OTHER SPECIALIZED INDUSTRIES

A. Agriculture Industry
B. Mining Industry
C. Construction and Real Estate Industry
D. Not-for-Profit Entities and Hospitals
E. Airline Industry
F. Logistics and Transportation Industry
G. Electronic Commerce (E-Commerce) Industry
H. Power, Water and Telecommunications Industry

A. AGRICULTURE INDUSTRY
Agriculture, known also as husbandry or farming, is the science of cultivating plants, animals, and other
life forms for food, fiber, and fuel. The agricultural industry, which includes enterprises engaged in
growing crops, raising fish and animals, and logging wood, encompasses farms, dairies, hatcheries, and
ranches. It is a major industry in the Philippines

The development of agriculture spans thousands of years and has been affected by human cultures,
climate variations, and evolving technologies. Despite the industry's evolution over the centuries, all
types of farming still rely on methods to maintain environments conducive for raising domestic species.
In terms of plants, the land must be sustained with a type of irrigation system; for raising livestock,
rangeland must be cultivated to support animal life. Nowadays farm yields have greatly increased due to
improvements in breeding, chemicals, and technology. Yet some of these measures can cause damage
to the environment and pose health risks to humans.

A modern innovation in the agriculture industry is the Green Revolution, which began in the second half
of the 20th century. This development is cited for saving people around the world from starvation
through initiatives involving irrigation systems, production of high-yielding crops, and better
management strategies.

Today farming professionals face the daunting challenge of keeping current with increasingly rapid
changes in equipment technology and agricultural research. For instance, biotechnology is being applied
to industrial livestock operations to provide healthier animals and improve breed development,
resulting in more meat, eggs, and dairy products to meet consumer demands.

A farmer may work a single tract of land in addition to renting out a number of separate tracts. The
farmer may be the sole operator of the establishment or work within a partnership or corporation. The
agriculture industry employs a wide-range of workers including farm laborers, veterinarians, scientists,
salespeople, and soil managers.

Despite all the advances made in the agriculture field, it still remains a hazardous industry. Fatalities and
injuries due to machine operation as well as diseases and birth defects spawned by exposure to
pesticides and fertilizers are among the work-related dangers faced by agricultural workers.

Nature and Background of Specialized Industry

Agricultural activity is the management by an entity of the biological transformation of biological assets
for sale into agricultural produce. or additional biological assets. Agricultural activity covers a diverse
range of activities; for example
a. raising livestock

b. cultivating orchards and plantations

c. forestry

d. floriculture

e. annual or perennial cropping

f. aquaculture (including fish farming)

Common features which exist within this diversity include the following:

(a) Capability to change. Living animals and plants are capable of biological transformation

(b) Management of change. Management facilitates biological transformation by enhancing, or at least

stabilizing. conditions necessary for the process to lake place (for example, nutrient levels, moisture,
temperature, fertility, and light). Such management distinguishes agricultural activity from other
activities.

For example from unmanaged sources (such as ocean fishing and harvesting deforestation) is not
agricultural activity; and

(c) Measurement of change. The change in quality (for example, genetic merit, density, ripeness, fat
cover, protein content, and fiber strength) or quantity (for example, progeny, weight, cubic meters, fiber
length or diameter, and number of buds) brought about by biological transformation or harvest is
measured and monitored as a routine management function.

Biological transformation results in the following types of outcomes:

(a) Asset changes through

(i) growth (an increase in quantity or improvement in quality of an animal or plant),

(ii) degeneration (a decrease in the quantity or deterioration in quality of an animal or plant), or (iii)
procreation (creation of additional living animals or plants); or

(b) Production of agricultural produce such as latex, tea leaf, wool, and milk.

PAS 11 Agriculture

The standard applicable to agriculture is PAS 41 which prescribes the accounting treatment, financial

statement presentation, and disclosures related to most agricultural activity.

Applicability of PAS 41

PAS 41 shall be applied to account for the following when they relate to agricultural activity:

(a) biological assets;

(b) agricultural produce at the point of harvest; and

(c) government grants related to biological assets measured at fair value less costs to sell.
Inapplicability of PAS 41

(a) Agricultural produce after the point of harvest (PAS 02 Inventories)

(b) Land related to agricultural activity (see PAS 16 Property, Plant and Equipment, PAS 17/PFRS 16
Leases and PAS 40 investment Property); and

(c) Intangible assets related to agricultural activity (see PAS 38 Intangible Assets).

(d) cultural activity that is not managed such as ocean fishing and deforestation

B. MINING INDUSTRY
The mining industry sector is a major backbone of the Philippine economy. The long history of the
industry has been much affected by the vicissitudes of the international market, as well as other
domestic factors. With the adoption of the 1986 Constitution, the concept of awarding mineral rights
has been drastically changed from leasehold to a system of contracts for various modes of production.
Such changes have, as expected, temporarily unsettled the industry. The preponderance of small-scale
mining, the growing public awareness on the environment, increasing labor and energy costs are
concerns which should be addressed. Amidst all these, and in the framework of very stiff competition in
the region for investments, new thrusts and directions, without compromising general stability, are
urgently required for the overall development not only of the industry but for the whole country.

The Philippines is the fifth most mineral-rich country in the world for gold, nickel, copper, and chromite.
It is home to the largest copper-gold deposit in the world. The Mines and Geosciences Bureau (MGB) has
estimated that the country has an estimated $840 billion worth of untapped mineral wealth, as of 2012.
About 30 million hectares of land areas in the Philippines is deemed as possible areas for metallic
minerals. According to the Mines and Geosciences Bureau (MGB), about nine million hectares of land
areas is identified as having high mineral potential. The Philippines metal deposit is estimated at 21.5
billion metric tons and non-metallic minerals are at 19.3 billion metric tons, as of 2012.

Nature and Background of Specialized Industry

A country’s socio-economic development largely depends on the extent and composition of its natural
resources. Examples of natural resources include forestry, minerals, and commercial sources of energy
(like coal, oil, natural gas, and hydro power). Mining and mineral processing are activities for extraction
and processing minerals for commercial use. The mining sector is likely to contribute to the
development of the economy of any country through taxes from large-scale mining companies and
contribute to social–economic infrastructural development within the area where the mine is located.

