Philippines piracy loses hit $69M in 2004

24.05.2005
Von Lawrence Casiraya

The software piracy rate in the Philippines dipped by a single percentage point in 2004, but revenue losses due to piracy swelled to US$69 million from $55 million in 2003 due to increased PC penetration.

A study commissioned by the Business Software Alliance (BSA) and conducted by the International Data Corporation (IDC) shows that the country?s software piracy rate dropped to 71 percent last year. The study examined the software piracy rates in 87 countries worldwide.

In a teleconference with local reporters, BSA Asia Pacific director Jeffrey Hardee noted that most of the countries with high piracy rates, including the Philippines, have higher local PC penetration. A previous IDC report stated that PC shipment in the Philippines grew by 12 percent last year to more than 420,000 units.

The key findings for the Philippines reflected global and regional piracy trends. Overall, the global piracy rate also went down by a percentage point to 35 percent in 2004, but total losses increased to $33 billion from $29 billion in 2003.

Last year, total spending on commercial packaged software amounted to $59 billion, but the total value of software installed worldwide was estimated at $90 billion. In Asia Pacific, which posted the fourth highest average piracy rate at 53 percent after Latin America, Europe (excluding European Union nations), and Middle East/Africa, losses rose to $8 billion in 2004.

Three of the top five countries with the highest piracy rates are also in Asia Pacific -- Vietnam, which topped all countries at 92 percent, China at 90 percent, and Indonesia at 87 percent.

The BSA stated that the value of pirated software likewise rose because the US dollar fell by an average of 6 percent against other currencies.

The study tackled the significant contribution of broadband Internet penetration to software piracy primarily because of the proliferation of peer-to-peer (P2P) networks and other file-sharing mechanisms that could be used to download software illegally.

Last year saw an additional 44 million Internet users in Asia Pacific. IDC estimates that China alone will add 100 million more users in the next few years. More than 7.5 million households in the region will also have broadband access.

?Piracy is still most prevalent in countries where the software market is growing and personal computing becomes more integral to business and daily life,? said Martin Kralik, associate director for consulting at IDC Asia Pacific.