The government has tapped Chinese billionaire tycoon Jack Ma to help local micro, small and medium enterprises (MSMEs) to improve their access to technology to spur their development.
Finance Secretary Carlos Dominguez III and Ma recently discussed ways on how to empower in the Philippines through affordable electronic commerce innovations pioneered by the Chinese magnate in his multibillion-dollar Internet-based selling platform Alibaba.
In their meeting in Malacanang, Dominguez also thanked Ma for acting swiftly last March on the government’s request to take down advertisements of digitally-printed fake cigarette tax stamps in Ma’s Alibaba.com and AliExpress sites.
The request to take down the ads was in line with the campaign of the Department of Finance (DOF) to combat the proliferation of counterfeit cigarette tax stamps and illicitly traded tobacco products in the Philippine market.
Dominguez said he, along with several DOF and Bangko Sentral ng Pilipinas (BSP) officials, will meet with Ma again in China next year to hold more extensive discussions on how to ensure an “enabling” financial regulatory environment for e-commerce growth in the Philippines, with MSMEs as the primary beneficiaries.
“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). We’ll review the regulatory environment here so that we don’t have regulations that choke the growth of e-commerce,” Dominguez said.
The BSP, along with industry stakeholders, jointly launched the National Retail Payment System in December 2015 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–the Instapay, which caters to MSMEs, and PESO Net, which supports the bulk payment transactions of large companies.
“We must look at our (financial) regulations and ensure that it will not stymie the growth of our MSMEs,” Dominguez said.
Ma, who began his $23-billion business empire in his small apartment in Hangzhou, China, told Dominguez during their meeting that he wants to help develop the digital market in the Philippines to create a cashless society and connect the country’s e-commerce markets to other markets in Europe, China and other countries across the globe.
Ma said he wants to assist developing countries like the Philippines in building their digital technologies so that even small enterprises can benefit from globalization.
He also informed Dominguez that he intends to invest in the Philippines in the next five years, most likely in the country’s service industry. “The Philippines has the best service and has the heart to become key players in the industry,” Ma said.
Also in the meeting with Ma were DOF Undersecretary Antonette Tionko and BSP Deputy Governor Maria Almasara Cyd Tuaño Amador.
Dominguez said Ma also told him about his “3-1-0” initiative, in which budding entrepreneurs in China can borrow up to $5,000 online in a matter of minutes—three minutes to process the loan, one minute to get the money transferred to the borrower’s bank account, all done with zero human contact.
In terms of the loan-loss rate, Ma informed Dominguez that the online “3-1-0” program incurs a loss of only $4 out of $10 million as against $10 out of $100,000 for loans processed with human contact involved.
Dominguez said such e-commerce innovations pioneered by Ma, along with building a logistics backbone for MSMEs in the country, are now being explored by the DOF to help empower micro and small entrepreneurs and prepare then for the e-commerce revolution.
“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 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,” Dominguez said.
The ubiquitousness of mobile phones in the country appears to be a good start for Ma, as he believes that all you need is this device and an Internet connection to be able to buy and sell online.
He said during the meeting that “there are three things that young entrepreneurs need: Electricity, water and Internet.”
Ma’s online retail giant, Alibaba.com, has provided millions of small businesses an e-commerce gateway in which to sell their products across the globe.
Trade and Industry Secretary and Board of Investments (BOI) Chairman Ramon Lopez, meanwhile, said Association of Southeast Asian Nations (Asean) MSMEs play an important role in linking up with multinational enterprises (MNEs) and propelling economic growth of the regional block, .
Addressing participants of the 43rd Philippine Business Conference (PBC) of the Philippine Chamber of Commerce and Industry (PCCI) recently, Lopez said just like the Philippines, the Asean region is poised to grow from 4.5 percent in 2016 to 4.8 percent in 2017 with the Asean Economic Community (AEC) already in place. A major milestone in the regional economic integration is the AEC Blueprint 2015 which puts emphasis on including MSMEs in the global value chains of many large and multinational Asean companies.
“This shows that government and the private sector can work together in pursuit of shared goals of economic development. The Focused and Strategic (FAST) Action Agenda on Investment is one of the country’s key deliverables in our capacity as the Chairman of ASEAN this year,” Lopez said.
“To enhance its promotion and participation of MSMEs in the regional value setting, we are working towards greater trade facilitation, self-certification and creating an Asean and national single window to assist Asean trade transactions,” he added.
Putting the FAST Action Agenda into force and jumpstart the linkage, the DTI, through its industry development and investments promotion arm, the Board of Investments (BOI), conducted a Business Matching Activity as a sub-activity in PCCI’s PBC. Dubbed as “Linking Asean MSMEs with Asean and Global MNEs”, the activity served as venue for MSMEs to meet and discuss with big companies for possible supplier tie-ups. RIZA LOZADA