement sites. Meanwhile, though the business-to-consumer (B2C) sector lags behind its counterpart, IDC sees significant potential for this consumer segment.

Based on IDC's latest research, Philippine Internet and eCommerce 2005-2009 Forecast, the number of Internet users in the Philippines registered at 11.8 million in 2004. While there's good potential room for growth in this area, IDC believes that it is essential for market players to first be able to identify and then deliver the distinct types of access and services that would cater to specific requirements of different consumer types.

In the ecommerce front, although B2B currently enjoys a sustained period of growth, players in this sector must begin to look into adapting service offerings that will allow SMEs to conduct their respective businesses online. Payment gateways to accommodate small value transactions (micro-payments) and content services attuned to the inherent needs of SMEs are a few of the necessary components. Meanwhile, in giving the much-needed boost to the B2C sector, continued support must be given to developing value-rich content and in establishing security and privacy standards. These are necessary steps as Filipino Internet users continue to grow increasingly receptive to the Internet's "digital products" such as MP3 downloads, eBanking, personal blogs, and Internet-enabled purchases, among others.

"Though there has been marked progression in both the Internet and ecommerce space, there still remain areas for improvement. Broader Internet coverage for example, would not only facilitate greater consumer access but also effectively expand the market bases of providers and allow them to offer additional services. For Philippine ecommerce, addressing fundamental issues such as payment gateways, provisions for small-value transactions, increasing consumer awareness and confidence, and allaying privacy- and security-related fears can all be catalysts for greater ecommerce uptake," says Manuel Ravago, IDC Philippine Research Manager.

IDC's recent Philippine Internet and eCommerce 2005-2009 Forecast provides an overview of the Philippine Internet economy. The research also covered Internet users, buyers, business-to-business (B2B) ecommerce, business-to-consumer (B2C) ecommerce, and devices used to access the Internet. Market sizing is provided for 2004–2009.

For more information about purchasing the research, please contact Hazmi at +603-2169-7526 or hyusof@idc.com. For press enquiries, please contact Stephen Chong at +603-2169-7521 or ckchong@idc.com.

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