philippines e-commerce roadmap 2015 - 2020 (june 8 draft)

Enabling Business, Empowering Consumers

1

Enabling Business, Empowering Consumers Confidential. For authorized use only.

E-Commerce Definition � Philippines E-Commerce Law – Republic Act 8792.

Passed June 2000. ¡  Any kind of data message and electronic document

used in the context of commercial and non-commercial activities to include domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information.

¡  Electronic transactions made through networking among banks, or linkages thereof with other entities or networks, and vice versa.

� E-Commerce Back-Office Operations Thrive (now referred to as Business Process Outsourcing)

2


The Philippines’ IT-BPM Industry by Sector

Sources: BPAP, ACPI, CCAP, GDAP, HIMOAP, PSIA

67.0%

18.6%

9.0%

Share of Total PH IT-BPM, 2012 100% = US$13.1 billion

Voice

KPO/Back Office

ITO

HIM

ESO

Animation

Game Dev

1.6% 1.0%

3.5%

0.4%


Philippine IT-BPO industry size 2006–2012; US$ billion

x% YoY Growth

1 Philippines IT-BPO market as percentage of global offshore services market, in revenue terms Sources: BPAP, ACPI, CCAP, GDAP, HIMOAP, PSIA

# FTEs (~‘000) 236 383 424 527

Global share1 5% 6% 6% 7% 8%

3.44.5

6.17.1

8.9

11.0

13.2

2006 2007 2008 2009 2010 2011 2012

34% 17%

25%

24%

FTEs Revenue (US$M)

Rev % inc.

fr ’11

Voice BPO 497,000 8,697 18%

Non-voice BPO/KPO

154,380 2,470 20%

ITO 57,078 1,160 17%

Health Info Mgt & Care

45,000 460 66%

Engineering Services

10,836 206 20%

Animation 9,000 132 3%

Game Development

3,500 50 251%

TOTAL FTEs 776,794 13,174 19%

19%

284 640

9.5%

777

Philippines 2012 Performance

31% 45%


Framework for the Promo.on of E-‐Commerce in the Philippines*

5 *E-Commerce Office-Department of Trade and Industry, Philippines

“Trust is central to any commercial

transaction”

I NF RA DE V E L OPMENT


Background � Last August 2014, Senator Bam Aquino at the

Senate Hearing on Trade about E-Commerce Concerns tasked the Department of Trade and Industry to develop an E-Commerce Roadmap to fulfill the implementation of the E-Commerce Law (Republic Act 8792).

� Meetings began last December 2014 and the DTI E-Commerce Office is currently working on completing this roadmap.

6


A Joint Project of

WITH THE SUPPORT OF

Philippines E-Commerce Index

Copyright 2014, I-Metrics Asia-Pacific Corporation. All rights reserved.


Chart 1: Extent of Online Engagement in the Manufacturing Industry Overall Index, Weighted to Actual Values


JAN 2015 – MAR 2015 AUG 2013 – MAR 2015


Chart 5: Extent of Online Engagement in the Manufacturing Industry Percentage of Revenues By Sector

Food & Beverage = 23%

Textiles = 39%

Paper = 8%

Publishing, Printing = 19%

Fuel, Chemicals, Pharmaceuticals = 24%

Rubber & Plastic = 19%

Non-Metal Construction Materials = 20%

Basic Metals = 23%

Fabricated Metal = 21%

Machinery & Equipment = 26%

Communication Equipment, Appliances = 40%

Motor & Transport Equipment = 32%

AUG 2013 – MAR 2015

Source: I-Metrics Asia-Pacific Corporation Survey, March 2015

Note: Percentage of revenues derived online are based on interviews with a sample of 174 supply chain executives of top manufacturing companies based in the Philippines drawn from a probability sample of 600

top manufacturing corporations representing the top manufacturing corporations in the Philippines.


Chart 9: Extent of Online Engagement in the Manufacturing Industry Percentage of Purchases By Sector

Average for Manufacturing Industry

Food & Beverage = 34%

Textiles = 36%

Paper = 11%

Publishing, Printing =40%

Fuel, Chemicals, Pharmaceuticals = 18%

Rubber & Plastic = 40%

Non-Metal Construction Materials = 30%

Basic Metals = 24%

Fabricated Metal = 28%

Machinery & Equipment = 40%

Communication Equipment, Appliances = 43%

Motor & Transport Equipment = 30%

AUG 2013 – MAR 2015


Note: Percentage of revenues derived online are based on interviews with a sample of 174 supply chain executives of top manufacturing companies based in the Philippines drawn from a probability sample of 600

top manufacturing corporations representing the top manufacturing corporations in the Philippines.


