Connecting Prosperity: How Mobile Internet Lifts Household Wealth in the Philippines

The ADB study, in collaboration with LSE and the University of Bristol, finds that expanding mobile internet connectivity in the Philippines significantly boosts household wealth, education, and women’s employment. It shows that digital access acts as a powerful equalizer and engine of inclusive economic growth.

The Asian Development Bank (ADB), in collaboration with the London School of Economics and Political Science (LSE) and the University of Bristol, has produced a pathbreaking Economics Working Paper titled “Mobile Internet Connectivity and Household Wealth in the Philippines.” Authored by Zhiwu Wei, Neil Lee, and Yohan Iddawela, the study offers an in-depth examination of how mobile internet infrastructure influences household wealth and social progress in a developing island economy. Between 2010 and 2022, internet use in the Philippines surged from 25 percent to 75 percent of the population, while mobile subscriptions exceeded the number of people, highlighting how deeply connectivity has reshaped Filipino life.

Mapping Cables to Wealth

Using nearly 270,000 geocoded cell tower records, household data from the Demographic and Health Surveys (DHS), and the location of submarine cable landing points, the researchers developed an ingenious method to measure the causal impact of connectivity on wealth. Proximity to these cables, which determine the ease and cost of extending internet coverage, served as a powerful instrumental variable. The results were striking: doubling the number of nearby cell towers raised household wealth by around 0.04 standard deviations, a tenfold larger effect than simple correlations suggest. These findings remained consistent even after controlling for population, geography, and economic activity, and were validated through multiple robustness tests, including placebo analyses using pre-mobile era data.

Barriers, Reforms, and a Digital Turn

The study highlights how the Philippines’ complex geography and outdated telecom regulations long hampered network expansion. For decades, operators required a congressional franchise to build infrastructure, a unique rule that discouraged competition and delayed connectivity. Added to this were fragmented permits and the logistical hurdles of serving more than 7,000 islands. However, reforms such as the Konektadong Pinoy Law of 2025 have begun to dismantle these barriers, removing the franchise requirement, promoting infrastructure sharing, and clarifying spectrum allocation. The authors also cite the 2024 creation of an open-access national fiber backbone as a turning point that could dramatically reduce costs and bring the benefits of connectivity to underserved regions.

Connectivity and Economic Transformation

Beyond infrastructure, the paper vividly illustrates how mobile internet drives growth across multiple sectors. Areas with higher tower density show greater concentrations of service-oriented businesses, retail, food, transport, and tourism, according to Foursquare’s geocoded data. Connectivity acts as an economic multiplier, enabling entrepreneurship and digital trade. On the labor front, better internet access increases female labor force participation, particularly in flexible, gig-based, and remote work sectors that expanded during the pandemic. Yet, full-year female employment slightly declines, suggesting a shift toward informal or temporary arrangements. Education also benefits: students in connected regions are more likely to complete secondary schooling and achieve higher years of education overall.

Toward Inclusive Digital Prosperity

While mobile internet access clearly raises wealth, its benefits are uneven. Urban households gain 3.6 times more than rural ones, though mid-sized towns and peri-urban zones experience the strongest improvements. The poorest and least educated households also record meaningful progress, as even minimal connectivity improves access to markets, jobs, and essential services. However, for more educated or affluent groups already enjoying broadband, the marginal impact diminishes. This uneven pattern signals both opportunity and warning: mobile connectivity can narrow poverty gaps but may widen regional inequalities if not supported by inclusive policies.

The study’s rigorous econometric design strengthens its conclusions. After accounting for topography, rainfall, and nightlight intensity, proxies for economic activity, the causal relationship between mobile connectivity and household wealth remains intact. Placebo tests confirm that before the mobile boom, proximity to submarine cables did not influence wealth, proving that the effect stems directly from improved connectivity. Alternative analyses using Ookla’s speed test data further reinforce the results: faster download and upload speeds correlate strongly with higher household wealth.

In its policy reflections, the paper concludes that mobile internet is now as fundamental as electricity or transport, shaping opportunities for work, learning, and enterprise. Yet, infrastructure alone is not enough. The authors call for complementary measures, digital literacy training, affordable devices, and equitable regulatory frameworks to ensure that connectivity translates into inclusive growth. Without these, the digital revolution risks deepening inequality even as it drives prosperity.

Ultimately, the ADB study provides compelling evidence that mobile internet access is not merely a technological advancement but a transformative tool for social mobility. It fuels economic diversification, empowers women, expands educational attainment, and strengthens local economies. The Philippines, with its complex geography and dynamic reforms, offers a crucial lesson for other developing nations: bridging the digital divide is one of the most effective strategies for reducing poverty and building resilient, future-ready societies.