The government is looking to replicate China’s e-commerce successes in the Philippines and officials want to know how the regulatory framework allowed online retailers such as Alibaba to become billion-dollar businesses.
Finance Secretary Carlos Dominguez 3rd, along with several Department of Finance and Bangko Sentral ng Pilipinas (BSP) officials, will be meeting with Alibaba founder Jack Ma in China next year for discussions on how to ensure an “enabling” e-commerce environment in the Philippines.
“We are planning to visit him. He invited us to have further discussions in China. We will visit him probably in January with central bank (officials),” Dominguez was quoted as saying in a Finance department statement.
“We’ll review the regulatory environment here so that we don’t have regulations that choke the growth of e-commerce,” he added.
“We must look at our (financial) regulations and ensure that it will not stymie the growth of our MSMEs (micro, small and medium enterprises).”
The Bangko Sentral, along with industry stakeholders, launched the National Retail Payment System in December 2015 in a bid to create a safe, efficient and reliable electronic retail payment system in the country.
In March this year, the BSP came up with two electronic fund transfer payment schemes—Instapay, which caters to MSMEs, and PESO Net, which supports bulk payment transactions of large companies.
Ma, who began his $23-billion business empire in a small apartment in Hangzhou, China, recently visited Manila to receive an honorary doctorate and follow up on a financial technology venture with Globe Telecom.
He was quoted as telling Dominguez that he wanted to help create a cashless society and connect the Philippines’ e-commerce systems to China and other global markets.
Ma also told the Finance chief that he wanted to invest in the local service industry. He was quoted as saying: “The Philippines has the best service and has the heart to become key players in the industry.”
Dominguez said Ma also told him about the “3-1-0” initiative where budding entrepreneurs in China can quickly borrow up to $5,000 online—three minutes to process the loan, one minute to get the money transferred to the borrower’s bank account and with zero human contact.
Ma said the “3-1-0” program incurred losses of only $4 out of $10 million as against $10 out of $100,000 for loans with human contact involved.
Dominguez said the e-commerce innovations pioneered by Ma, along with building a logistics backbone for MSMEs in the country, were now being explored by the Finance department to help empower micro and small entrepreneurs.
“Ma told us about the power of e-commerce. Today’s millennials are more comfortable doing digital transactions rather than physical transactions. He said that this is the way to the future,” the Finance chief said.
“The whole point of the matter is if you have a digital platform like that you develop a lot of information that you can use in giving loans, and even in providing security information to the police,” he added.