Digital sector needs policy framework

Camarines Sur Rep. Luis Raymund Villafuerte urged Congress yesterday to lay down a policy framework aimed to encourage the flow of venture capital to Filipino technology entrepreneurs who need close to $4 billion in startup funding over the next 10 years.

“We cannot cash-in on the new frontier of digital economy, which offers unparalleled business opportunities for Pinoy startups, if we do not put in place the necessary regulatory reforms to help them tap the billions of dollars and pesos in funding available from foreign and local sources,” he said.

“We can tap both foreign and local investors, but they would be wary about investing in our startups if we do not have a concrete set of rules and the incentives that would encourage them to invest here, instead of, say, Singapore or Indonesia,” he said.

Villafuerte cited a recent study by Google and Temasek, a Singaporean investment company, which showed up to $200 billion in digital business opportunities would be available in Southeast Asia by 2025.

The study estimated the Philippines’ share of such business would be about $19 billion, but Filipino digital entrepreneurs would need $4 billion in funding.

Villafuerte said the country’s projected $19-billion share is more than 10 times the local digital sector’s current value of $1.7 billion.

Based on the study, the country’s digital economy is primarily fueled by online shopping and travel spending but sadly lacks the investments needed to spur the growth of Filipino startups, he said.

In terms of electronic commerce, Villafuerte cited a separate study showing the Philippines, Indonesia, Malaysia, Singapore, Thailand, and Vietnam account for less than one percent of the total global online retail market out of sales projected to top $1 trillion this year.

He said the study showed retail ecommerce is projected to expand to nearly $2.7 trillion in 2020.

The lawmaker urged digital entrepreneurs to take advantage of such huge business opportunity to make them “thrive not only here but in the global market as well.”

Villafuerte has filed Bill 2882, which seeks to help digital startups to break into the lucrative e-commerce market by providing them with incentives and simplifying registration procedures.