The mining sector can:

• create employment opportunities both directly in the mines and indirectly on services to the mines,
• provide education and health services,
• increase foreign exchange reserves, (reducing a country’s foreign exchange deficit),
• improve infrastructure like roads and water supply, and
• create other economic activities to support the mines instead of importing all supplies from abroad.
A working definition of mining according to the United Nations Environmental Program (UNEP) could
simply be “the extraction of minerals from the earth”. The word “minerals” in this case would cover a
wide variety of naturally occurring substances extracted for human use. Although this definition is
adequate for our purposes, mining can also be seen as a process that begins with the exploration and
discovery of mineral deposits and continues through ore extraction and processing to the closure and
remediation of worked-out sites.

Minerals are a non-renewable resource, so mining represents a temporary use of the land. The mining
life cycle during this temporary use of the land can be divided into the following stages: exploration,
development, extraction, processing, and mine closure. In this section, we explain the various phases of
mining, the associated impact in each phase, and the suggested mitigation or amelioration measures.
The figure below sets out the five physical stages of the life cycle of a mine.

The exploration phase of mining

Exploration activities encompass all actions in the field that precede feasibility studies. Exploration
activities include initial reconnaissance flights and geophysical surveys, stream sediment studies and
other geochemical surveys, construction of access roads, clearing of test drilling sites, installation of drill
pads and drilling rigs, benching, trenching/pitting, erection of temporary accommodation, and power
generation for exploratory drilling. Exploration activities also include determining the location, size,
shape, position, and value of a body of ore using prospecting methods.

The development phase of mining

The development of a mine consists of several principal activities: conducting a feasibility study,
including a financial analysis to decide whether to abandon or develop the property; designing the mine;
acquiring mining rights; filing an Environmental Impact Assessment (EIA); and preparing the site for
production. The development phase may include such activities as

• overburden stripping and placing,

• road/trail, building and/or helicopter transport,
• drilling and trenching,
• erecting treatment plants, preparing disposal areas, and constructing services, infrastructure such as
power line or generating plants, railways, water, supplies and sewerage, laboratories and amenities.
IFRS 6 Exploration for and Evaluation of Mineral Resources

IFRS 6 specifies some aspects of the financial reporting for costs incurred for exploration for and
evaluation of mineral resources (for example, minerals, oil, natural gas and similar non-regenerative
resources), as well as the costs of determination of the technical feasibility and commercial viability of
extracting the mineral resources.

IFRS 6

 permits an entity to develop an accounting policy for exploration and evaluation assets without
specifically considering the requirements of paragraphs 11–12 of IAS 8. Thus, an entity adopting
IFRS 6 may continue to use the accounting policies applied immediately before adopting IFRS 6.
 requires entities recognizing exploration and evaluation assets to perform an impairment test
on those assets when facts and circumstances suggest that the carrying amount of the assets
may exceed their recoverable amount.
 varies the recognition of impairment from that in IAS 36 but measures the impairment in
accordance with that Standard once the impairment is identified.

C. CONSTRUCTION AND REAL ESTATE INDUSTRY

One successful business in the construction world is the real estate industry. This industry covers many
aspects of the property such as development, leasing, appraisal, marketing, and management of
commercial, residential, agricultural, and industrial properties. The industry fluctuates depending on
the economies but at the same time remains consistent since people always need homes and businesses
need commercial space.

While Covid-19 has thrown the Philippines’ economy into flux, early indications suggest that
construction and real estate is one of the most resilient sectors and could provide a platform for
national recovery. However, with construction projects delayed by lockdowns during the second quarter
of 2020, and demand for office space and high-end residential developments weakened by mobility
restrictions, the sector still faces headwinds. At the same time, the disruption of the pandemic is giving
rise to new opportunities. For instance, with the pandemic inducing a significant shift towards working
from home as companies adhere to social-distancing measures, co-working spaces are emerging as a
solution for firms seeking to decentralize while ensuring a sound operating environment for employees.
Agile real estate developers have the chance to establish a first-mover advantage and capitalize on
emerging opportunities as tenants and buyers seek projects that meet the demands of the new normal.

Nature and Background of Specialized Industry

Construction. The construction industry comprises of building, alteration, and/or repair. Examples
include residential construction, commercial construction, bridge erection, roadway paving, excavations,
demolitions, and large-scale painting jobs.
• Residential construction refers to the building or renovation dwellings. The vast majority of residential
construction jobs are small renovations, such as addition of a room or renovation of a bathroom or
kitchen.
• Commercial construction includes apartments, office and retail buildings, hotels, schools, public
buildings, industrial and manufacturing buildings, highways and bridges, sewers, pipelines, power lines,
power plants, and other civil engineering projects.

Real estate is any real property consisting of land and improvements such as fixtures (i.e., access door,
lighting, awnings, etc.), buildings, roads, structures, and even utility systems.

Here are the four types of real estate:

1. Residential - This includes both new construction and resale. A common category of residential real
estate is single-family homes. Other residential real estate’s include condominiums, co-ops,
townhouses, triple-deckers, high-value homes, duplexes, quadplexes, vacation, and multi-generational
homes.

2. Commercial - Included in this type of real estate are strip malls, shopping centers, educational and
medical buildings, hotels, and offices. Apartments, although used for residences, are often considered
commercial since they are owned to produce income.

3. Industrial - This kind of real estate includes manufacturing buildings and property, including
warehouses. There can be various uses for industrial buildings such as research, production, distribution,
and storage of goods. However, buildings where goods are distributed, are considered as commercial
real estate

4. Land - Land can either mean vacant land, ranches, or working farms. Subcategories of this kind of real
estate include undeveloped, early development or reuse, subdivisions, and site assembly.

How the Real Industry Works

1. Development

Real estate development is the process of purchasing raw land, rezoning, renovation and construction of
buildings, as well as sale or lease of finished products to end-users. Real estate developers end profit by
adding value to the land such as creating buildings or improvements or rezoning and taking a risk in
financing a project.

2. Sales and Marketing

Firms that focus primarily on sales and marketing work with developers to sell buildings and units that
they create. Commissions are earned by these firms for creating all marketing material and using sales
agents to sell completed units. Sales and marketing firms focus more on new units.

3. Brokerage

A brokerage is a firm with a team of real estate agents or realtors as employees. The real estate agents
help in facilitating a transaction between buyers and sellers of property. One of their jobs is to represent
either party and help them achieve the purchase or sale with the best possible team.

4. Real Estate Lending

Lenders include banks, private lenders, credit unions, and government institutions. They play a huge role
in the real estate industry since all properties and developments use debts to finance their business.
5. Property Management

Property management firms play a role in helping real estate owners rent out the units in their buildings.
Some of their jobs include collecting rent, fixing deficiencies, performing repairs, showing units, and
managing the tenants. They charge a fee which is a percentage of the rent to property owners.

