E-commerce seen as major growth driver by 2020

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The Department of Trade and Industry (DTI) said that the Philippine E-Commerce Roadmap (PECR) 2016-2020 will boost the e-commerce industry to become a major economic growth driver in the country.

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In a statement, the DTI said the roadmap, which aspires to see the e-commerce industry contribute 25 percent or one fourth of the country’s gross domestic product by 2020, would help propel the e-commerce industry’s growth, supporting the entry of about 100,000 micro, small, and medium enterprises (MSMEs).

The roadmap will help the Philippines to catch up with the fast internet penetration and growing usage in the country, “currently estimated to have the fastest growing internet population in the world, with recent statistics estimating 530 percent growth over the past five years,” the DTI said.

Every day, an average Filipino spends 6.3 hours using the internet. “Amazingly, the mobile subscriptions of the Philippines exceed its 101.1 million population by 13.5 million,” the DTI said.

After the Electronic Commerce Act of 2000 was enacted, the trade agency developed the final draft of the PECR 2016-2020 on December 29 last year, released by the DTI’s Sector Planning Bureau or E-Commerce Office.

According to the roadmap, the country’s e-commerce adoption has been slow, leading to missed opportunities aggravated by the Philippines’ having one of the slowest and most expensive internet infrastructures not only in Southeast Asia, but also in the whole world.

Global e-commerce is projected to grow by 101.4 percent on the average from 2013 to 2018 from the current $1.15-billion value of the e-commerce industry in the world.

Jude Martin Joya of DTI’s Sector Planning Bureau said during the presentation of the PECR last week that the country’s sluggish adoption of e-commerce was due to challenges such as slow internet speed; high cost of connection; trust and security issues with online shopping, e-payment constraints, as well as consumer preference for traditional shopping by going to malls.

“The Philippines lags behind other Asean countries in terms of internet speed with an average of 3.6 Mbps, while Singapore has 61 Mbps, outspeeding even the USA (22.3 Mbps) and Japan (41.7 Mbps),” the PECR explains.

‘Six I’s’
To address these, the roadmap indicated that there should be “six Is” employed which are: infrastructure, investment, innovation, intellectual capital, information flows, and integration.

For infrastructure, the PECR pointed out the need to establish appropriate supply chain, communications, and applications infrastructure. In terms of investment, there should be promotion and support of various investment opportunities to attract foreign direct investments and capital flows into Philippine e-commerce.

For innovation, protection of property rights as well as investments in research and development counts. In terms of information flows, there should be dissemination of knowledge especially the importance of being able to use, transfer, and process information while promoting privacy and a trusted internet environment. Integration, on the otehr hand, involves the need to strengthen the connection between domestic industries and the global economy.

Joya said the DTI is currently in touch with various agencies and private stakeholders in connection with the roadmap’s objectives such as collaborating with the Department of Science and Technology (DOST) on needed internet infrastructure, and with the Bureau of Internal Revenue on the taxation system and potential incentives for e-commerce enterprises.

PECR 2016-2020 is the country’s blueprint to address issues in the country’s e-commerce ecosystem with the “six I’s” as key focus areas.

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