Even more important is attracting foreign capital to invest in hi-tech Filipino entrepreneurs, who are still relatively uncommon on the local scene. Ironically, in the country where a computer-college student created the infamous Love Bug virus, there is still no Filipino rival to Indian software giant Infosys. That's partly because very few people have access to computers or the Internet. According to the Asian Development Bank, in mid-1999 the Philippines had only 1.3 Internet hosts for every 10,000 people. But an even bigger problem for small companies in the Philippines is tapping capital to get started.
Banks are too conservative to lend to small entrepreneurs with little or no business track record.
The Philippine Stock Exchange, which has seen foreign investors leave in droves this year because of concerns over Muslim separatists and perceptions of cronyism, isn't receptive to dotcom listings. There are a few exceptions, such as Diversified Financial Network, a Web site offering financial information, on-line banking and stock trading that plans to list on the bourse this year. To help encourage more local dotcom companies to issue shares, the government is pressing the stock exchange to ease its listing requirements. The administration is also considering ways of attracting more foreigners to invest venture capital in Filipino start-ups. One idea would be to use a government agency to share the investment with the foreign investor, thus spreading the risk.