6. Professional services

There are a variety of real estate professionals who work in the industry and help make it function. The
most common examples (other than the ones listed above) are accountants, lawyers, interior designers,
stagers, general contractors, construction workers, and tradespeople.

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 15 provides guidance on how to determine whether an agreement for the construction of real
estate is within the scope of IAS 11 Construction Contracts or IAS 18 Revenue and, accordingly, when
revenue from the construction should be recognized:

 An agreement for the construction of real estate is a construction contract within the scope of
IAS 11 only when the buyer is able to specify the major structural elements of the design of the
real estate before construction begins and/or specify major structural changes once
construction is in progress (whether it exercises that ability or not).
 If the buyer has that ability, IAS 11 applies.
 If the buyer does not have that ability, IAS 18 applies.

If IAS 11 applies, what is the accounting?

If IAS 11 applies, revenue is recognized on a percentage-of-completion basis provided that reliable

estimates of construction progress and future costs can be made.

If IAS 18 applies, service or goods?

Even if IAS 18 applies, the agreement may be to provide construction services rather than goods. This
would likely be the case, for instance, if the entity is not required to acquire and supply construction
materials. If the entity is required to provide services together with construction materials to perform its
contractual obligation to deliver real estate to the buyer, the agreement is accounted for as the sale of
goods under IAS 18.

D. NOT-FOR-PROFIT ENTITIES AND HOSPITALS

Not-for-profit organizations are types of entities that do not earn profits for its owners. All of the money
earned by or donated to a not-for-profit organization is used in pursuing the organization's objectives
and keeping it running. These organizations play a vital role in building healthy communities by
providing critical services that contribute to economic stability and mobility. They also strengthen
communities in a variety of important ways.

On the other hand, according to the World Health Organization (“WHO”), a healthcare system consists
of all organizations, people and actions whose primary interest is to promote, restore, or maintain
health. It includes efforts to influence determinants of health as well as more direct health-improving
activities which encompasses the pyramid of publicly owned facilities that deliver personal services. The
goal of a healthcare system, such as a hospital, is to improve health and health equity through ways that
are responsive, financially fair, and best or most efficient use of available resources, while achieving
intermediate goals such as greater access to and coverage for effective health interventions and making
sure that provider quality and safety are not compromised.

As many countries experienced economic downturns and threats to public safety due to pandemic
outbreaks and emerging infection diseases, many realized the growing importance of NPOs and
healthcare – now more than ever, improving the health of a nation’s citizens can directly result in
economic growth, as there will be more people able to conduct effective activities in the workforce.

Nature, Background, and Overview of Specialized Industry

The Philippine healthcare delivery system is a complex set of organizations interacting to provide an
array of health services. It is composed of the following tranches:

• Public - a largely financed through tax–based system with a decentralized management system at
national and local level, providing for social health insurance of the general public.

a. National: Department of Health (“DOH”) - Specialty, retained and regional hospitals, medical centers,
DOH representatives.

b. Local: Local Government Units (“LGUs”) - Provincial and district hospitals, regional health units,
barangay health stations.

• Private - a largely market–oriented fragmented system of profit and non-profit providers where fees
are paid at the point of service.

a. Profit: Commercial, market-oriented, and includes private practitioners, private clinics and
laboratories

b. Non-profit: Non-commercial, service-oriented, and composed of socio-civic groups, religious

organizations, or foundations

The WHO health systems framework proposes six building blocks that, when taken together, (a) gives a
picture of the state of health care system in a country, and (b) help achieve the intended goals and
outcomes. The discussion will use this framework as an outline in discussing the country’s healthcare
system overview.
DOH serves as the representation of leadership & governance in this industry. It is mandated by the law
to provide national policy direction and develop national plans, technical standards and guidelines of
health. It also provides technical assistance, capacity building, and advisory services for disease
prevention and control, as well as supplies medicines and vaccines to its scope. As the lead agency for
the Philippine health care (EO 119), its mission is to ensure accessibility and quality of health care to
improve quality of life of all Filipinos, especially the poor, aiming to produce better health outcomes,
more responsive health systems, and more equitable healthcare financing. The below diagram shows
the branches and scope of DOH.

In the Philippines, LGUs are responsible for providing basic services (including health services) to its
subjects as per Republic Act 7160 (Local Government Code of 1991). The delivery and management of
health services will come from DOH to locally elected provincial, city, and municipal governments. This
includes four essential health system functions:

1. Service provision;
2. Resource generation;
3. Financing; and
4. Stewardship.

These services are classified into (1) clinical services for in-patients and (2) ancillary services, which are
furthered classified into three levels, as shown below

As just important as leadership and governance, healthcare financing also plays a pivotal role in the
success of the healthcare industry. It encompasses effective allocation of finite financial resources to
different types of public and personal health services and pooling financial resources across population
groups and sharing financial risks. The goal of this area is to:

1. Raise adequate funds for health to ensure that people get to use needed services; and
2. Make people who use health services are shielded from financial catastrophe or impoverishment
associated with having to pay for them.

Based on 2012 statistics, the main fund sources for this industry are the government, social health
insurance, private sources (OOP, HMOs, life insurances, etc.), and grants. Notably, there is a very high
proportion of out-of-pocket (“OOP”) spending and Filipino households continue to bear the heaviest
burden at 57.6% OOP. Upon provision of funding, the healthcare workforce shall be sufficiently
established with the right mix of staff, system-wide deployment and distribution (equitable),
established job-related norms, enabled work environments, and just compensation/payment
systems. There are known geographic disparity in the availability of public health workers: (1)
Doctors to the Barrios (DTTB); (2) Nurses Deployment Program (NDP); and (3) Rural Health Midwife
Placement Program (RHMPP). Currently, the workforce is hospital-centric. Midwives compose the
majority of employees at 91% (public), then nurses (61% on private sector), medical technologists (53%
in public sector), and doctors (50% in both sectors). Only 30% of the entire healthcare workforce are in
the public sector causing a market- oriented brain drain phenomenon, while newly licensed nurses are
unable to find employment and there is underproduction in other medical professions, i.e. doctors,
dentists, med-technologists, etc.
Meanwhile, on the access to medicine and technology, the country has a supply-driven distribution
scheme through drugstores (80.1% of supply), hospitals (9.7%), and other distributors (10.2%) such as
government agencies (0.3%). There is a lax regulation on strong pharmaceutical/nutraceutical
companies’ lobbying influence and market-orientation is strong. Generics Act of 1988 is in force but
compliance to it still needs to push further. Health information and research is no exception to the areas
for development in the healthcare industry.

