Department of Trade and Industry (DTI) Secretary Alfredo Pascual led the back-to-back partnership launch of the Philippine FinTech Festival (PFF) and the SME-Financial Empowerment (SFE) Programme of the Monetary Authority of Singapore (MAS). These initiatives are set amidst the rapid development of the Philippine FinTech industry which attracted $342 million in the first half of last year alone, reflecting a strong interest from investors and consumers.
The PFF will kickstart the ASEAN FinTech Month on October 17, followed by Cambodia on October 24 and Thailand on October 27, leading up to the annual Singapore FinTech Festival (SFF) in November. The PFF is a partner of the World FinTech Festival, which is a series of local market showcases, sector deep-dives, and networking opportunities organized in collaboration with a global network of trusted partners building up to the SFF.
“Technology is redefining industries, as well as SMEs, which need the help of the FinTech community to broaden their scope. They may have ideas, but how do they bring them about?” said Sec. Pascual. “One of the DTI’s major projects is a digital platform that will allow small businesses to buy and sell their products.” One goal is to have “a digital shopping mall that will allow enterprises in retail to conduct businesses digitally.”
ASEAN digital transformation
Meanwhile, the SFE programme highlights the incalculable benefits of financially empowering SMEs. "According to numbers amassed from LGUs, SMEs number two million and should be treated as ‘digitally-driven enterprises,’" said Sec. Pascual. "They employ 63% of the workforce and contribute 40% to GDP (gross domestic product). But they lack financing, need technology, and their products and services to be seen and sold.”
Department of Information and Communications Technology (DICT) Undersecretary David L. Almirol Jr. added that to address the SMEs’ challenges, the government must adopt technology and embrace its benefits.
He cited examples of challenges: "There are too many manual systems in government which is outdated with insufficient staffing ... Then, in one agency and after months of training, that individual would resign. What will now happen to the technology we built, our projects of connectivity?" He added that collaboration with the private sector will lead to lighter regulations and the freedom to innovate.
MAS’ Chief FinTech Officer Sopnendu Mohanty said, "Technology can drive ideas to help SMEs scale. Financial empowerment, through the SFE programme, is the first step to help SMEs better understand and leverage financial and digital tools to grow. The Singapore ecosystem is pleased to collaborate with the Philippines to support the ASEAN FinTech movement, which would connect the FinTech and Financial Services community in the region.”
PFF launch
The importance of collaboration for technology will become more pronounced in the inaugural (PFF), which will gather more than 200 key stakeholders, thought leaders, policymakers, regulators, and some of the country’s biggest technology companies. Its goal: to highlight the evolution of technology and its impact on financial services, especially on ASEAN.
“The PFF will take a deep, constructive dive into the issues surrounding the cooperation of local enterprises at the national and regional levels," said Amor Maclang, Convenor of PFF, World FinTech Festival – Philippines and Digital Pilipinas, the Philippines’ largest private-sector movement to actively champion technological adoption in industries and regions. "Working with the public sector to increase the country’s digital quotient has always been part of Digital Pilipinas’ advocacy.”
Maclang said that the PFF will help prepare the SMEs “for the new and greater global digital economy. Our dream is to migrate the SMEs into an e-commerce platform and we have been doing so, one SME at a time.”
During the PFF, business leaders, CEOs, and CXOs of companies from the various tech verticals will also share their insights and forecasts on the impact of technology. Investors will find avenues where they can meet the top industry and government leaders and the best tech and creative minds who are launching or developing new companies, products, and services. The PFF highlights are the Startup Community, Hackathons, and Calls for StartUp Innovation Pitches (PitchFests) celebrating industrial and economic progress.
Maclang emphasized that the PFF’s partnership with international governments will help raise the country’s tech capabilities. Acknowledging Mohanty and MAS for “creating a lot of the runways not just for Singapore and ASEAN but the rest of the world,” she said, “We’re also very honored to be supported by the governments of Hong Kong, Israel, and Hungary with whom we work very closely. I also serve in a leadership role in the European Chamber of Commerce. All these organizations are all working together to increase the Philippines’ innovation quotient.”
Registration for and more information about the PFF can be found in https://philippinefintechfestival.ph/registration/
SMEs' road to digital transformation
Technology can bring transformation down to the barangay level, said Jean-Marc Arbogast, the Philippine Country Manager for the International Finance Corporation: "Imagine sari-sari stores that connect online with their suppliers, provide e-services, pay their bills online, have better inventory management, and expand their business."
Selva Ramachandran, the United Nations Development Programme Resident Representative, acknowledged, "Innovation is key for the progress of any country or economy, and the SFE programme will be critical" to it.
SME growth also entails protecting stakeholders' safety through “ a system and infrastructure that secure the enterprises and the trust of the consumers,” said Ramesh Nagarajan, the Lead Payment Security, API of technology company Outseer.
Rico Bautista, president and CEO of insurance company Etiqa, mentioned the "need to work with government in laying out regulations" in developing InsurTech; this combination of insurance and technology is increasing as “more and more companies are moving to machine learning and advanced solutions like risk assessment and perhaps in the future the use of blockchain."
Coins.PH CEO Wei Zhou named another FinTech that can spark growth: "Cryptocurrency is the earliest phase of digital assets, and Bitcoin has been here the longest. Non-fungible tokens are things of culture."
Digital ecosystems and environment
Due to the SMEs' need for a comprehensive digital financial knowledge program and digital economy skillsets, the SFE programme is among DTI's most critical priority programs in digitizing the domestic business space. It was launched in Ghana, with the Philippines among the four countries participating in its inauguration.
Nelly Dillera, Executive Director of the DTI - Philippine Trade Training Center, acknowledged that programs like the SFE programme "encourage entrepreneurs to develop digital solutions that would assist with business functions such as financial literacy."
Sustaining SME growth means integrating them into an environment that will enable them to flourish. Yoly Crisanto, Chief Sustainability and Corporate Communications Officer of the Globe Group, named its prerequisites: "The first thing you need is good connectivity. Then, allowing people to afford the solutions are offering. The third is innovation like BNPL. GCash is not just a payment platform but an entire ecosystem with capital, investments, and loans inside it. We need more of this to make the market more efficient."
The urgent need
Another example of a thriving ecosystem is the community of rider-partners, passengers, and their families built by motorcycle taxi service Angkas. It started with technology giving people "endless livelihood opportunities an excellent step in the right direction to empower SMEs," said Angkas Founder Angeline Tham. "We see ourselves as an SME empowerment tool, and our target is the 18 million motorcycle owners and drivers."
Manish Bhai, Founder and CEO of UNO Digital Bank, echoed the need for a larger ecosystem to provide SMEs "financing when they need it and at a reasonable rate. Unless we put this together, there won't be any success."
Tech quickens this adoption by reducing the red tape and addressing urgent needs for finances. Rajan Uttamchandani, Chairman and CEO of Esquire Financing Inc., explained: "SMEs need to have a loan today or tomorrow and not in weeks or months, because the opportunity is now."
To empower the business community to succeed in ASEAN, Sec. Pascual encouraged the continued collaboration of the public and private sectors: "I am glad that there is a Digital Pilipinas. We want you to do well and share your expertise with enterprises in the Philippines who need your support ... To develop a value chain to create jobs and grow the economy."