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Good morning Dear Reader,

Welcome back to Strait Up, our weekly newsletter that helps you make sense of what’s going on in Southeast Asia.

You can find this and previous issues of Strait Up on the web at: https://the-ken.com/sea/straitup

This week we’re looking at the Philippines’ new national ID programme in particular, and data gathering in general. It’s an important topic that’s become increasingly critical during the Covid-19 outbreak because data can help inform decisions, but it comes with great responsibility.

Without further ado let’s get to it.

The Philippines signs up for universal ID… and the worries that come with it

Jum, Ben, Shreedhar and Jon

Image by Cleo Robertson from Pixabay

After several failed attempts in a span of decades, the Philippines is finally rolling out a national identification system. Registration of the country’s 106 million citizens, as well as resident aliens, began on October 12. But as with any massive undertaking dealing with people’s data, there are many concerns.

Known as ‘PhilSys’, the system will include a single ID card for each citizen with a unique number—assigned upon birth or registration to the PhilSys—which will be associated with other government IDs. The national ID contains a QR code with a person’s information—name, gender, date and place of birth, blood type, and address—as well as biometric data—fingerprints, facial image, and iris scan. This information will be consolidated into a central database managed by the Philippine Statistics Authority.

PhilSys means several things. First, it will allow for more seamless transactions. The national ID won’t override other IDs like passports and driver’s licenses, which serve a specific purpose. But it will be enough to establish one’s identity when transacting with public and private institutions, most of which require at least two government-issued IDs.

It is also designed to help curb identity fraud in Manila, where the creation of bogus IDs and documents is a thriving industry.

But the biggest goal is wider financial inclusion for poor and unbanked households to allow, say, credit and cash aid to reach them faster.

Anyone opening a bank account or applying for financial services must undergo a stringent know-your-customer (KYC) process that requires verification through official IDs. However, many poor households only have paper documents such as police clearance or a barangay (village) certification, none of which is accepted by most financial agencies.

Had it been implemented earlier, the national ID system could have solved the slow and corruption-ridden distribution of Covid-19 cash aid meant for poor Filipino communities.

The government initially allocated a Php 100 billion (US$2.05 billion) budget for distribution among 18 million Filipino households in April to May, but by the end of July, only Php 20 billion (US$411 million) of the amount had been disbursed, due to problems identifying who was eligible to receive aid.

The closest thing the Philippines had to a system to identify who should get Covid support was a list of poor households that had previously received public benefits such as cash subsidies. That’s maintained by the Department of Social Welfare and Development (DSWD).

But the DSWD’s index was already a few years old when the pandemic hit. Local government units also maintained their own lists of constituents they considered poor. Combining those lists and eliminating redundancies took time.

Without a coherent ID system, the Covid-19 aid program was also prone to fraud. More than 400 local officials—ranging from mayors to councillors and village captains—were found to have dipped their hands into the aid by falsifying documents.

Image via PNA

It sure has taken time. The Philippine Identification System (PhilSys) Act was enacted in August 2018. Its implementing rules and regulations were published months later in October. But it got off to a rocky start, with the bidding of the project plagued by allegations of irregularities.

There was also another sticky issue: the potential violation of data privacy.

The inclusion of the so-called “record history” in the law has been a cause for concern, according to privacy lawyer Jam Jacob, who is a legal and policy adviser at technology and rights advocacy group Foundation for Media Alternatives. (The record history refers to details of authentication requests made whenever the national ID is used in any transaction by an individual.)

“That essentially makes it a comprehensive surveillance system,” Jacob previously said.

That’s particularly alarming when applied to the context of the alleged extrajudicial killings among peasants and political activities, and the bloody war on drugs launched by the administration of Philippines President Rodrigo Duterte, advocacy groups have further claimed.

The Philippines, like many countries, is not immune to data leaks either. For instance, the country’s Commission on Elections’ database was hacked in March 2016, compromising the personal data of around 55 million registered voters—the largest scale ever in the government’s history.

