Ladies and gentlemen, magandang hapon po sa inyong lahat!
Thank you to all the participants for coming to today’s virtual launch. Finally! After more than a year of preparation, we will have an updated Philippine e-Commerce Roadmap in place that will set the course of our country’s e-commerce until the end of President Rodrigo Roa Duterte’s term by 2022.
As roadmaps go, we take into account that e-commerce is fast and agile, and the technology lifecycle is short and swift. As such, we’ve prepared an immediate and short-term plan designed with a long-term horizon. Our goal is that through this Roadmap, the actions we take in the next two years will bear fruit in the years to come, especially in a post-pandemic future.
Before anything else, let us recognize the representatives of the e-commerce ecosystem present here. These include platforms, payment gateways and fintechs, logistics service providers, and telcos. We also have enablers, our partners in government, development partners, the foreign chambers, as well as tech giants like Google, Facebook, and Viber.
Thank you for your presence here today and we hope that we can continue working together in strengthening our country’s e-commerce.
RECOVERING PH ECONOMY
In the last 70 years, our economy has had a 5% average growth rate per year thanks to domestic consumption. But after growing to more than 6% in the last few years as a result of our strong macroeconomic fundamentals, our growth hit a wall in 2020 in the wake of the COVID-19 pandemic and the resulting economic challenges. As noted by the Philippine Statistics Authority (PSA) yesterday, our GDP last year hit -9.5%, the first annual contraction of our GDP since 1998, a year after the Asian financial crisis happened.
Despite these challenges, our economy’s trajectory clearly points to a gradual recovery. On a quarter-on-quarter basis, our GDP moved from a low of -16.9% in the second quarter of last year—which had the most stringent community quarantine measures—to -8.3% in the fourth quarter as our economy reopened and the lockdown was eased.
We’re also seeing other signs of our economy’s recovery. With the opening of more businesses, our unemployment rate has dropped from a high 17.7% during the height of the lockdown to 8.7%. Furthermore, our manufacturing PMI rose to 50.1 in September, the highest since February, which indicates the resumption of operations in the manufacturing sector.
Despite the pandemic, our Board of Investments (BOI) registered Php1.02T in approved investments for last year, the 2nd highest amount in the agency’s 53-year history. And as reported by the UN Conference on Trade and Development (or UNCTAD), we managed to buck the trend as Foreign Direct Investments (or FDIs) rose by 29% in the Philippines last year even as it contracted by 31% for the Southeast Asian region.
Thus, we are optimistic that despite COVID-19, our country can recover and our economic growth can again reach pre-pandemic levels and beyond.
COVID-19 & E-COMMERCE
Our economic growth can also take advantage of the e-commerce opportunities that had been brought to light by the pandemic. We started the journey of the e-Commerce Roadmap in August 2019, mindful already at that time that e-commerce was the wave of the future. But when the pandemic struck, we saw e-commerce adoption in the Philippines boom.
Because of the community quarantine lockdowns, many of our people saw the convenience of buying online. What’s more, the Business Name Registration System (BNRS) of the Department of Trade and Industry (DTI) reported a significant increase in the number of online sellers that registered their business names last year. From 1,700 from January to March 2020, the number of online businesses zoomed to around 88,000 by year’s end. Moreover, for the month of January 2021, online business registration has already hit 93,318. This is a clear indication of Filipino resilience as many of our countrymen adapted to the challenging times.
This growth of e-commerce in the country was also made easier thanks to many of you here. In April and May of last year, at the height of the quarantine period, the e-commerce sector banded together in true Bayanihan spirit to support DTI’s Reboot Package for Online Enterprises to assist micro and small businesses. The marketplace platforms, last-mile delivery providers, fintechs, telcos, and our friends from Google and Facebook all contributed to this joint effort. They shared information, softened onboarding policies and terms, provided discounts, and contributed time and effort in upskilling our Micro, Small, and Medium Enterprises (or MSMEs) through our very successful CTRL BIZ: REBOOT NOW program. Salamat po sa inyong tulong para sa ating MSMEs.
We would also like to thank our logistics service providers—our frontliners—who continued to work even with the harshest conditions to make sure that goods were delivered. Furthermore, they worked closely with DTI to ensure this unimpeded flow of goods.
PH E-COMMERCE & ECONOMIC GROWTH
Thus, as our economy recovers from the pandemic, we can harness the fast-growing e-commerce in the country to boost our economic growth. We’ve already seen how e-commerce has come to our rescue—and was ready to fill the void left by brick-and-mortar businesses unable to serve our people—because of the lockdowns. Online retail, delivery services, online entertainment, digital services, telehealth, work from home arrangements, digital payments—all of these helped us in the past year and continue to do so until now.
Just to inform you, UNCTAD¹ conducted a survey last year to see how the pandemic has changed the way consumers use e-commerce and digital solutions. While the survey has shown that people are shopping online more frequently and rely more on the Internet for news, it also suggested that changes in online activities are likely to outlast the pandemic.
