The software piracy rate in the Philippines went down from 77% in 1998 to 70% in 1999, the second lowest in Southeast Asia after Singapore (51%). In only four years from 1994, the rate has gone down by 22% for the Philippines. However, the losses to the industry actually increased to $33.2 million from $31.1 million due to the increase in shipments of personal computers into the country last year.
BSA Vice President Huey Tan said that despite the significant improvement in piracy rate, the Philippines continue to suffer significant financial loss to its developing software industry.
"The Philippine government, at the current 10% VAT, lost P970 million in five years and in 1999, tax revenue losses are estimated at P140 million. Two in three business software applications in the Philippines are pirated and this has serious negative implications for the local software industry and the economy. In order to reduce the level of piracy in the Philippines, business must act as responsible corporate citizens who adhere to the laws of copyright," he asserted.
Piracy losses exceeded $12 billion worldwide in 1999 and topped $59 billion during the past five years as shown by the results of the fifth annual benchmark survey on global software piracy released today highlighting the bottom-line impact of copyright infringement to companies that publish business application software.
The survey, conducted by an independent research firm, was commissioned by the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA). Software piracy in the Asia/Pacific region cost software publishers $2.8 billion in 1999, led by a $975 million revenue loss in Japan. Piracy in this region has accounted for more than $17 billion in losses during the last five years. Countries with the highest piracy rates were Vietnam (98%), China (91%), and Indonesia (85%). Countries with the highest dollar losses were Japan, China ($645 million) and India ($214 million).
The continuing problem of software piracy means higher prices for consumers, less publisher revenue to invest in new products, and a potential barrier to success for software start-ups in nations around the world.
"Software piracy continues unabated, robbing the industry of thousands of jobs, billions in wages, tax revenues and critical investments in new technologies," according to Robert Holleyman, president and CEO, BSA.
"No industry would or should tolerate such a high rate of theft. The explosive growth of the Internet is making piracy even more prevalent, since pirated copies of software can be distributed and downloaded quickly and globally, with the click of a mouse. Faced with this threat, BSA has stepped up its education and enforcement efforts, while also asking governments worldwide to show leadership in tackling this very serious, growing problem," concluded Holleyman.
In the Philippines, BSA has launched a Grace Campaign designed to help end-user companies audit and legalize their software. The campaign, which ends May 31, has received an enormous response from the business and industrial community. BSA acknowledges the cooperation of companies, schools and other organizations who have contacted BSA and are willing to legalize their software.
BSA attributes the success of the Grace Campaign to several agencies that have given their support since the campaign's launching in February. Among these are the National Information Technology Council (NITC), National Bureau of Investigation, Department of Trade and Industry, Intellectual Property Foundation and the Philippine Software Association (PSA).
The BSA has also commended the NBI for conducting the first end-user raid in the country. The raid of a multinational company sent a strong signal to organizations using pirated software that the Philippine government and the BSA are taking a hard stance against such entities.
Meanwhile, in other parts of the globe, historically, the combined U.S. and Canadian software markets have registered the lowest rate of software piracy for any region of the world. The North American piracy rate has steadily declined from 32% to 25% over the past five years. Due to the size of its software market, however, North America still accounts for the largest piracy losses to software publishers. In 1999 those losses exceeded $3.6 billion. During the past five years, North American software piracy has totaled almost $16 billion. In 1999, the U.S. had a piracy rate holding steady at 25% and the piracy rate in Canada rose one percent to 41%.
Jointly commissioned by BSA and SIIA, this study -- like the first four -- was conducted by International Planning & Research (IPR). The IPR study evaluated sales data and market information for 85 countries in the six major world regions, and was based on 26 different business applications. The study released today compares 1999 piracy rates to losses in 1998, 1997 and 1996. The complete text - including charts, graphs and methodology - of the 1999 software piracy estimates can be accessed at www.bsa.org or www.siia.net.
BSA is a member of NITC Advisory Board in the Philippines and maintains a Memorandum of Understanding with the PSA cooperating on a variety of issues. BSA is the voice of the world's leading software developers before governments and with consumers in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates computer users on software copyrights, advocates public policy that fosters innovation and expands trade opportunities, and fights software piracy. BSA members include Adobe, Apple Computer, Autodesk, Bentley Systems, Compaq, Corel Corporation, Intel, Intuit, Lotus Development, Macromedia, Microsoft, Network Associates, Novell, Sybase, Symantec and Walker Digital. BSA websites: www.bsa.org or www.nopiracy.com. BSA piracy hotlines: 811-5897 (Metro Manila) or 1-800-1-888-8787 (outside Metro Manila). The SIIA is the principal trade association of the software code and information content industry. SIIA represents leading high-tech companies that develop and market software and electronic content for business, education, consumers and the Internet. Hundreds of these companies look to SPA Anti-Piracy, a division of SIIA, to protect their intellectual property rights around the world. Visit the SPA Anti-Piracy homepage at http://www.siia.net/piracy.htm. Cases of software piracy should be reported via the Anti-Piracy Hotline (800) 388-7478.
The Business Software Alliance (BSA) is a member of the National Information Technology Council International Advisory Board in the Philippines and maintains a Memorandum of Understanding with the Philippine Software Association cooperating on a variety of issues. BSA is the voice of the world's leading software developers before governments and with consumers in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates computer users on software copyrights, advocates public policy that fosters innovation and expands trade opportunities, and fights software piracy. BSA members include Adobe, Apple Computer, Autodesk, Bentley Systems, Compaq, Corel Corporation, IBM, Intel, Intuit, Lotus Development, Macromedia, Microsoft, Network Associates, Novell, Sybase, Symantec and Walker Digital. BSA websites: www.bsa.org or www.nopiracy.com. BSA piracy hotlines: 811-5897 (Metro Manila) or 1-800-1-888-8787 (Philippines).
