THE government’s move to shift its transactions and services to online will pay dividends for the Philippines, as it should improve the country’s ranking in competitiveness surveys next year, a financial technology firm said over the weekend.
Voyager Innovations Inc. and PayMaya Founder and CEO Orlando B. Vea said adopting digital payments in government systems is a “critical component” in simplifying procedures to start a business in the country. Such innovation, he added, can be used in many transactions, such as obtaining permits and paying taxes.
“Payments complete a cycle for setting up or doing a business in the country, especially when applying for permits or remitting taxes, which is why having digital payments acceptance in the online portals of government agencies plays an important role in simplifying and improving government processes for doing business in the country,” Vea said in a statement.
As such, Vea is confident the Philippines will see its ranking improve further in competitiveness surveys next year. He attributed his optimism to the growing number of national agencies and local government units partnering with PayMaya on digital payments.
These partners from the government include the Department of Trade and Industry, of Science and Technology, Bureau of Internal Revenue, Home Development Mutual Fund, Professional Regulation Commission, National Home Mortgage Finance Corp., Social Security System and the Philippine Statistics Authority.
The partnership with PayMaya enables these government agencies to accept digital payments for many of their transactions, allowing also the use of online payment solutions. On the other hand, the LGUs of Manila and Isabela are equipped by PayMaya to do cashless disbursements for their citizen beneficiaries.
The incorporation of digital payments in public transactions allows the government to expand its reach to the unbanked and underserved segments of the Philippines.
Backed by the Bangko Sentral ng Pilipinas and the Anti-Red Tape Authority (Arta), the adoption of digital payments is expected to make government services more accessible to the public.
Such regulatory regime gave Vea the confidence to predict that the Philippines can move past its Southeast Asian neighbors in the next edition of the World Bank’s survey on ease of doing business (EODB).
“We are encouraged by the progressiveness of the government agencies we have partnered with and are currently talking to because many of them are now open to improving their processes with the help of digital payments in order to deliver better public service to the Filipino people,” the PayMaya chief said.
In the World Bank’s Doing Business 2020 report, the Philippines jumped 29 notches to 95th in a recovery from two consecutive years of dropping double-digit places. In spite of the leap, the country was kept at seventh place among the 10 Southeast Asian economies assessed by the multilateral lender.
In the region, the Philippines trailed Singapore (second), Malaysia (12th), Thailand (21st), Brunei Darussalam (66th), Vietnam (70th) and Indonesia (73rd), and was only ahead of cellar dwellers Cambodia (144th), Lao PDR (154th) and Myanmar (165th).
Trade Secretary Ramon M. Lopez last Thursday vowed the government will implement reforms that will complement the passage of the EODB law and the creation of the Arta. He said among these reforms is the rollout of the Philippine Business Portal, the government’s one form, one number, end-to-end mobile registration for businesses.
Lopez’s objective is to bring the Philippines within the 70th to 79th range of the World Bank’s EODB survey by next year to have the country inch closer to its manufacturing competitors in the region, particularly Vietnam and Indonesia.
By indicator, the country landed 32nd in getting electricity; 65th in resolving insolvency; 72nd in protecting minority investors; 85th in dealing with construction permits; and 95th in paying taxes. However, Manila is lagging in trading across borders (113th); registering property (120th); getting credit (132nd); enforcing contracts (152nd); and starting a business (171st).
To rank high in the World Bank’s report on EODB is to improve profile to investors, as the yearly survey measures how friendly a country’s regulatory environment is to businesses.