Service delivery is the most visible function of any health system of which the ultimate aim is to
maintain equity in health outcomes. In the public sector, as this is financed through taxes, budgeting is
performed at the local and national level. In that case, service should be free for the citizens at the point
of care. Meanwhile, in the private sector, there are both profit and non-profit providers. It is market-
driven and there are OOP schemes, insurance/HMO element, and may be funded externally or through
grants. The diagram to the left shows the standard hospital processes and service delivery that is visible
to the patient/public.

For a technologically-enhanced healthcare system, IBM

provides the above operations map for healthcare

institutions, as applicable.

ACCOUNTING STANDARDS

The nonprofits agency must follow GAAP, the Generally Accepted Accounting Principles. GAAP’s main
objective is to ensure that financial information is reported on effectively and efficiently. This is done
through the GAAP’s set of principles, standards, and procedures that aim to help to standardize
accounting across the industry and regardless of for-profit, NPO, or government status.

IN ADDITION TO GAAP
The nonprofit organizations have additional standards they need to follow which is the FASB (Financial
Accounting Standards Board)

The FASB is intended for “investors and others who use financial reports,” essentially any public, private,
or nonprofit organization or business. The FASB defines only one method of reporting for nonprofit
accounting.
E. AIRLINE INDUSTRY
The airline industry encompasses a wide range of businesses, called airlines, which offer air transport
services for paying customers or business partners. These air transport services are provided for both
human travelers and cargo, and are most commonly offered via jets, although some airlines also use
helicopters.

Airlines may offer scheduled and/or chartered services and the airline industry forms a key part of the
wider travel industry, providing customers with the ability to purchase seats on flights and travel to
different parts of the world. The airline industry offers a variety of career paths, including pilots, flight
attendants and ground crew.

The Airline Industry and the Aviation Industry

The terms ‘airline industry’ and ‘aviation industry’ are sometimes thought of as being synonymous, but
in reality, they have different meanings. As stated, the airline industry refers to companies that offer air
transport services to paying customers, whereas the aviation industry includes all aviation-related
businesses.

With this in mind, the airline industry can be classed as just one sector of the wider aviation industry. In
addition to this sector, aviation companies would also include businesses like aircraft manufacturers,
companies offering non-commercial flights, aerospace companies, regulation authorities and those
involved with research.

Nature and Background of Specialized Industry

What are the Different Types of Airlines?

Airlines are often grouped into different categories and precise definitions can vary in different parts of
the world. However, broadly speaking, airlines can be separated into three main types, which are as
follows:

1. International Airlines

International airlines are a group of the largest, most high-profile and most successful airlines. They
make billions in revenue each year and operate large passenger jets. These airlines also tend to focus
their efforts on offering global services, carrying passengers and cargo over large distances.

Additionally, international airlines usually employ tens of thousands of people, often have multiple hubs
and will provide access to hundreds of destinations. Examples would include Delta Air Lines and
American Airlines.

2. National Airlines

National airlines represent the next step down from the largest international airlines. They will typically
offer both medium-sized and large-sized jets and will often focus on offering services to areas within
their home country, but many will offer access to international destinations too.

A national airline is still likely to employ thousands of people, but will have a smaller fleet size. In many
cases, the destinations they offer flights to are influenced by seasonal fluctuations in demand.
3. Regional Airlines

Finally, as the name suggests, regional airlines are the smallest of the three main types and focus on
offering services within specific regions. In many cases, they provide passenger services to parts of the
world with lower levels of demand and where services are not offered by either national or international
airlines.

Some regional airlines also function as an affiliate for a national or international airline. Within this
context, they will typically provide connection flights from the region they cover to the airline’s main
hubs.

The 4 Most Important Business Models for Airlines

There are a huge number of airlines around the world, each with different ways of doing business.
Nevertheless, most can be categorised as belonging to one of the four main business models, which are
as follows:

1. Full-Service Carriers

Full-service carriers are airlines that operate with a business model that includes offering a range of pre-
flight and on-board services with the price of the ticket. This may include, for instance, checked baggage,
in-flight meals and multiple service classes, such as first-class, business class, economy class, etc.

Their operations will typically include both passenger and cargo services, and frequent flyer programmes
are often on offer. In many parts of the world, full-service carriers are former state-owned flag carriers,
which have since been privatised. They usually offer domestic, international, long haul and short-haul
slights.

Examples would include British Airways, American Airlines, Air France and Lufthansa.

2. Low-Cost Carriers

Low-cost carriers are airlines that aim to gain a competitive advantage over full-service carriers by
reducing costs. This is done in a number of ways, including using smaller fleets and smaller aircraft, and
also by offering more limited services. Their business model tends to center around promoting value for
money.

For travellers, flights from low-cost carriers are often significantly cheaper. However, they tend not to
offer lounge services at airports and things like in-flight meals and baggage allowances will almost
certainly not be included in the price of the ticket. Instead, where they are available, customers pay for
them separately.

Examples would include Ryanair, Southwest Airlines, EasyJet and Eurowings.

3. Charter Airlines

Also known as holiday carriers, charter airlines are focused very firmly on providing passenger services
to tourists. In most cases, however, they do not sell airline tickets directly. Instead, they will enter into
agreements with tour operators and/or travel agencies, who then take responsibility for finding
passengers for them.

In terms of passenger services, charter airlines are often a “middle-ground” between full-service and
low-cost carriers. As with low-cost airlines, the business model does rely on reducing overall costs. Yet,
in many cases, in-flight meals and similar services will be included with the price of an airline ticket.

4. Cargo Airlines

Finally, cargo airlines, also known as air freight carriers, are airlines that are either solely or primarily
focused on the air transportation of cargo or freight. Some cargo airlines, such as Lufthansa Cargo and
Emirates SkyCargo, are subsidiaries or sub-divisions of airlines that also offer passenger services.

Cargo airlines can be further broken down into traditional cargo carriers and integrated cargo carriers.
With the latter, all aspects of cargo transportation are controlled by the company, including the ground
or non-flight elements. Examples of airlines that would fit into the integrated cargo carrier category
include UPS Airlines and FedEx Express.

F. LOGISTICS AND TRANSPORTATION INDUSTRY

Transportation is defined as the movement of people, animals, and goods from one location to another.
These modes of transport may include air, rail, road, sea, cable, pipeline and space. This field is divided
into infrastructure, vehicles, and operations. Transport is crucial as it enables trade and communication
between one another, which ultimately establishes civilizations.