How successful the Philippines will be able to implement the national ID remains to be seen. Efforts to roll out such a system started as early as 1973 but didn’t see the light of day or get the needed legislative support for fears of misuse and abuse. The closest the country had to a national ID was the Unified Multi-Purpose Identification mandated by former President Gloria Arroyo in 2005, but this was limited to the people registered with the state social security and healthcare agencies.

The experiences of other countries could prove instructive.

In Singapore, the move to a digital national ID system started back in 2003, with the introduction of SingPass (Singapore Personal Access). That built on Singapore's national identity card system—called the National Registration Identity Card (NRIC)—and the government’s central databases. SingPass became the digital extension of that system.

SingPass thus allowed Singapore-based residents to authenticate their identity digitally, paving the way for government services to move online. Security features like two-factor authentication and the ability to change a user ID were added later on. The opening up of APIs for companies to pull information from the central database with permission means that today, residents can do anything from register to buy public housing to file taxes online.

This is all part of the Singapore government’s aim to make online services seamless for residents through a “moments of life” approach that sees national digital services available from birth to death. With so much information readily accessible via SingPass, the Personal Data Protection Act has clamped down on the usage of the NRIC number, regulating when and what the NRIC number can be collected and for what purposes. After all, when you have an NRIC number your entire life, giving it out seems natural when you’ve already done it for various things like school and work.

India, which has operated a biometrics-linked national identification program for more than a decade now, is another case study to follow. Albeit with more mixed results.

On the one hand, the Indian government maintains that Aadhaar, as the identification is called, has saved the government billions of dollars through the years. More than US$10 billion, until 2018, it says.

Yet, on the other hand, there’s evidence that the program has led to the poorest of households missing out on government aid.

Think about it. Aadhaar requires biometric authentication, for which it needs constant internet access. That’s something that remains aspirational in many parts of the country.

Even biometric authentication, which is primarily reliant on fingerprints, works against those who need aid the most. For example, labourers or older people whose fingerprints may be distorted and might not get through.

If anything is to be learnt from India’s experience, it is this: an identification for targeted subsidies is a great idea, so long as the exclusions—and there will be many of these—are taken care of.

But the Philippines’ national ID is coming, despite the concerns around data and privacy. The government is aiming to register 9 million individuals by the end of this year. The program is expected to cover the entire population by the time President Duterte’s term ends in 2022.

But with the pandemic, those targets may be delayed. In practical terms, it’s tough for people to line up at government offices to register. Likewise, there are concerns around ensuring that scanners collecting biometric data remain clean and don’t spread the virus.

On whether the government will use the ID system only for the greater good, time will tell.

Thailand’s Covid data concerns

If data is the new oil, Covid-19 is an undiscovered well. One which comes with the potential to do much good, and not.

Thailand has quietly dabbled in data, initially with a cash card system introduced in 2017 that provides a monthly stipend to economically disadvantaged households. Lately, that expanded to include subsidies on domestic travel, designed to boost the local tourism industry during the pandemic.

Thai nationals could claim discounts and rebates on flights, hotels, and food as the country looks to boost a shaken economy that’s tipped to shrink by more than 10% without its usual number of overseas tourists flocking to beaches or visiting on shopping trips.

But access to spending information and financial information concerns observers and experts. “You get a tremendous view into individual citizens that then could be used for a variety of government law enforcement purposes, particularly around the area of silencing social dissent,” Duke University’s David Hoffman, chair of the US National Security Agency’s advisory panel on privacy, recently told Bloomberg.

Dissent is Thailand’s second name right now. The country finds itself in the middle of pro-democracy riots against the government, which is anchored by Prime Minister and former army boss Prayut Chan-o-cha—who oversaw a coup that toppled the then-government in May 2014. Protests have also focused on reform of the monarchy, a taboo subject that’s rarely raised in public in the country.