In this light, we need to take advantage of how the pandemic has boosted e-commerce in the Philippines, given that people now accept the digital life as the “New Normal.” We are confident that the new e-Commerce Roadmap will help us in this regard. From a baseline of P599B (USD 12B) that e-commerce contributed to our economy in 2020—or 3.4% share to the GDP—our target is increase this to P850B (USD 17B) by 2021—or 4.3% share– and P1.2T (USD 24B)—or 5.5% share– by 2022. Further, we hope to increase the number of e-commerce enterprises from 500,000 in 2020 to 750,000 by 2021 and 1M by 2022.
At the same time, we need to address the challenges that the pandemic has revealed in our country’s e-commerce system. We hope that with today’s launch of our e-Commerce Roadmap, we can move to address these challenges.
E-COMMERCE PHILIPPINES 2022: KEY MESSAGES
The new Roadmap has 20 strategies and 22 action agenda that revolve around a simple formula. This is: Speed + Security + Structure = Sales.
This formula was derived and synthesized from the numerous sessions conducted with stakeholders. For this, we would like to thank our able DTI e-Commerce Team, economist Dr. Vic Abola from the University of Asia and the Pacific (UA&P), and Prof. Ronilo Balbieran of the Research, Education, and Institutional Development (or REID) Foundation.
Allow me now to discuss the four key narratives of our Roadmap:
- BASTA E-COMMERCE, MADALI is our mantra. At the end of the day, we want more online sellers, and more online buyers who will buy more repeatedly. MADALI means easy and fast, but we’ve also made it stand for Market Access, Digitalization, and Logistics Integration (a.k.a. MADALI).
- Market Access: Whether through cross-border e-commerce transactions or easy onboarding by MSMEs to marketplace platforms, the plan calls for facilitating ease of doing online business.
- Digitalization: This focuses on the digital transformation of enterprises, whether micro, small, medium or large, as well as the digitalization of government. We need to scale up e-commerce, whether this is B2C, B2B, or B2G.
- Logistics Integration. The end game is to reduce logistics cost. Presently, logistics cost in the Philippines is comparatively higher than our neighbors at 27% in cost over sales, as compared to Thailand’s at 11%.
- BUILDING TRUST is our challenge. Unfortunately, the uptake of e-commerce has resulted in an increase in consumer complaints. According to our DTI Consumer Protection Group, the total number of complaints related to internet transactions has reached 15,947 in 2020 and over 857 in January 2021 alone. For e-commerce to succeed, government and private sector must install redress mechanisms that are far more efficient than what we have today. But we must also instill values and ethics in our citizens—both merchants and consumers alike—to serve as the foundation of trust in our country’s e-commerce.
As such, we thank Congress for heeding the call of President Duterte to prioritize the Internet Transactions Act (ITA), whose provisions will enable government—especially DTI—to function more effectively and more responsively. In this regard, we thank House of Representatives Deputy Speaker Wes Gatchalian for the pioneering work that he has done. We also look forward to the passage of the bill in the Senate with Sen. Koko Pimentel in the driver seat. We are confident that with this legislation—as the bill’s Declaration of Policy states—we can promote and maintain a robust e-commerce environment in the country by building trust between online merchants and consumers.
- TAYAAN ANG PILIPINO is our promise. Investments and innovation is critical to achieving a robust internet economy, and tech start-ups will play a key role. Our country needs to invest and support tech start-ups. This means the government needs to facilitate funding and financially support the digital transformation of businesses. We will do whatever is necessary to harness the creative, disruptive, innovative, and entrepreneurial spirits of our people as they become the champions of e-commerce in the country. Tatayaan natin ang ating lahi!
- WHOLE-OF-GOVERNMENT is KEY. We are particularly grateful to all our fellow public servants who are here in support of our e-Commerce Roadmap. The presence of the agencies today should give us all confidence that the Duterte Administration is serious in sustaining the momentum to promote e-commerce.
FINALLY, OUR CALL TO ACTION
However, e-commerce not only requires a whole-of-government approach, it needs a whole-of-society approach.
With today’s Roadmap, we not only have a framework but concrete strategies and steps to help us shape the future we’ve envisioned in our Ambisyon Natin 2040. To this end, the government will play a lead role in facilitating what’s been outlined in the Roadmap while also enabling the different stakeholders involved.
But the government must also set an example by embracing e-government capabilities and making their online services and infrastructure easily available to businesses and consumers. Likewise, the various agencies must operate seamlessly with the public being able to transact with them online.
Lastly, Filipinos must work to build their trust in our e-commerce system. Our people need use our existing online platforms and infrastructure, push them to the limit, and contribute to their growth and strengthening. It is only then—as we repeat the mantra, “Basta e-commerce, madali!”—we can begin to redefine e-commerce from “electronic commerce” to “easy commerce.”
To conclude, as we recharge our economy and build back better in the post-pandemic era, let us create a “Better Normal” by taking advantage of the benefits of e-commerce. And as we aim for fast, convenient, and easy commerce in a digital world, let us remember that more e-commerce means more jobs and employment generated for our countrymen. This, in turn, will give our people a more comfortable and higher quality of life as promised by President Duterte.
Maraming salamat po at mabuhay tayong lahat. ♦
Date of Release: 29 January 2021