The logistics industry can be defined as the science of obtaining, producing, and distributing material
and products to the correct place and in the correct quantities. In a military sense, where it has a greater
use, its meaning also includes the movement of personnel. Logistics includes the process of planning,
implementing, and controlling procedures for the efficient and effective transportation and storage of
goods. This includes services and related information from the point of source to the point of
consumption for the purpose of fulfilling and conforming to customer requirements.

The advancements of new technologies and improved business processes have had an enormous
impact on transforming both the logistics industry and transport industry. Technologies have allowed
real-time monitoring of flow and resources, transparency across multiple points and the seamless
exchange of operational information with key performance indicators that have had a profound impact
on the industry.

In this highly competitive market both information and physical products must move with efficient
speed and at lower cost, paired with improved service. Successful supply chain management and
logistics are often the difference between surviving and flourishing in the current marketplace. Upon
improving the supply chain will see immediate benefits in terms of lower costs and optimized delivery.

Nature and Background of Specialized Industry

The logistics industry is much broader than the transportation industry. While transportation focuses on
the movement of goods from one place to the other, the logistics industry implies a broader spectrum
and refers to the whole ‘flow’ management. This includes not only the transportation and delivery of
goods but also the storage, handling, inventory, packaging, and various other aspects. So, what are the
main differences between the logistics industry and the transportation industry?

Transportation is a function within the logistics industry operations. It is focused purely on the
definition and deployment of transportation modes, such as sea, road and air. It is also important to
differentiate between logistics and the supply chain. The supply chain refers to the entire value chain
from the suppliers to the end customer, including after sales services and reverse logistics (recycling).
Types of transportation are as follows:

1. Truck Freight — Road Transportation

2. Ship — Marine Transportation

3. Train — Rail Transportation

4. Plane — Air Transportation

5. Intermodal Transportation

Logistics requires planning, whilst transportation is the mode to execute the planning when freighting
goods from point A to B. They are not the same thing, but transportation is just simply a part of logistics.
When it comes to the logistics industry, logistics executives must make further decisions beyond the
mode of transportation to include:

• Packaging
• Containerization
• Documentation
• Insurance
• Storage
• Importing and Exporting Regulations
• Freight Damage Claims
• Working and collaborating with other executives within the supply chain
• Managing vendors and partners
• Responsible for risk mitigation

Three main directions correspond with the three logistical processes which we are going to focus on
today. These are inbound logistics, outbound logistics, and reverse logistics. The information about
these three supply chain directions is essential to know, especially to people inclined in the logistics
industry. Inbound Logistics refers to the movement of goods between businesses and their suppliers to
cut the definition short. In contrast, Outbound Logistics pertains to the flow of goods between
companies and the end-user/consumer. And Reverse Logistics means that products’ movement from the
end-user/consumer back to the manufacturer or reverse supply chain.
The expansion of the global marketplace puts the concept of global logistics into the limelight. Logistics
experts must now manage all of the aforementioned logistics activities within a world-wide arena
spanning a multitude of countries, languages, cultures, governments, and regulations. Along with this
expansion of the marketplace comes the need for global channel intermediaries.

Today's global logistics manager would be familiar with the role of each of the following:

• Foreign freight forwarders—handlers of a myriad of foreign freight services: rate quotes, vessel
chartering, booking of vessel space, handling of documentation and cargo insurance, tracing and
expediting, arranging inland transportation, and providing translation services.

• Export management companies—suppliers of expertise to those wishing to sell products overseas but
lacking the necessary resources.

• Export trading companies—locaters of overseas buyers. They also handle export documentation,
transportation, and the meeting of foreign government requirements.

• Customs house brokers—overseers of the movement of goods through customs. They also ensure
that accompanying documents are complete and accurate.

• Ship brokers—sales representatives for ship owners and purchasing representatives for the shipper.

• Ship agents—local representative of the ship operator that handles the ship's arrival, berthing,
clearance, loading and unloading.

• Export packers—suppliers of export packaging services.

• Port authorities—owner and operator of the port. They provide wharf, dock, and other terminal
facilities at port locations.
G. ELECTRONIC COMMERCE (E-COMMERCE) INDUSTRY
Although traditional commerce is still present in the Philippine market, e-commerce has significantly
penetrated the country by storm. In a country like the Philippines, going digital if you are a business
owner is beneficial, as most consumers are internet-savvy. In the last decade, the number of internet
users in the Philippines has surpassed other Asian countries. Across the globe, Filipinos are one of the
largest populations using the internet, spending at least an average of 10 hours a day on the web. It tells
a lot about the appetite of online consumers, and a large part of them gravitate to play video games and
search for fashion trends and make-up.

Sales through e-commerce have quickly accelerated in 2020 because of the long lockdown periods in
the Philippines. According to apparel and footwear e-commerce platform, Zalora, over nine tenths of
Filipino internet users searched for goods and services to purchase during the lockdown period that
began in March 2020. Even before the pandemic, e-commerce was rapidly expanding in the Philippines,
mostly drive by online marketplaces. However, in comparison to other countries, the Philippines is still
lagging in terms of e-commerce expansions. The reach of Philippines’ e-commerce is not yet as
established as other countries, providing much room for growth in 2020. In fact, several key players
have only started building their own e-commerce in 2020.

Nature and Background of Specialized Industry

Ecommerce (or electronic commerce) is the buying and selling of goods (or services) on the internet. It
encompasses a wide variety of data, systems, and tools for online buyers and sellers, including mobile
shopping and online payment encryption. Most businesses with an ecommerce presence use an
ecommerce store and/or an ecommerce platform to conduct online marketing and sales activities and to
oversee logistics and fulfillment.

Types of e-commerce

As commerce continues to evolve, so do the ways that it’s conducted. Following are the most
traditional types of e-commerce models:

1. Business to Consumer (B2C): B2C e-commerce is the most popular e-commerce model. Business to
consumer means that the sale is taking place between a business and a consumer, like when you buy a
rug from an online retailer.

2. Business to Business (B2B): B2B e-commerce refers to a business selling a good or service to another
business, like a manufacturer and wholesaler, or a wholesaler and a retailer. Business to business e-
commerce isn’t consumer-facing, and usually involves products like raw materials, software, or products
that are combined. Manufacturers also sell directly to retailers via B2B ecommerce.