Chart 4: Extent of Online Banking in Manufacturing, Unweighted


JAN 2015 – MAR 2015 AUG 2013 – MAR 2015


Chart 1: Extent of Online Engagement in the Retail/Wholesale Industry Overall Index, Weighted to Actual Values


JAN 2015 – MAR 2015 AUG 2013 – MAR 2015


Retail = 14%

Wholesale = 28%

Chart 15: Extent of Online Engagement in the Retail/Wholesale Industry Percentage of Revenues By Sector

Average for Retail/Wholesale Industry

AUG 2013 – MAR 2015


Note: Percentage of revenues derived online are based on interviews with a sample of 94 supply chain executives of top Retail/Wholesale companies based in the Philippines drawn from a randomly selected

panel of 200 top retail/wholesale corporations.


Retail = 26%

Wholesale = 35%

Chart 19: Extent of Online Engagement in the Retail/Wholesale Industry Percentage of Purchases By Sector

Average for Retail/Wholesale Industry

AUG 2013 – MAR 2015


Note: Percentage of revenues derived online are based on interviews with a sample of 94 supply chain executives of top Retail/Wholesale companies based in the Philippines drawn from a randomly selected

panel of 200 top retail/wholesale corporations.



JAN 2015 – MAR 2015 AUG 2013 – MAR 2015

Chart 5: Extent of Online Banking in Retail/Wholesale (Unweighted)


Chart 1: Extent of Online Engagement in the Services Industry Overall Index, Weighted to Actual Values


JAN 2015 – MAR 2015 AUG 2013 – MAR 2015


Construction = 25%

Electricity, Gas, and Water = 3%

Hotels & Restaurants = 9%

Transportation = 31%

Postal, Media & Telecomm = 7%

Banking and Finance = 22%

Provident and Insurance Co’s = 5%

Real Estate = 6%

Miscellaneous Business Activities = 16%

Health and Social Work = 13%

Business & Knowledge Processing = 34%

Chart 5: Extent of Online Engagement in the Services Industry Percentage of Revenues By Sector

Average for Services Industry

AUG 2013 – MAR 2015


Note: Percentage of revenues derived online are based on interviews with a sample of 94 supply chain executives of top Services companies based in the Philippines drawn from a probability sample of 300 top

services corporations representing the top services corporations in the Philippines.


Chart 5: Extent of Online Engagement in the Services Industry Percentage of Purchases By Sector

Average for Services Industry

Construction = 25%

Electricity, Gas, and Water = 14%

Hotels & Restaurants = 43%

Transportation = 30%

Postal, Media & Telecomm = 8%

Banking and Finance = 22%

Provident and Insurance Co’s = 10%

Real Estate = 13%

Miscellaneous Business Activities = 21%

Health and Social Work = 3%

Business & Knowledge Processing = 33%

AUG 2013 – MAR 2015


Note: Percentage of revenues derived online are based on interviews with a sample of 94 supply chain executives of top Services companies based in the Philippines drawn from a probability sample of 300 top

services corporations representing the top services corporations in the Philippines.



JAN 2015 – MAR 2015 AUG 2013 – MAR 2015

Chart 5: Extent of Online Banking in Services, Unweighted


Chart 7: E-Commerce Engagement as a Percent of GDP (2014)

Ecommerce Intensity Index: Purchases of Top Corporations in Manufacturing, Retail/Wholesale, and Services Transacted Online as

a Percentage of GDP .

E-Commerce Intensity Index: Revenues of Top Corporations in Manufacturing, Retail/Wholesale, and Services Done

Online as a Percentage of GDP



Vision: E-Commerce as an Economic Growth Contributor & Philippines Competitive Advantage

E-BUSINESS TOP 50,000 COMPANIES

E-GOVERNMENT E-PAYMENT IMPLEMENTATION.

E-CITIZEN 50 MILLION DOING E-COMMERCE

INTERNET ACCESS AFFORDABLE HIGH SPEED INTERNET NATIONWIDE

LAW ENFORCEMENT PROSECUTION OF CYBERCRIMES.

