BETTER DAYS
By the time this column comes out, two of the country’s biggest e-commerce platforms — Lazada and Shopee — would be wrapping up their respective “9.9” (September 9) online sales, where customers can purchase almost anything at either discounted rates or with free shipping.
Last July, the immensely popular Big Bad Wolf book sale was launched online for the first time in the country, offering shoppers nationwide a selection of up to 60,000 titles and discounts of up to 99 percent. Apparently, the online sale had stirred up much demand, the organizers extended it for another week due to popular demand — with Filipino consumers asking for stocks to be replenished.
Since the COVID-19 pandemic, such online promos have replaced the shopping bonanzas that previously attracted our people to the malls and convention centers. And where social distancing measures and safety protocols have made brick-and-mortar retail untenable, online entrepreneurs, social media-driven shops, live selling, and e-commerce platforms have filled some of the vacuum and allowed a number of our people to continue spending for their needs and wants.
Clearly, the pandemic has accelerated the digital transformation of our people’s consumer habits — and with it, their adoption of digital forms of payment. In fact, even before the pandemic, more of our people started using online means to conduct their day-to-day transactions.
According to the Better Than Cash Alliance, digital transactions in 2013 accounted for only one percent of total transactions in terms of volume — some 26 million out of 2.5 billion payments per month — and eight percent in terms of value. By 2018, this had grown to 10 percent in terms of volume (roughly 470 to 490 million per month, representing a twenty-fold increase) and 20 percent in terms of value (the equivalent of up to $24.39 billion). Come the pandemic, the adoption rate only accelerated further such that by the 1st half of 2020, digital payments comprised 17 percent in terms of volume and 25 percent in terms of value.
Indeed, one can argue that the pandemic has caused a change in some Filipinos with regards to their attitudes and behaviors towards their handling of money. But that begs the question — by how much? In the October 2020 Consumer Payment Attitudes Survey by Visa, preference for cash among Filipinos had apparently declined to five out of 10 from seven out of 10 before the pandemic. If anything, it appears that while the times are a-changing, it seems we remain a country where cash is king (albeit one whose reign is being rapidly contested).
Either way, this is a welcome development, especially since the benefits of going cashless are numerous. For instance, the Better Than Cash Alliance estimated that fully digitizing social payments (such as those for the 4Ps, SSS, GSIS and Pag-Ibig) could save the government $100 million annually and result in 11 million additional transactional accounts among the largely unbanked population of the Philippines. Filipino businesses could even save up to $45 billion annually if they digitized their supplier payments, instead of relying on checks or even cash transfers.
It was with these in mind that we filed SBN 1764 or the Use of Digital Payments Act, which was co-authored by Senator Grace Poe and whose counterpart in the House of Representatives was shepherded by Rep. Joet Garcia.
This measure seeks to lay down a broad policy through which national government agencies (NGAs), government-operated or controlled corporations (GOCCs), and local government units (LGUs) are mandated to utilize digital payment platforms in their collection of taxes, fees, tolls, imposts and other revenues, as well in their payment of goods, services, and other disbursements.
Earlier this week, we conducted the first public hearing on the measure. And we are happy to note that both the public and private sectors welcomed the bill. They just asked that certain safeguards are included — such as a provision that allows for a transition period for the government instrumentalities and private sector proponents involved, considering that Internet connectivity is still uneven throughout the country. Some even suggested that the measure could facilitate government support for those communities that are “early” in their digital transformation and need a little bit more hand-holding in terms of capacitating their people and reengineering their processes.
Some issues still need to be ironed out in a technical working group. But hopefully, despite the limited session days left on account of the upcoming elections, we will be able to report out a measure that will jumpstart our transition towards more digital payments.
Sen. Sonny Angara has been in public service for 17 years. He has authored and sponsored more than 200 laws. He is currently serving his second term in the Senate.
E-mail: [email protected]| Facebook, Twitter & Instagram: @sonnyangara