3. Direct to Consumer (D2C): Direct to consumer e-commerce is the newest model of ecommerce. D2C
means that a brand is selling directly to their end customer without going through a retailer, distributor,
or wholesaler. Subscriptions are a popular D2C item, and social selling via platforms like InstaGram,
Pinterest, Facebook, SnapChat, etc. are popular platforms for direct-to-consumer sales.
4. Consumer to Consumer (C2C): C2C e-commerce refers to the sale of a good or service to another
consumer. Consumer to consumer sales take place on platforms like eBay, Etsy, Fivver, etc.

5. Consumer to Business (C2B): Consumer to business is when an individual sells their services or
products to a business organization. C2B encompasses influencers offering exposure, photographers,
consultants, freelance writers, etc.

Everyone from independent freelancers to small businesses to the largest of corporations

can benefit from the ability to sell their goods and services online at scale.

Here are some examples of types of e-commerce:

1. Retail: The sale of products directly to a consumer without an intermediary.

2. Drop shipping: The sale of products that are manufactured and shipped to consumers via a third
party.

3. Digital products: Downloadable items like templates, courses, e-books, software, or media that must
be purchased for use. Whether it is the purchase of software, tools, cloud-based products, or digital
assets, these represent a large percentage of ecommerce transactions.

4. Wholesale: Products sold in bulk. Wholesale products are usually sold to a retailer, who then sells the
products to consumers.

5. Services: These are skills like coaching, writing, influencer marketing, etc., that are purchased and
paid for online.

6. Subscription: A popular D2C model, subscription services are the recurring purchases of products or
services on a regular basis.

7. Crowdfunding: Crowdfunding allows sellers to raise startup capital to bring their product to the
market. Once enough consumers have purchased the item, it is then created and shipped.

Benefits of e-commerce

Clearly online commerce offers a plethora of benefits. Let’s look at some of the biggest ones.

1. Convenience

Online commerce makes purchases simpler, faster, and less time-consuming, allowing for 24-hour sales,
quick delivery, and easy returns.

2. Personalization and customer experience

E-commerce marketplaces can create rich user profiles that allow them to personalize the products
offered and make suggestions for other products that they might find interesting. This improves the
customer experience by making shoppers feel understood on a personal level, increasing the odds of
brand loyalty.

3. Global marketplace
Customers from around the world can easily shop e-commerce sites – companies are no longer
restricted by geography or physical barriers.

4. Minimized expenses

Since brick and mortar is no longer required, digital sellers can launch online stores with minimal startup
and operating costs.

E-commerce carries the following disadvantages:

• Limited customer service. If you are shopping online for a computer, you cannot simply ask an
employee to demonstrate a particular model's features in person. And although some websites let you
chat online with a staff member, this is not a typical practice.

• Lack of instant gratification. When you buy an item online, you must wait for it to be shipped to your
home or office. However, retailers like Amazon make the waiting game a little bit less painful by offering
same-day delivery as a premium option for select products.

• Inability to touch products. Online images do not necessarily convey the whole story about an item,
and so e-commerce purchases can be unsatisfying when the products received do not match consumer
expectations. Case in point: an item of clothing may be made from shoddier fabric than its online image
indicates.

14 Ecommerce Trends Leading the Way

1. Augmented Reality enhances the reality of online shopping.

2. There will be a growing volume of voice search.

3. AI helps shops learn about shoppers.

4. On-site personalization uses those insights to create individualized experiences.

5. Big data plays a big part in creating personalized experiences.

6. Chatbots improve the shopping experience.

7. Mobile shopping is still on the move.

8. More ways to pay.

9. Headless and API-driven ecommerce allow continued innovation.

10. Customers respond to video.

11. Subscriptions keep customers coming back.

12. Sustainability is becoming more important.

13. Businesses should optimize digital strategy for conversion.

14. B2B is growing...and changing.

H. POWER, WATER AND TELECOMMUNICATIONS INDUSTRY

To define briefly, the power industry covers the generation, transmission, distribution and sale of power
to the general public and industry. Meanwhile, the water industry provides drinking water and
wastewater services (including sewage treatment) to residential, commercial, and industrial sectors of
the economy. Typically, public utilities operate water supply networks. Lastly, the telecommunication
sector is made up of companies that make communication possible on a global scale, whether it is
through the phone or the Internet, through airwaves or cables, through wires or wirelessly.

Utilities and telecommunications are essential services that play a vital role in economic and social
development. Quality utilities are a prerequisite for effective poverty eradication. Governments are
ultimately responsible for ensuring reliable universal access of service under accountable regulatory
frameworks. Increased competition in the utilities sectors in recent years has entailed changes in
regulatory frameworks and ownership structures of enterprises, in addition to business diversification.

Further, remarkable progress in telecommunications technology has had, and will continue to have, an
enormous impact on telecommunications manufacturing and service industries. In particular, digital
technology that integrates transmission, switching, processing, and retrieval of information provides
opportunities to merge various service modes into an integrated whole. This digitalization, merging the
communications and computation functions, has been made possible by dramatic advances in device
and material technology, including integrated circuits and optical fibers. As the role of digital processing
increases, systems and services become more intelligent and labor-saving on the one hand, and more
software-intensive on the other.

These industries are highly interdependent, highly regulated, and any risk imposed on its continuance
will not only mean a threat to its own and related industries, but a peril to the whole economy as well.

Nature, Background, and Overview of Specialized Industry

The electric power industry started in the Philippines as a private sector-led industry in 1890 and
remained so until the late 1960s; the government pursued rural electrification through the cooperative
business model starting in 1969; the monopoly of generation by the National Power Corporation (NPC)
started in 1973; and then the re-entry of private sector in the generation sector through independent
owner producers (IPPs) started in 1987. Prior to the 2001 restructuring under the Electric Power
Industry Reform Act (“EPIRA”), the electric power industry had a vertically integrated generation and
transmission sector through the NPC and wholesale power purchases from the IPPs were predominantly
through the NPC (see diagram below). Distribution utilities were local monopolies in their respective
service areas.

On August 14, 1969, Republic Act 6038 created the National Electrification Administration (NEA) and laid
the groundwork for accelerated electrification in the countryside. The law provided a framework for
rural electrification through not-for-profit cooperatives as a business model and loans and technical
assistance from the NEA. In 1972, then President Ferdinand Marcos imposed Martial Law and shortly
thereafter, the Marcos administration seized the assets of Meralco.

