By Chino S. Leyco
The government is putting in place a slew of financial technology (fintech) tools to enable micro, small and medium enterprises (MSMEs) to tap the e-commerce market and a wide horizon of other business opportunities, the Department of Finance (DOF) said.
Finance Secretary Carlos G. Dominguez III said that on top of the increasing use of digital technologies to empower MSMEs, the government, through state banks, have also implemented programs meant to promote the sustainability and competitiveness of small businesses.
MSMEs are also among the key beneficiaries of the Tax Reform for Acceleration and Inclusion Act (TRAIN) as they have benefited from tax breaks worth billions of pesos in the first six months of this law’s implementation in the form of a higher value-added tax (VAT) threshold.
“I urge our MSMEs to be innovative, to explore opportunities opened by the new ways of doing business and to be bold in opening new ventures. I assure you that government is supporting you. We will support small businesses in every way possible,” Dominguez said.
“We know the crucial role MSMEs play in forging a better future for our people, and we will partner with you and we will help you in this task,” he added at the 26th Metro Manila Business Conference held recently in Parañaque City.
Dominguez pointed out that MSMEs, which comprise 99.6 percent of all business enterprises in the country, are vital in building “a dynamic and inclusive economy for our people.”
“They employ the bulk of our labor force. They link big manufacturers to their consumer base. They compose the supply chain that, when enabled, will support the industrialization of our economy,” Dominguez said.
The fintech tools that the government is now developing to help MSMEs include peer-to-peer lending, equity crowdfunding, merchant and e-commerce finance and invoice finance, Dominguez said.
“The financial world is being revolutionized by new technologies. We are responding promptly to make the advantages offered by fintech accessible to our enterprises,” Dominguez said.
Moreover, President Duterte has also signed into law the Ease of Doing Business Act of 2018, which aims to reduce red tape significantly and make government more responsive to the needs of our entrepreneurs, Dominguez said.
This new law, he said, will be complemented by several programs encouraging the use of digital technology in all government procedures, including in the Bureau of Internal Revenue (BIR), which is now working double-time on streamlining processes for the documentary requirements on renewing business permits.
A TradeNet system that automates licensing, permit, clearance and certification procedures for all regulatory agencies has likewise been established, he said, and is now being fine-tuned to enable the full interconnection of 76 trade regulatory government agencies across 18 government departments.
This system will also serve as the Philippines’ link to the ASEAN Single Window (ASW).
“This is all happening now and the Bureau of Customs will be the first to go live this month,” Dominguez said.
The government is also ready to run PHPAY, which is a digital payment gateway that will enable taxpayers and other state clients to remit fees and other charges electronically, Dominguez said.
According to Dominguez, PHPAY “will dramatically cut transactions costs across the board” and more importantly, “cut corruption associated with primitive payments systems.”
The Philippine Business Data Bank (PBDB), meanwhile, will soon be on the testing stage to ensure that it serves its purpose efficiently of being the single repository of business registration information in the country, he said.