Ladies and gentlemen, magandang hapon po sa inyong lahat.

Greetings to President Luna and her team at the Small Business Corporation (SBCorp) as you celebrate your 30th Anniversary! Thank you as well for inviting us to speak to our institutional partners, as well as the different stakeholders in the micro, small, and medium enterprise (MSME) sector on the need to push for digitalization in order to adapt to the “new normal.”

The COVID-19 pandemic has forced all of us to re-think the way of doing things and this has resulted in major transformations in the way we do business—including business models and processes. For many, this also involves a pivot from offline or face-to-face transactions to online transaction.

We’d like to cite the example of SBCorp in understanding the importance of digital adoption. They digitalized their loan applications so that they could still serve our MSMEs despite the pandemic. Moreover, they’ve been providing support to their borrowers to strengthen their businesses in their pivot to digitalization.

But, even as the pandemic has catalyzed the rapid acceleration of our country’s digital transformation, our developing digital economy will also become the source of the Philippines’ productivity growth and recovery from the pandemic. As President Rodrigo Roa Duterte had said: “The Philippines wants to be an active participant in the global digital economy.”

More importantly, the promotion of financial technology and digitalization will prepare and empower our MSMEs with the technologies of the Fourth Industrial Revolution (4IR).

Last September 2020, the Department of Trade and Industry’s (DTI) e-commerce group conducted a baseline survey to determine the level of digitalization of our MSMEs and compare it with the ASEAN data. Results showed that the majority of the respondents— or around 73%– need capacity-building related to digitizing their business.

Skills that they need to acquire vary by region and by e-commerce engagement. For example, those who are engaged in e-commerce prefer to focus more on improving digital skills while those who are not engaged in e-commerce prefer skills on how to get started with an online business. Among the top needed skills identified by respondents are financial, marketing, content management, basics of e-commerce, and starting an online business.

Another thing to consider—especially during the pandemic—is that digitalization ensures that MSMEs’ business activities can continue safely. For example, restaurants and hotels can do this by conforming with the minimum health protocols thru QR codes, as well as utilizing smartphone applications so that customers can order food or request for delivery.

Digitalization also helps MSMEs to increase productivity, reduce costs, offer and/ or diversify new products and services, improve competitiveness, and increase sales and revenues by managing transactions at a distance. It can also deliver goods and services efficiently, facilitate access to financial products, and enable them to engage with new and existing customers.

Following the results of the survey, our e-commerce group is now in the process of crafting modules specific to the needs of MSMEs based on their level of digitalization through the Digital Transformation Initiative for MSMEs. Providing internet connectivity and related business support services through the first pilot of the Innovation Hubs and Satellites Network will also realize the vision of the e-Commerce Philippines Roadmap 2022 of MSMEs fully participating in the digital economy.

Meanwhile, recognizing the challenges to financial inclusion will help us to address the gaps in MSMEs’ access to finance. In particular, we have to link them to the financial mainstream where they can access safe, affordable, and innovative financial services to harness their growth and potential. Clearly, the concerted efforts of the government and the private sector are needed to help MSMEs recover and rebuild—and eventually thrive beyond this pandemic.

Lastly, the adoption of digitalization in all sectors of the economy supports DTI’s innovation agenda. Despite limitations in our technology infrastructure, more MSMEs are conducting their businesses online amidst the pandemic—which is why their digitalization plays a crucial role in developing an inclusive and sustainable economy.

To this end, DTI has been implementing programs and policies that would help to facilitate the transition of MSMEs into digital and making sure they’re properly equipped in the process. The programs in our 7Ms Framework—which includes Mindset, Mastery, Mentoring, Money, Machines, Market Access, and Models of Negosyo—also already include digitalization as well.

For example, we launched our Negosyo Center Online Portal (NCOP) last June to promote ease of doing business and facilitate access to business services by making available online all the services provided by our brick-and-mortar Negosyo Center. Furthermore, our Business Name Registration System (BNRS) Next Generation is an online three-step process—Apply, Pay, Download—that helps proprietors register their business names within eight minutes. This process can be even experienced through your mobile phone.

This is probably why the number of business names registered increased by 44% last year, from around 637,000 transactions in 2019 to around 916,000 transactions in 2020. From the start of the year to as of today, there are around 658,000 total business names registrations. And there are currently more than 3.7M active business names registered in the BNRS from 2016 to present.

Meanwhile, our CTRL + BIZ: Reboot Now! program offers a series of free webinars that are targeted to MSMEs who need to transform their business digitally. Likewise, the Philippine Trade and Training Center-Global MSME Academy (or PTTC-GMEA) offers training and workshops with over 300 modules on digitalization and innovation.

Additionally, our Kapatid Mentor ME (KMME) program, which provides mentorship to MSMEs, is now online to ensure participants’ safety due to the pandemic. And at the height of the community quarantine, we consolidated online tools to help MSMEs find digital solutions to help them cope with the challenges of the pandemic.

What’s more, we’ve been providing greater access to markets through online platforms, from our Virtual National Trade Fair to the online channels of our OTOP Philippines Hub, as well as Go Lokal!’s partnership with e-commerce platforms like Shopinas and Lazada.

Lastly, we’ve updated the e-Commerce Philippines Roadmap to take all of these into consideration. The 2022 Roadmap’s goal is to create a virtuous cycle, wherein we adopt innovations and make sure that they open possibilities for further creativity and inventiveness applied across various industries.

To close, a Digital Philippines is already happening, accelerated mainly by the pandemic. But we are confident that our country can handle this transition only if we work together. Through a whole-of-society approach—where businesses, industries, and people move as one—we can build back better as an entirely transformed digital nation where our people can enjoy a more comfortable and greater quality of life.

Maraming salamat po at mabuhay tayong lahat!

Date of Release: 9 August 2021