By Francessca S. Abalos
PUBLIC SECTOR intervention, including potential tax exemptions and regulatory frameworks for secondhand smartphones, is needed to mitigate the impact of rising device costs on the Philippines’ digital productivity.
In a media roundtable on Thursday, industry leaders and financial experts warned that escalating device costs and surging memory chip prices threaten to widen the digital divide and lock cost-conscious Filipinos out of essential modern productivity tools like artificial intelligence.
3cat founder and Chief Executive Officer Karl Loo urged policymakers to evaluate fiscal interventions adopted in neighboring economies such as Malaysia, where smartphones are classified as essential goods.
“Malaysia is tax exempt on electronics. So, there is no goods and services tax on electronics because it is seen as an essential item. So maybe [that’s] something to consider in other parts of Southeast Asia including the Philippines.”
Mr. Loo cited that Malaysia also allows personal income tax deductions of up to $800 annually for smartphone and computer purchases to ease household financial spending.
“The public definitely has a part to play. Whether it be from the income tax department all the way to the telco regulators, which can provide some guidance on how to encourage access to quality, reliable, and affordable handsets and smart devices,” he added.
Mr. Loo emphasized that widening digital access requires active public sector involvement across multiple regulatory areas.
The call for government intervention comes as global memory chip prices jumped due to supply and demand imbalances, heavily squeezing low-cost hardware manufacturing.
Foxmont Capital Partners Managing Partner Jelmer David Ikink pointed out that for smartphones priced under $400, memory chips now account for more than 60% of the total device costs.
“In 2014, the recommended sales price of an iPhone was about 7% of the gross domestic product (GDP) per capita of the Philippines. In 2026, that grew to 26%,” Mr. Ikink said, noting that flagship device price increases have consistently outpaced national per capita economic growth.
“I think the rising device costs, if we do nothing, could be a barrier to growing the digital economy in the Philippines and having a more productive economy,” he added.
To establish quality pre-owned electronics as an alternative to costly new hardware, experts highlighted the necessity of formal regulatory frameworks, referencing recent movements at the National Telecommunications Commission (NTC) regarding secondhand devices.
“There has been some movement in the NTC. Some of those changes can help address consumer protection in the secondhand sector in the Philippines,” Mr. Ikink said.
Groundwork Co-Founder and Principal Research Consultant Jonathan Robert A. Ilagan said that low-income households face steep financial consequences if an expensive purchase fails.
“Public institutions, I believe they do have the responsibility to make that possible… protecting the consumer to make sure as well that they don’t carry all the cost, effort, and uncertainty on their own.”
Mr. Ilagan added that verified diagnostics and warranties shift secondhand devices as a reliable choice.
Telecommunications provider Globe Telecom, Inc. also underscored that expanding mobile networks must be matched with accessible hardware for consumers to benefit.
Globe Head of Device and Cards Management Randy Lim noted that while 5G infrastructure is widely deployed nationwide, many Filipinos remain constrained by older and incompatible devices.
“We may have a good network outside. Without the right devices, we won’t be able to enjoy it.”
Mr. Lim explained that Globe works with brand partners and non-banking institutions to offer discounted handsets and consumer financing.
“We sell a lot of these devices at a very discounted cost. Because we don’t intend actually to make money on these devices, but to really bridge the gap for Filipinos to get access to the internet.”