MANILA, Philippines — The government should reform the country’s Spectrum User Fee (SUF) system as the current fee structure is hindering the growth of digital infrastructure and threatening to leave millions of Filipinos disconnected, according to consumer advocacy group CitizenWatch Philippines.
SUFs impose substantial annual costs on telecommunications providers based on the frequency bandwidth they are assigned. These are calculated based on the size and type of spectrum assigned to telcos, with higher fees incurred for wider bandwidths and more commercially valuable frequency bands.
In a statement, CitizenWatch highlighted the country’s widening digital infrastructure gap, noting that internet penetration – which is the percentage of population that has access to and uses the internet – in the Philippines remains significantly lower than that of its regional counterparts.
“As more Filipinos use mobile data for work, education and digital transactions, telecom firms must acquire more spectrum to ensure service quality – but doing so automatically triggers higher SUF payments,” CitizenWatch co-convenor Orlando Oxales said.
“The system may have been relevant before, but now, it has become a barrier as it discourages investments and penalizes growth at a time when expansion is most needed,” he said.
Oxales said the government’s target of achieving nationwide internet access would not be achieved unless structural barriers – such as the existing SUF regime – are addressed.
Under the current system, telecommunications companies are charged annual fees based on the amount and type of spectrum they are assigned. While the policy is meant to regulate spectrum allocation, CitizenWatch argued the escalating costs are disproportionately burdensome, particularly as demand for mobile data continues to increase.
From 2018 to 2022, SUF collections reached P26.9 billion, peaking at P6.7 billion in 2022. CitizenWatch warned that this fee model discourages innovation and slows progress toward nationwide connectivity goals.
The group also pointed out the imbalance between public and private sector spending on digital infrastructure.
According to the group, telecommunications giants Globe Telecom and PLDT have collectively invested over P761 billion in capital and operational expenditures in recent years to drive broadband network expansion and fiber rollout.
Meantime, the government’s digital infrastructure budget, through the Department of Information and Communications Technology, totaled just P7.6 billion over a six-year span, which is far short of the P240 billion needed to meet digitalization targets recommended by the Private Sector Advisory Council.
CitizenWatch compared the Philippines’ limited public investment to more aggressive infrastructure programs in neighboring countries such as Vietnam and Indonesia, both of which have prioritized broadband expansion to remote areas.
“These countries understand what the Philippines must also embrace: digital infrastructure is not merely a commercial concern – it is a strategic national asset,” Oxales said.
To address these challenges, CitizenWatch called for the rationalization of SUFs to reflect their intended regulatory purpose of managing spectrum efficiently rather than serving as a revenue-generating mechanism.
The group proposed lowering the fees to encourage telecommunications providers to invest in underserved and unserved areas.
“Lowering SUFs will unlock more capital for telcos to invest in new cell sites, backbone upgrades, and last-mile connectivity, accelerating the nation’s transition to a fully digital economy,” Oxales said.
“These infrastructure investments directly translate to greater digital access for more Filipinos – especially critical at a time when the digital economy is rapidly growing and expanding opportunities across sectors,” he added.
CitizenWatch said that pairing SUF reforms with increased public investment and streamlined permitting under Executive Order 32 would demonstrate a “whole-of-nation” approach to closing the digital divide.
“If we are serious about inclusive growth, digital empowerment, and long-term competitiveness, we must stop taxing connectivity and instead incentivize more investments for it,” the group said.
