“An Act Protecting Consumers and Merchants Engaged in Internet Transactions, Creating for this Purpose the eCommerce Bureau and Appropriating Funds Therefor”
September 3, 2020, as delivered
Good afternoon Mr. Chairman Koko Pimentel, sa atin pong author Sherwin Gatchalian, Co-chair Sen. Pia Cayetano, Sen. Marcos.
All your inputs, I’ve taken note po. Very important also to our fellow workers in government and partners in private sector.
During the State of the Nation Address (SONA) of the President, we were gratified to hear about his directive to work with Congress on the enactment of the Internet Transactions Act to promote the growth of ecommerce and at the same time protect the welfare of online consumers. We heard the President muttered “this is very good” which shows his appreciation for this important piece of legislation.
In terms of its parliamentary status, the bill is proceeding in both houses of Congress. We thank the Chairs of the Senate Committees on Trade, Commerce Entrepreneurship, Ways and Means, and Finance, for the Joint Committee Hearing today. In the House of Representatives (HOR), a Committee Report prepared by the Committee on Trade & Industry, in substitution of House Bills Nos. 6122 and 6958 is expected to be filed for floor deliberations soon.
To say that the proposed bill on the Internet Transactions Act is relevant and timely is truly an understatement. And we thank the authors of the bill Sen Win Gatchalian and Senator Binay for this measure, pati na rin po ‘yung magiging proposed bills in the future nila Senator Imee Marcos, and mga strong inputs po from Senator Cayetano and of course our Chair Pimentel.
Prior to COVID19, the DTI has already mobilized the ecommerce ecosystem and engaged the marketplace platforms, logistics providers, payment gateways and government agencies in updating the Philippine eCommerce Roadmap, to develop strategies to: (i) promote ecommerce growth in the country, (ii) increase the number of online merchants, and online sellers, and (iii) ensure consumer protection. Our prime directive was to BUILD TRUST, and our simple strategic framework delved on Speed, Security, and Structure resulting in SALES. While undergoing the roadmap review, COVID19 struck the world.
Six months into the pandemic, we see a new normal. Now, our goal of “Building Trust between Online Merchants and Online Consumers” has created an even profound significance since eCommerce adoption has indeed accelerated over the past six months.
Allow me to cite DTI facts as barometers:
In terms of Business Names Registered with the DTI—a requirement for sole proprietors, we saw substantial increase. Prior to the declaration of the state of national emergency, only 1,753 online businesses registered their business names from 1 January to 15 March this year. However, from the start of community quarantine period in 16 March 2020 until 31 August 2020, there was a 4,080% increase in business name registration of online businesses or those whose business falls under Philippine Standard Industrial Classification (PSIC) 47913 which refers to Retail Sale via Internet.
While we see a huge jump in business names registered, our regulatory arm—the CONSUMER PROTECTION GROUP—has likewise seen an equally significant rise in the number of CONSUMER COMPLAINTS received pertaining to ONLINE TRANSACTIONS.
From a total of 2,457 complaints in 2019, the number of consumer complaints related to online transactions jumped to 12,630 as of 31 August of this year. The quadruple increase of 414.12 percent is majorly attributed to the surge of online transactions due to the COVID-19 pandemic. The highest number of complaints of 8,045 were during the months of April and May when the strictest level of Community Quarantine was in effect in major areas of the country. Due to limited movement of people, consumers heavily relied on online shopping for their basic and essential needs.
The proposed Internet Transactions Act, brings to light the core mandate of the Department of Trade and Industry—which we summarize in three words: TRABAHO, NEGOSYO, KONSYUMER. The proposed Internet Transactions Act brings to fore the government’s twin role of enabling businesses and protecting consumers.
With our efforts to promote online commerce, the DTI seeks to encourage the growth of the ecommerce sector as a source of jobs, promote the digitalization of MSMEs to expand their customer base, optimize their operations, and reduce cost. We want a more robust e-commerce, tulad ng sinabi ninyo Mr. Chairman, na napakaimportanteng matulungan itong mga bagong sibol na mga online business people. For these reasons we see the value of the proposed Internet Transaction Act, now the subject of the Senate’s deliberation.
For these reasons, we see the value of the proposed Internet Transactions Act, now the subject of the Senate’s deliberation. The bill establishes a regulatory framework for internet transactions that is animated by the following key principles:
One, the bill is about PROMOTING AND SUPPORTING FILIPINO PLATFORMS AND BUSINESS.
- The bill embodies the principle that offshore non-resident platforms shall be treated under the law equally as domestic platforms
- Equal treatment gives domestic platforms opportunities to grow and be competitive
- May Tax incentives din po as stated by Senator Imee Marcos. We encourage domestic entrepreneurs, especially during this time of pandemic, to operate above-ground.
- The unified eCommerce regulatory framework carves a path for DTI to address regulatory gaps in the field of eCommerce when it is unclear whether existing regulatory agencies could exercise jurisdiction over emerging businesses.
Two, the bill is also about PROMOTING THE BEST INTERESTS OF FILIPINO CONSUMERS.
- The bill provides effective remedies for Filipino consumers who are injured, even if sellers are located abroad, by ensuring the government’s regulatory authority over foreign platforms/sellers.
- DTI regulatory powers will allow for pro-active protection of Filipino consumers.
- DTI having authority to take down websites or issue cease and desist orders allows prompt and effective means to curtail further harm to consumers caused by websites selling illegal or dangerous products or services.
- The eCommerce Philippine Trustmark provides greater public assurance of safety and security in internet transactions.
Finally, Mr. Chairman, the bill BALANCES THE INTERESTS OF ENTREPRENEURS, CONSUMERS, AND GOVERNMENT.
- The bill ensures a forum for eCommerce stakeholders to raise issues and concerns surrounding eCommerce, allowing regulation to occur under an environment of stakeholder consultation.
- Also, the regulatory approach and framework, informed as it is by experience after years of observing actual developments on the ground in emergence of eCommerce, can be promoted as a regional model moving forward.
Mr. Chairman, to the authors and honorable Senators, the DTI is fully supportive of this bill, and we sincerely hope for the bill’s immediate enactment. However, we wish to submit to the Joint Committee some of our proposed revisions for consideration of the Senate, clarifying also the message of Senator Marcos. These would be on the Scope and Coverage, Extra Territorial application, Powers of the eCommerce Bureau, Composition of the Bureau, Jurisdiction of the DTI, and Transitory Provisions.
In conclusion, we in DTI have adopted a tagline, BASTA ECOMMERCE MADALI, to encourage our citizens, whether online merchants or online consumers to adopt eCommerce. But, MADALI also stands for Market access, Digitalization. Logistics Integration—which serves as our priorities.
The DTI believes that the proposed Internet Transactions Act is a landmark piece of legislation, especially at this time when the world is faced with a global pandemic and online commerce / contactless transactions have become the new normal.
We need a law that will allow government agencies to maximize the benefits brought about by a digital economy, and effective enough for our Kababayans to put their trust in online commerce, and feel safe.
Maraming salamat po sa inyong lahat at mabuhay po tayong lahat!