DTI chief pushes digitalization to retailers

Trade Secretary Alfredo Pascual is urging Philippine retailers to continue engaging in digital transformation especially in the adoption of digital payment systems.

At the second quarter general membership meeting of the Philippine Retailers Association (PRA), Pascual stressed the importance of digitizing merchant payments in facilitating transactions between consumers and retailers.

“I urge PRA to recalibrate and accelerate digital transformation, especially of micro, small, and medium enterprises, by the promotion of digital payments, as well as digitization of processes of retailers,”Pascual said.

He said the Department of Trade and Industry (DTI) is going to work closely with the Department of Information and Communications Technology (DICT) to come up with platforms to accelerate the digital transformation of MSMEs, including retailers.

“I think if we are able to digitalize the operations of sari-sari stores or other similar small retailers, we will be able to build up a database that could eventually be the basis for the evaluation of banks of the credit worthiness of small retailers. This is because they will have the record of transactions, the purchase of fresh stocks, and the record of sales to customers through the process of digitization of operations of small retailers,”Pascual said.

He hopes to work with counterparts in the DICT to help small enterprises achieve this digital transformation.

Pascual shared that the move towards digitizing payments, is aligned with the recently launched e-Commerce Roadmap 2022, which outlines actions that seek to expand ecommerce by enhancing speed and security, and building enabling structures.

“To promote responsible digital payments by consumers, and acceptance by micro and small merchants, we have created the Public-Private Working Group on the Digitizing Merchant Payments Project, of which the PRA is a member,”Pascual said.

He said the group aims to recovene this year so that it can pilot options for implementing and enhancing digital payments in supply chains, and scale the digitization of payments at various points across the merchant value chain.

Pascual said this effort is aligned with a number of objectives such as increasing the use of digital payments in a responsible manner at both physical and online merchants, particularly by identifying specific adoption and use barriers; and identifying and agreeing on actor-specific actions to drive merchant payment digitization, including time-bound pilots focused on specific segments of merchants.

He said this also aligned with the aim of engaging national strategies and being part of national advocacy campaigns on digital payments as well as sharing of experiences and lessons learned, and collaborating on mutual research interests such as merchant segmentation.

Pascual emphasized that the COVID-19 pandemic has facilitated the greater adoption of the digital economy in the country.

He cited findings from the e-Conomy Southeast Asia 2021 Report, which named the Philippines among the fastest growing digital economies in the region.

“Strong indications from both the supply and demand side of the internet economy are expected to sustain this, ”Pascual said, adding that the Philippines leads the way with online sales increasing by more than 25 percent.

“So, I encourage you to continue engaging in digital transformation. The government has been working to ease and widen retailers’ adoption of the digital economy,” Pascual said.

Moreover, Pascual is confident the amended Retail Trade Liberalization Act (RTLA) will improve the country’s attractiveness to investors, especially in the retail trade industry.

“We project that five years from its enactment, the amended RTLA will usher in additional foreign investments worth P56 billion, ”Pascual said.

“By simplifying the requirements of foreign entry, the law allows our country to be more competitive, facilitate more foreign equity into the retail trade industry, and generate greater economic and employment benefits. Liberalizing retail trade does not only encourage more investors to the country, but it also helps create a more competitive environment, ”Pascual said.

Pascual expressed hope that retailers would take advantage of the amendments to RTLA.

“For our small retailers, don’t worry: there is a threshold for foreign entities’ paidup capital when they enter the Philippines. We hope that you will find promise in the amendments as we have. You can be potential suppliers to large companies entering the market, and more competition can let you have more sources of inputs – enabling you to take part in both forward and backward linkages. While we want the Philippines to be globally competitive, we want to do what we can to protect our small enterprises,”he said.