Photo by Kitthitorn Chaiyuthapoom on Unsplash

It remains to be seen how actively the government will push back on the protesters or use its data. The country is getting to grips with Covid-19 era tourism having this week admitted its first overseas guests—39 visitors from China. But the increased access to information raises the potential further down the line.

In the meantime, there’s cause for concern with reports of China pressuring Thailand for access to the data on its coronavirus-tracking platforms. It seems that the more you gather, the more there is at risk.

SEA Briefs

Ben

This week in funding news, Singapura Finance dropped US$3 million into MatchMove PowerBank, a subsidiary of payments start-up MatchMove Pay, its partner for the Singapore digital bank license application. The funds will be used to establish and grow PowerBank, the incorporated vehicle for the Singapore digital bank license application, giving it dry powder with the results of the license bid set to be announced before the end of the year.

Also, a consortium is set to build and run a plant-protein production facility in Singapore. Proterra Investment Partners Asia is investing up to US$100 million while egg-substitute maker, Eat Just, is putting in US$20 million. This is part of a growing trend of funding food tech startups with funding hitting US$350 million in the first half of 2020.

On the mobility front, ION Mobility, an electric motorbike startup has raised US$3.3 million in seed funding to launch in Indonesia (and beyond) by 2021. The funding included investors, Monk’s Hill Ventures, TNB Aura, Village Global and 500 Durians.

Yet another over the top service provider is launching in Singapore, with Hotstar set to let Singapore residents stream live cricket and more from Star India’s TV network. Partnering with StarHub for the launch, this is likely the first step to launching Disney+ in the island republic. (Disney-owned channels left Singapore’s pay-tv operators in June.)

While Grab and Gojek continue to avoid IPO talk, its Chinese counterpart, Didi Chuxing is reportedly considering a listing in Hong Kong next year. With Uber and Lyft’s share prices languishing after their IPO, it would be interesting to see how the markets in Asia value Didi.

Despite the gloom permeating the global travel market, there is a silver lining for one travel brand. Traveloka claims it is poised to break even this year if markets in Southeast Asia recover to pre-Covid levels. It could be set for profitability in 2021 if the recovery continues. However, with travel restrictions continuing and the costs of Covid-19 quarantine and tests prohibitive for leisure travel, it remains to be seen if things pan out as hoped.

Southeast Asia has scored a point in diversity hires, with a recent report by Boston Consulting Group and the Infocomm and Media Development Authority of Singapore highlighting the region’s track record in hiring women. Women accounted for 32% of the Southeast Asian tech sector workforce, that’s higher than the global average of 28%. Still, there is much improvement to be made in reaching parity, especially at the school level to get more women into tech majors.

Something for the weekend

Kay

Many of us are out and about again, but there are many little things that remind us that nothing is quite the same since Covid-19 struck.

The extra distance between you and your friend when you both caught up over dinner. The face masks that have become a daily necessity for everyone. The constant sanitation that goes on every half hour to clean the public facilities like escalators, elevators, handrails, etc.

It’s the ‘new norm’, they say, and now there’s even art to document it.

Head over to Boundless Artists Collective that is currently showcasing a solo exhibition called “Contactless” by Hong Kong visual artist Louise Soloway Chan. Observe how she captures the increasingly-contactless daily humdrum of life in the city-state through her sketches. I hope you enjoy it as much as I did.

That’s it from Strait Up for this week. Watch out for our weekly recap email summarising this week’s stories—that’ll land in your inbox on Sunday—and then we’ll return with more stories from Monday.

Take time to unwind this weekend as the world figures out a new normal. From all of us here at The Ken Southeast Asia, take care and stay safe!

Cheers,

Jum
[email protected]

Strait Up is a weekly newsletter that cuts through the noise of the week to give you the need-to-know business, tech, and startup analysis. This is a paid newsletter that’s available exclusively to premium subscribers of The Ken Southeast Asia

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