After almost one and a half decades of government dominance in the electric power industry, in 1986,
the administration of then president Corazon Aquino reverted Meralco to private ownership. The
administration then decided not to operate the Bataan Nuclear Power Plant “for reasons of safety and
economy” (EO 55 s. 1986). In 1987, Aquino issued Executive Order (EO) 215 reversing the policy of
granting generation monopoly to NPC and entertained proposals from independent power producers
(IPPs) for build-operate-transfer (BOT) and build-own-operate (BOO) arrangements for new
generating capacity. EO 215 s. 1987 amended PD 40 to specifically allow the private sector to generate
electricity and categorically state that "the generation of electricity, unlike the transmission and
distribution of electricity, is not a natural monopoly and can be undertaken by more than one entity."
The first BOT contract for a power plant was then signed in 1989 by the NPC and Hopewell Energy
Management, Ltd.

To facilitate the privatization process, the EPIRA provided for the creation of the Power Sector Assets
and Liabilities Management Corporation (PSALM) to take over all existing generation assets and
liabilities of the NPC. PSALM was also tasked to use the revenue generated to pay the outstanding debt
of the NPC. Furthermore, Executive Order No. 215 series of 1987, which allows private sector to
generate electricity, classifies four types of generating plants: (1) co-generation units or the
simultaneous generation of both electricity and heat from the same fuel, (2) electric generating plants
intending to sell their production to the grids, (3) electric generating plants intended primarily for the
internal use of the owner, and (4) electric generating plants outside the NPC grids.
The latest EPIRA status report released by the Department of Energy (DOE), which covers November
2014 to April 2015 period, highlights the privatization of the remaining generation assets, particularly
the Power Barges (PBs) 101-104 as well as the transfer of contract to an Independent Power Producer
Administrator (IPPA) of Unified Leyte Geothermal Power Plant (ULGPP) for the Bulk Energy. As of June
2015 4, the privatization level of NPC generating facilities has reached 89.7%, following the successful
bid of Naga Power Plant Complex in March 2014. Meanwhile, the proposed closing and turn-over
schedule of Angat Hydro-electric Power Plant to Korean Water Resources, Inc. was officially done in
October of the same year. Another entity established by the EPIRA is the Energy Regulatory Commission
(ERC). Its main task is to promote competition, encourage market development, and enforce
regulations in the newly restructured market. This is because, contrary to PD 40, power generation
under the EPIRA was not considered a public utility operation, as stated in Section 6 of RA 9136
otherwise known as EPIRA Act of 2001. This made the generation sector of the industry competitive and
opens to other players in the market. Under the EPIRA, any person or entity engaged in generation and
supply shall not be required to apply for a national franchise; provided that it secures a certificate of
compliance from the ERC. Thus, the industry changed in tranches and was restructured as illustrated by
the diagram below.

To briefly discuss the phases the power industry’s supply chain:

1. Power Generation - Power generation in the Philippines is not considered as a public utility
operation, which means interested parties do not need to secure a congressional franchise to operate a
power generation company. However, power generation is regulated by the Energy Regulatory
Commission (ERC) who must issue a certificate of compliance to interested parties to ensure that the
standards set forth in the Electric Power Industry Reform Act of 2001 (EPIRA) are followed. The ERC is
also responsible for determining any power abuse or anti-competitive behavior. Electricity in the
Philippines is produced from various sources such as coal, oil, natural gas, biomass, hydroelectric, solar,
wind, and geothermal sources. The allocation of electricity production can be seen in the table below.
Types of source of energy are enumerated below:
a. Conventional sources – coal, gas, oil, hydropower, and nuclear power; and

b. Non-conventional sources – solar, wind, biogas (from organic wastes), and bagasse (byproduct of
sugarcane).

2. Power Transmission – this is a common carrier business (i.e. regulated by the government, serves its
franchise area without discrimination, responsible for any losses incurred during delivery). It is regulated
by the ERC who has rate-making powers and the final say in the valuation of transmission assets.
Pursuant to the Electric Power Industry Reform Act (EPIRA) and the Transmission Development Plan or
TDP, maintenance and operations of the nationwide transmission system was subjected to competitive
public bidding conducted by the Power Sector Assets and Liabilities Management (PSALM). The National
Grid Corporation of the Philippines (NGCP) was the highest bidder. It assumed control of the national
transmission system from the National Transmission Corporation (TransCo), whom assumed the same
function from the now defunct National Power Corporation (by way of RA 9511 enacting congressional
franchise for a total of 50 years).

a. The National Grid Corporation of the Philippines (NGCP) is the transmission system operator for three
grids constituting the Philippine grid and as a franchise holder, it is in charge of operating, maintaining,
and developing the country's state-owned power grid. The Philippine transmission system is composed
of three grids, the Luzon Grid, Visayas Grid, and Mindanao Grid. One characteristic of the grids is that
most bulk generation sites are found far from the load centers, necessitating use of long-distance
transmission lines.

b. Functions:

i. Operations and Maintenance - NGCP's task is to ensure that the country's transmission assets are in
optimal condition to convey safe, quality, and reliable electricity.

ii. System Operations - NGCP acts as System Operator that balances the supply and demand of power
to maintain the quality of electricity that flows through the grid.

iii. Planning and Engineering - NGCP ensures that the grid is prepared whenever new plants come
online and when the demand for power in a certain area increases by anticipating these scenarios and
constructing new facilities.

3. Power distribution - The circulation of electricity to end-users is a controlled common carrier

business requiring a national franchise. The power to grant national franchises is exclusively vested to
the Congress of the Philippines. Distribution of electric power to all end-users or consumers of
electricity may be handled by private distribution utilities, cooperatives, local government units
presently undertaking this function and other duly authorized entities, under the regulation of the ERC.

A distribution utility has the task to provide distribution services and connections to its system for any
end-user within its franchise area, as there are different distribution utilities available for different areas,
consistent with the distribution code. They are required to provide open and non-discriminatory access
to its distribution system to all users.

