The Department of Trade and Industry (DTI) has reported unprecedented increase in the registration of online businesses as well mounting increase in complaints involving online transactions since the declaration of national public health emergency due to the pandemic.
DTI Secretary Ramon M. Lopez reported this during the Senate hearing on the proposed Internet Transactions Act or the proposed “Internet Transactions Act,” authored by Senators Win Gatchalian and Nancy Binay during the joint hearing of the Senate Committee on Trade, Commerce, and Entrepreneurship Chaired by Sen. Aquilino “Koko” Pimentel III and Co-Chaired by Sen. Pia Cayetano, as well as the committees on Finance and Ways and Means.
According to Lopez, prior to the declaration of the state of national emergency, there were 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 percent 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.
But Lopez noted that while there was a huge jump in business name registration, the regulatory arm—the Consumer Protection Group of DTI—has likewise seen an equally significant rise in the number of consumer complaint received pertaining to online transactions.
From a total of 2,457 complaints in 2019, Lopez said 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,” he said.
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.
These figures only showed the need for the immediate passage of the proposed internet transactions bill.
“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,” said Lopez during the Senate hearing.
He cited the bill for seeking to establish a regulatory framework for internet transactions.
One, the bill embodies the principle that offshore non-resident platforms shall be treated under the law equally as domestic platforms
It also calls for equal treatment gives domestic platforms opportunities to grow and be competitive. It also provides tax incentives thus encourages domestic entrepreneurs, especially during this time of pandemic, to operate above-ground.
In addition, the proposed 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, he said.
Secondly, Lopez said the bill promotes the best interest 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.
Under the bill, the DTI has the 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.