Business Objectives & Success Criteria

Today…

25% GDP


Philippines ECommerce

Roadmap

Internet Access

E-Government

Education

Logistics

Consumer Protection

Law Enforcement

Tax system

Electronic Payment

E-Banking

Data Privacy

Information Security

Policies

Seal of Trust

Education

Sector development

Leadership


E-Commerce Supply Chain

UPSTREAM

•  Internet access

•  Logistics • E-Payment • E-Banking

INTERNAL VALUE CHAIN

• Consumer Protection

•  Law enforcement

• E-Government • Tax system

for e-commerce

• Data Privacy Commission

• Policy Creation

DOWNSTREAM

•  Seal of Trust • Education •  Sector

development • Private Sector

Leadership


Upstream

Internet Access

Cost

Accessibility

WIFI propagation

Partnership

Logistics

Presence

COD

Taxes

Customs Process

ONLINE STRATEGY


Internet Access

Ø  Internet access definitions and standards. Ø Broadband development and roll-out. Ø Update consumer protection guidelines for Value

Added Services covering Internet access. Ø Create policies with NTC to resolve pressing concerns

on the quality of Internet access. Ø Sit down with telcos to discuss this as an industry

matter.

25


Deliverable – Internet Access

NEED OUTPUT TARGET DATE PLAYERS

Lack of Internet infrastructure standards & master plan. Impacts quality performance and pricing competitiveness. Lack of players offering Internet services

Philippine Internet Broadband Masterplan (getting commitment from telcos on Internet roll-out) Updated Guidelines for Value Added Services to offer fast Internet service.

2015 NTC, Telcos, DTI, DOST, DOTC, Private Sector

26


Logistics

Ø Maximize the presence of PhilPost in reaching far-flung areas.

Ø Credible import providers for regulated / deregulated items.

Ø Familiarity on import / export rules and regulations.

27


Deliverable – Logistics


Lack of awareness on Customs taxes and duties causes confusion among SMEs buying and selling products online.

Transport Requirements, Accredited Suppliers, Customs Taxes & Duties Guide for Online Sellers, Importers, Exporters Implementation of National Single Window Project

2015 BOC, DTI, BIR, PhilPost, all concerned government agencies, Couriers, Private Sector

28


Deliverable – Logistics NEED OUTPUT TARGET DATE PLAYERS

Various import permit documents not yet automated for application / approval. Philippines not fully ready for cross-border e-commerce

Import permit application / approval across agencies to be fully implemented. Guidelines for cross-border accreditation of digital signatures, electronic communication & contracts.

2015 BOC, DTI, BIR, PhilPost, Couriers, Forwarder, Private Sector BOC, DTI, DA, DOH, NTC, DOF, BIR, government agencies, forwarders, courier, private sector

29


Upstream

E-Payment Regulation

Arbitration

E-Wallet

Merchant Protection

E-Banking Access

Security

Regulation

Services

ONLINE STRATEGY


E-Payment

Ø  Department of Trade and Industry asked to take lead in e-payment regulation.

Ø  Bangko Sentral ng Pilipinas to take lead in arbitration as its ecosystem includes banks, remittance companies, etc. Ø Use existing credit card dispute settlement process to

probe issues on merchant liabilities in e-commerce transactions.

Ø  Improve BSP Circular 649 on how E-Wallets are set-up. Especially with the increasing number of unregulated e-wallets.

Ø  Non-bank e-wallets to be regulated by Department of Trade and Industry.

31

INPUTS


Deliverable – E-Payment


Lack of e-payment & e-wallet monitoring authority for non-banks offering non-legal tender services (commodity) poses risks and problems to merchants & consumers.

E-Payment and E-Wallet Guidelines for Non-Banks (accreditation, monitoring, consumer protection)

2015 DTI, BIR, BSP, Private Sector

32


E-Banking

Ø Look into the the BSP National Retail Payment Switch project. Ø Have payment gateways connect to it to ensure

stability of players offering these services. Ø Encourage the use of escrow facilities. Ø Review of BSP E-Payment rules that regulates non-bank

offering same services. Ø BSP currently amending the Payment Systems Act.

33

INPUTS


Deliverable – E-Banking


Lack of E-Banking Services Standards hampers adoption of e-banking by all banks offering updated minimum services needed today including IBFT and Escrow.

E-Banking Services Standards (covering minimum e-ban king services, interconnection, and mandating all banks to implement e-banking)

2015 BSP, DTI, BAP, RBAP, Private Sector

34


INTERNAL

Consumer Protection E-Promotions

Advertising Claims

Web Presence Guide

Complaints Handling

Law Enforcement Complaints Handling

Cooperation

Public awareness

Public Attorneys

ONLINE STRATEGY


Consumer Protection

Ø DTI and NTC signed agreement to have clear delineation on handling consumer complaints.

Ø Law enforcement regularly issues advisory on warning the public in their online dealings.

36


Deliverable – Consumer Protection


Lack of online process for consumer complaints affects consumer confidence in doing e-commerce.

Merchant and Consumer Complaint Online Dispute Resolution Process.

