Despite efforts of the government and the Business Software Alliance (BSA) to combat piracy, use of unlicensed software among local organizations remains rampant.
According to BSA's eighth annual study, the rate of piracy in the country went up by 5 per cent, from 63 per cent in 2001 to 68 per cent last year, indicating that more than half of all business software installed in 2002 were unlicensed rather than being bought from official sources. Meanwhile, losses due to the purchase of unlicensed software in Philippines in 2002 grew by 53.23 per cent to reach US$37.78 million from US$6 million in 2001.
The BSA study on software piracy estimates the use of unlicensed software in 85 countries by comparing the amount of legal software supplied to a country with the anticipated local demand for software. The difference between the two figures represents the number of unlicensed applications, and multiplying that figure by the average price of business applications gives the estimated dollar loss.
Although the piracy rate has increased over the previous year, long-term figures show that the rate has decreased considerably, according to Ronald Chua, chairman of the Philippine committee of BSA. "The Philippines is one country that has realized the benefit of reducing software piracy," said Chua. He explained that in 1994, the country's piracy level was 94 per cent. Since then, he said the country has made good progress and has succeeded in reducing piracy rates to 68 per cent in 2002.
According to a recent study conducted by the International Data Corp. (IDC), the Philippines' IT sector contributed 55 billion pesos (US$1.03 billion) to the economy, created 27,169 jobs, and contributed 3.9 billion pesos in tax revenues for the government in 2002. The IDC study also indicated that cutting piracy rate in the Philippines by 10 points over a four-year period between 2002 and 2006 could add 19.3 pesos billion to its economy, create 2,000 high-wage jobs, and generate 1 billion pesos in new tax revenues.
"However, the increase in piracy rate last year clearly shows that software piracy remains a serious problem in the Philippines as retail revenue losses to the industry rose to two billion pesos. We urge the corporate sector to be active in joining the fight against piracy," said Chua.
The rate of piracy in Asia grew from 54 per cent in 2001 to 55 per cent in 2002, BSA said. Boosted by the growing overall demand for software in the region, losses in the Asia-Pacific now account for an all-time high of $5.5 billion or 43 per cent of total financial losses due to unlicensed software worldwide, according to BSA figures.
The Philippines was among six countries in the Asia-Pacific that experienced growing rates of illegal use of software from 2001. The other five were Australia (up from 27 per cent in 2001 to 32 per cent in 2002), Hong Kong (53 per cent to 56 per cent), Indonesia (88 per cent to 89 per cent), South Korea (48 per cent to 50 per cent) and Vietnam (94 per cent to 95 per cent).