Retail rates charged by distribution utilities are subject to regulation of the ERC under the principle of
full recovery, that is, distribution utilities subdivide their retail rate into two distinct categories, namely
pass through charges and wheeling charges. Pass through charge follows the principle of full economic
recovery where a distribution utility may pass on all the charges it incurred in the distribution of power
such as the price of the power, transmission charge, systems loss charge, etc. to its customers. The
wheeling charge is an additional premium charged to the customer akin to a mark-up on the cost of
power acquired by the distribution utility. The wheeling charge follows the principle of reasonable
return on base (RORB) which allows the distribution utility to operate viably as determined by the ERC.

a. Electric Cooperatives (“ECs”) are entities owned by the member-consumers within the vicinity
covered by the said entity. These are controlled by a Board of Directors elected by member-consumers
and their management and operations supervised by the National Electrification Administration.

b. Private Distribution Utilities (“PDUs”) are electric distribution companies that are owned by private
entities. As of 2018, if ranked based on output, the main distribution utilities across the country
include the following Private Distribution Utilities (“PDUs”):
The Manila Electric Company (“MERALCO”), the largest electric distribution utility in the
Philippines, has the 24th highest weighted average retail tariffs among 46 countries. As compared
to its neighboring countries, Philippines has higher electricity costs due to:

1. Lack of Subsidies; and

2. High Intrinsic Cost of Supply and Transmission due to:

a. Dependence on expensive imported fossil fuel for generating electricity and no tax or tariff relief
given for fuel imports used for power generation;
b. Relatively low generating capacity of the Philippines. The current supply of electricity is forecasted
to be overtaken by the demand of the country;
c. Relatively small and fragmented grid size result into transmission losses, no economies of scale,
and inefficient operations; and
d. As an archipelago, there are geographic challenges of transmission. The Philippines relies on
submarine cables to interconnect the islands.

c. Municipality Unit (“MUs") are entities that are owned by the local government. The local
government officials, who are elected by the end-users within the municipality, regulates, controls,
and manages the utilities.

Water Utility Industry

The Philippines’ water supply system dates back to 1946, after the country declared
independence. The main components of water resources management in the Philippines are vested in
the mandates of the various government agencies that undertake most of the water resources programs
and projects in the country. There are more than thirty such agencies and offices, each dealing with a
particular aspect of water resources development. Thus, there are separate agencies dealing mainly
with each of the sectors of water supply, irrigation, hydropower, flood control, pollution,
watershed management, etc.

Under this setting, the National Water Resources Board (NWRB) was created in 1974 as the
authoritative national organization to coordinate and integrate all activities in water resources
development and management. Its main objective is to achieve scientific and orderly development and
management of all the water resources of the Philippines consistent with the principles of
optimum usage, conservation and protection to meet present and future needs.

Fragmentation among water-related agencies is evident in three areas of concern: water supply and
distribution, economic and resource regulation, and planning and policy formulation. The following
agencies are involved in water supply and distribution:
• the Metropolitan Waterworks and Sewerage Services (MWSS) and its two concessionaires (after
it was privatized in 1997) for Metro Manila, servicing 62.68 percent of its total population;

• the Local Water Utilities Administration (LWUA) and its water district offices for other cities and
municipalities, servicing 58 percent of the total urban population within its area of responsibility; and

• the departments of Interior and Local Government (DILG) and Public Works and Highway (DPWH)
and local governments which manage community water systems.

The water infrastructure provided is classified into three levels:

1. Level I – Stand-alone water points (e.g. handpumps, shallow wells, rainwater collectors) serving
an average of 15 households within a 250-meter distance;

2. Level II - Piped water with a communal water point (e.g. borewell, spring system) serving an average
of 4–6 households within a 25-meter distance;

3. Level III - Piped water supply with a private water point (e.g. house connection) based on daily water
demand of more than 100 liters per person

Service providers for this sector are also listed down below, by which different tariff structures and
levels according to the respective management model are imposed.
1. Local Government Units

2. Water Districts

3. Large-scale private operators

4. Small-scale independent providers

Common water sources and water treatment plants for this industry includes but not limited to the
following:

1. Water Sources

a. Angat Dam
b. Ipo Dam

c. La Mesa Dam

2. Water Treatment Plants - Raw water undergoes several treatment processes before it passes the
standards for potable water. Conventional water treatment consists of the following processes:
coagulation/flocculation, sedimentation, filtration and disinfection/chlorination.

a. Balara treatment plant

b. East La Mesa treatment plant

c. Cardona treatment plant

To ensure that the water delivered to the customers satisfies regulatory standards on quality, the
Company’s Laboratory Services Department processes an average of around 900 water samples
from the distribution network per month. The samples are collected on a regular basis from strategically
located sampling points all over the East Zone. This number of sampling points surpasses the
regulatory requirement and all results of the sampling have been consistently 100% compliant with the
Philippine National Standards for Drinking Water (PNSDW), five percent above the requirement.

After distribution and of water, the waste water (used water basically) will undergo sewerage. Sewerage
services include the operation and maintenance of networks of sewer pipelines that collect and
convey sewage to a Sewage Treatment Plant (STP) which then clean the wastewater before safely
returning it to our water bodies. Through a variety of mechanisms and processes, these treatment
plants produce treated wastewater safe enough for re-use or discharge to receiving bodies of water.

Telecommunications Industry

The industry was deregulated in 1995 when President Fidel Ramos signed Republic Act 7925 (The Public
Telecommunications Policy Act of the Philippines). This law opened the sector to more private players
and improved the provision of telecom services are better and fairer rates. The industry was
deregulated in 1995, leading to the creation of many telecommunication service providers for
mobile, fixed-line, Internet and other services.
Some of the regulatory frameworks relative to this industry are listed below:
• Republic Act No. 3846, An act providing for the regulation of radio stations and radio
communications in the Philippine Islands, and for other purposes.

• Republic Act No. 6849, An act providing for the installation, operation and maintenance of public
telephones in each and every municipality in the Philippines, appropriating funds therefor and for
other purposes.

• Republic Act No. 7925, An act to promote and govern the development of Philippine
telecommunications and the delivery of public telecommunications services.

• Republic Act No. 10844, An act creating the Department of Information and Communications
Technology (DICT), defining its powers and functions appropriating funds thereof, and for other
purposes.

The surge of digital users in the Philippines has been on the rise in recent years. Time spent on the
internet by Filipinos, which was the highest among other Asian countries, led to more demands
for improving fixed broadband services from the country's internet service providers despite its
growth in numbers. The lack of dependable broadband connections in the Philippines able to provide
higher internet speed, halts better user experience, resulting to one of the lowest fixed subscription
growths among the Asia-Pacific region in 2018.

Despite several telecommunication service providers, the Philippines telecommunications industry has
long been dominated by legacy players Philippine Long-Distance Telephone Company (PLDT) and Globe
Telecom.

All players are expected to upgrade their network capabilities, install fiber-optic and sub-sea systems
and cables, purchase modern networking equipment/storage/servers, and utilize cloud and
cybersecurity services. As disruptive as this industry can get, its key players are striving to catch up with
each of the industries market segments’ new technologies.

1. Mobile Market with 126 million subscribers as of 2016;

2. Broadband Market

a. Wi-Max

b. Wi-Fi

3. Fixed Line Market

a. Fixed Line Voice

b. Fixed Line Data Market

4. International Long Distance Market

5. Hybrids