Public sector intervention, including potential tax exemptions and a regulatory framework for secondhand smartphones, is needed to mitigate the impact of rising device costs on the Philippines' digital productivity, according to industry leaders and financial experts.

At a media roundtable on Thursday, the participants warned that escalating device prices and surging memory chip costs threaten to widen the digital divide and lock cost-conscious Filipinos out of essential modern productivity tools such as artificial intelligence.

Karl Loo, founder and chief executive officer of 3cat, 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," he said.

Mr. Loo noted that Malaysia also allows personal income tax deductions of up to $800 annually for smartphone and computer purchases, a measure designed 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.

He emphasized that widening digital access requires active public sector involvement across multiple regulatory areas, spanning taxation and telecommunications oversight.

The call for government intervention comes as global memory chip prices have jumped on supply and demand imbalances, heavily squeezing low-cost hardware manufacturing.

Jelmer David Ikink, managing partner at Foxmont Capital Partners, pointed out that for smartphones priced under $400, memory chips now account for more than 60% of 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 a viable alternative to costly new hardware, the 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.

Jonathan Robert A. Ilagan, co-founder and principal research consultant at Groundwork, said 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," he said.

Mr. Ilagan added that verified diagnostics and warranties help shift secondhand devices toward becoming a reliable choice for buyers.

Telecommunications provider Globe Telecom, Inc. also underscored that expanding mobile networks must be matched with accessible hardware for consumers to benefit from improved connectivity.

Randy Lim, Globe's head of device and cards management, noted that while 5G infrastructure has been 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," he said.

Mr. Lim explained that Globe works with brand partners and non-banking institutions to offer discounted handsets and consumer financing options.

"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 really bridge the gap for Filipinos to get access to the internet," he said.