2015 DTI, DOH, DA, ConsumerNet, Private Sector

37


Law Enforcement

Ø Communicate role of stakeholders: Ø PNP on building up the case. Ø NBI on forensics. Ø Telecommunication companies to keep evidence

in possession for 6 months. Ø  Enforce adherence to law.

38


Deliverable – Law Enforcement


Lack of online process for cybercrime reporting and legal assistance making it difficult for consumers to file reports and sustain their complaint.

Cybercrime Online Reporting and Legal Assistance Network

2015 PNP, NBI, DOJ, DOST-ICTO, DTI, BSP, Private Sector

39


INTERNAL

E-Government

E-Payment

Data Privacy

Transparency

Funding

Data Privacy

Commission

Complaint handling

Guidelines

Reporting of breaches, data privacy compromise

ONLINE STRATEGY


E-Government

Ø  Requiring all revenue-generating government agencies, GOCCs, and government schools to accept electronic payment. Ø Be key access point for e-signature implementation

with businesses and citizens. Ø Capitalize on COA issuance of electronic official receipt

guidelines to government agencies. Ø  DTI to push and monitor e-government projects for the full

implementation of the E-Commerce Law. Ø Assert DTI as in charge of pushing e-payment

implementation in government. Assert as in-charge in ensuring the roadmap is fulfilled.

Ø  Government to have integrated approach in using new technologies such as cloud services, etc, rather than fragmented.

41


Deliverable – E-Government


Lack of efficient e-government services to serve stakeholders making e-commerce redundant and tedious.

Government E-Payment Implementation Plan

2015 DBM, DTI, DOST ICTO, BSP, DOF, Bureau of Treasury, Congress, Private Sector

42


Data Privacy

Ø DTI can adopt data privacy policies under the E-Commerce Law – in conjunction with the Data Privacy Law. Ø This can include requirements on data encryption

and processing of personal information covering both government and private sector.

43


Deliverable – Data Privacy


Lack of Data Privacy Commission not giving an avenue for complaints to be filed in violation of the Data Privacy Law

Data Privacy Guidelines for the Government Data Privacy Guidelines for the Private Sector

2015 DTI, DBM, DOST-ICTO, DOF, Bureau of Treasury, BSP, COA, Private Sector DTI, Private Sector

44


INTERNAL

Tax System

Process consultation

Electronic Invoice & Official Receipt

Tax guidelines

Education

Policy Creation

Sales Promotion Guidelines

Online Advertising Claims

Product Safety Verification

E-Government Fund

ONLINE STRATEGY


Policy Creation

Ø  National ID System bill or a DTI issued policy for single ID for government e-commerce transactions in conjunction with digital certificate issuances. Ø Part of the “know your customer” step that can pave

way for more services to make e-commerce more convenient to consumers.

Ø  Identify government agency to release digital certificate that businesses and citizens can use in all transactions. BIR is currently the identified agency.

Ø  DTI pushing for the Consumer Act of the Philippines amendment.

Ø  Push for Supreme Court release of e-notary guidelines. Ø  Clarify that government agency charter laws need not be

amended to embrace e-commerce. (e.g. SEC)

46


Deliverable – Policy Creation


Lack of e-notary guidelines affecting implementation on e-commerce for transactions requiring notarization

Rules on E-Notary

2015 Supreme Court, Department of Justice, PNP, NBI, DOJ, DTI, BIR, BSP, SEC, DILG, Private Sector

47




Lack of digital certificate issuing authority to facilitate in identity verification.

Digital Certificate Adoption in the Private Sector (including cross-border)

2015 Supreme Court, Department of Justice, PNP, NBI, DOJ, DTI, BIR, BSP, SEC, DILG, Private Sector

48




Lack of easily accessible and usable invoicing and official receipt tools for use by freelancers, online direct sellers, and small e-commerce sites online.

Guidelines for Online Sales Invoice and Official Receipt Issuance

2015 BIR, SEC, DTI, Private Sector

49


DOWNSTREAM

Seal of Trust Accreditation Guidelines

Privacy Seals

Security Seals

Verified Seals

Education E-Learning Adoption

B.S. E-Commerce

Diploma E-Commerce

K-12

ONLINE STRATEGY


Seal of Trust

Ø  Incentivized trusted online stores. Ø Seal of Trust must be easy to acquire, maintain, and

have metrics to measure effectiveness. Ø Development of customer feedback system

administered by 3rd party. Ø Formation of awards recognizing reliability and

accomplishment of online businesses regardless of size.

51

INPUTS


Deliverable – Seal of Trust


Lack of seal providers to authenticate e-commerce sites offering products and services online

Accreditation for Data Privacy, Security, and Identity Verification Seal Issuers

2015 Philippine Accreditation Bureau, DTI, BIR, BSP, SEC, DILG, Private Sector

Lack of accredited digital signatures issuers for local Internet users.

Update Guidelines on accreditation of digital certificate issuers

2015 Philippine Accreditation Bureau, DTI, BIR, BSP, SEC, DILG, Private Sector

52


Deliverable – Education


Lack of e-commerce education curriculum to meet industry demand on e-commerce adoption.

B.S. E-Commerce offering in Colleges Diploma in E-Commerce offering in vocational schools E-Commerce Education in K-12

2015 DTI, CHED, TESDA, DepEd, Private Sector

53


DOWNSTREAM

Sector development

Manufacturing

Retail / Wholesale

Services

Start-up

Private Sector Leadership

Associations

RITECC

Consumer Groups

Online Communities

ONLINE STRATEGY


Sector development

Ø Establishment of an E-Commerce Office to monitor the sector.

Ø One stop shop for businesses for easy registration whether traditional or startups.

Ø Clarification on whether foreign retailers operating online stores be covered under Republic Act 8762 (covering issues such as pre-qualification).

Ø Encourage growth of Shared Services Facilities in places where Internet connection is intermittent.

Ø Creation of financial assistance or programs for start-ups and e-commerce projects.

55

INPUTS


Deliverable – Sector Development


Lack of programs to support businesses in adopting e-commerce.

Establishment of E-Commerce Office in DTI to develop programs, issue policies, resolve concerns, and monitor e-commerce in the Philippines One Stop Shop Business Center (Go Negosyo Act)

2015 DTI, DBM, Private Sector DTI, SEC, BIR, DILG, and related agencies.

56


Deliverable – Private Sector Leadership


Lack of organized multi-private sector participation to work with the government in developing and monitoring e-commerce growth in the country.

Establishment of E-Commerce Promotion Council comprised of the government and private sector whose tasked is to work on the various deliverables in this roadmap.

2015 DTI, DBM, BSP, DOF, Bureau of Treasury, BIR, COA, DOJ, PNP, NBI, Private Sector Associations, Online Communities

57


Risk Management

58


RISK MANAGEMENT RISK CONSEQUENCE MITIGATION CONTINGENCY ASSIGNED

Internet speed, cost, & access not improving.

Filipinos unable to do e-commerce.

Create Internet Roadmap with telcos

Work on how to encourage more players in the market.

NTC, DTI, private sector

Unregulated payment gateways, virtual currencies and electronic wallet close shop affecting consumers.

Filipinos merchants, consumers unable to get back their funds.

Create payment gateway, virtual currency, and e-wallet regulation for non-bank entities.

Use legal means to penalize and ensure consumers will get their money back.

DTI, BSP, law enforcement, private sector


RISK MANAGEMENT RISK CONSEQUENCE MITIGATION CONTINGENCY ASSIGNED

Consumer information privacy gets compromised

Pose damage, inconvenience to affected consumers.

Creation of Data Privacy Commission. DTI to release data privacy guidelines on e-commerce in government & private sector

Apply penalties and legal liabilities for violating Data Privacy, Cybercrime, E-Commerce Law.

DTI, law enforcement, private sector

Unsustained leadership in e-commerce implementation.

Roadmap does not get implemented. Benefits not realized.

Private-public sector partnership towards implementation of e-commerce. Congressional Oversight on E-Commerce to monitor roadmap.

Private sector leadership proceed with roadmap implementation and pushing government to adhere to its commitment.

Private sector groups. Government agencies. Congressional Oversight on E-Commerce Law


Roadmap completion timeframe � TWG sign-up / Public document creation for

input elicitation: ¡  Citizen / Business Stakeholders - May 18 and June 1 ¡  Government Stakeholders - May 25 and June 8

� Webinars for public consultation ¡  May 22, May 29, June 4, June 11

� Philippine E-Commerce Roadmap Presentation at E-Commerce Law anniversary on June 15.

�  Stakeholder commitment support gathering (June 16 to July 15)

�  Signing of Philippines E-Commerce Roadmap (tentatively set on July 20 or earlier)

61


For your inputs, contact � DTI E-Commerce Office

¡ [email protected] ¡  Call 02-9765703 ¡  Fax: 02-896-7889

62

philippines e-commerce roadmap 2015 - 2020 (june 8 draft)

Government & Nonprofit

authorized use

ecommerce roadmap

ecommerce concerns

ecommerce officedepartment

dti ecommerce office

bpm industry

business process outsourcing

philippines trust