Digital Boosters

Six key pieces of legislation are what it would take to help along the fast-tracked march to a digital economy, according to Neda experts

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AMENDING and passing six key pieces of legislation would boost the country’s digital economy, according to the National Economic and Development Authority (Neda), as the country’s digitization was forced to take the fast track by the Covid-19 pandemic.

In a recent presentation, the Trade, Services and Industry Staff (TSIS) Officer in Charge of the Neda, Bien A. Ganapin, said these measures are “urgently needed” to help the country better fare in the new and digital normal.

He listed them as the Public Service Act (PSA); Open Access in Data Transmission Act; E-Commerce Act of 2000; Internet Transactions Act; National Digital Careers Act of 2020; and the National Digital Transformation.

“[These are] among the policies that are urgently needed, at least what the Philippine Development Plan and Neda, including all other agencies, are trying to push forward,” Ganapin said in the Neda’s forum on the digital economy.

On Tuesday, the House of Representatives approved on third and final reading the proposed Internet Transactions Act (ITA).

Voting 232 affirmative and 6 negative with no abstention, lawmakers approved House Bill 7805 to curb the prevalence of online scams. The bill will now be transmitted to the Senate for its own deliberations.

House Committee on Trade and Industry Chairman Wes Gatchalian, sponsor of the bill, said HB 7805 will protect consumers and merchants engaged in Internet transactions by creating the Electronic Commerce Bureau.

In terms of the PSA, Ganapin said the amendments aim to focus on the definition of public utility to only three main industries: distribution of electricity, transmission of electricity, and water pipeline distribution system or sewerage pipeline system.

This will enable a higher foreign equity participation of over 40 percent in other key areas such as telecommunication and transportation services.

Level the playing field

For the Open Access in Data Transmission Act (HB 57), Ganapin said, this will level the playing field in the data transmission and telecommunications market.

The passage of the bill will strengthen the value chain linkages in the industry and services sectors and facilitate the realization of the full potential of e-commerce and digital trade.

The E-Commerce Act of 2000, meanwhile, needs to be revisited to make the law more comprehensive in its coverage of e-commerce transactions and the rights of consumers.

The law should be strengthened with the imposition of penalties on service providers and requiring them to put in place high-security measures against breaches on data processing and financial transactions.

The Internet Transactions Act (HB 6122), Ganapin said, will define the scope and coverage of Internet transactions, apart from the sale or exchange of digital products, and lays down the code of conduct and qualifications for businesses who wish to engage in e-commerce.

Rep. Gatchalian said the e-commerce bureau that ITA will create will be the “central authority” tasked to regulate online trade and shall act as a virtual one-stop shop for consumer complaints on Internet transactions.

The bill seeks to regulate all business-to-business and business-to-consumer commercial transactions conducted over the Internet, including those related to Internet retail, online travel, online media, ride-hailing services, and digital financial services.

“E-commerce will be the new normal, but unfortunately, regulations to protect consumers and businesses from unscrupulous individuals who take advantage of this borderless economy are inadequate,” he said.

According to Gatchalian, many are still able to hide behind computer screen names, operate fly-by-night online stores, sell fake items, and scam innocent consumers and merchants, saying “their actions impede the growth of the Internet economy because the trust in online transactions is eroded.”

The bill specifies obligations and liabilities for e-commerce platforms and online merchants, including the delivery of goods to consumers in the condition as required by the sales contract.

Moreover, the ITA expressly states that any agreement between buyer and seller is “valid only if, at the time of the conclusion of the contract, the consumer has knowledge of the specific condition of the goods and the consumer has expressly accepted this specific condition when concluding the contract.”

Under the bill, online e-commerce platforms such as Lazada, Shopee and Zalora shall share solidary liability with their own merchants if these platforms fail to exercise extraordinary diligence to prevent any loss or damage to the consumer; fail to publish the details of their merchants; fail to examine goods related to food, drugs, cosmetics, among others.

The measure also makes it illegal to cancel orders for food and/or grocery items made via ride-hailing services when the said items have already been paid by or are already in the possession of the ride-hailing service partner or in transit to the consumer.

To encourage businesses to go online and for foreign organizations to choose to register with the e-commerce bureau, the Department of Trade and Industry will be required to lead the establishment of an industry-led e-commerce Trustmark.

“We really need stricter rules to hold both e-commerce platforms and courier services accountable for damaged or lost goods purchased online. Doing so would drastically reduce the incidence of fraud and theft of goods while in transit to the consumer,” Gatchalian said.

Gig economy

Meanwhile, the National Digital Careers Act of 2020 (HB 6759/SB 1469) seeks to establish a legal framework for the “gig economy” that will map out strategies to promote and strengthen digital careers, as well as provide the needed institutional support.

Ganapin said the bill aims to recognize the emergence of new forms of employment, such as work on digital platforms, and requires the government to extend the social protection system appropriate to this new mode of work, especially in times of economic downturns caused by calamities and public emergencies.

Lastly, Ganapin said the policy on the National Digital Transformation aims to introduce structural reforms to cut across multiple sectors to allow a shift to digital modes of conducting work and life.

This will require enhancing the foundation of the digital economy through greater investment in ICT infrastructure, connectivity, and setting up a sound regulatory environment that promotes digital adoption.

“The society and economy needs to adjust to the new normal and to veer away from the long-held manual practices of both the public and the private sectors,” Ganapin said during the forum.

In the new normal, Ganapin said, digital technologies can facilitate social distancing, support business continuity, and prevent service interruptions.

Digital technologies can also increase productivity of businesses, opportunities for people, and the efficiency of government. These are made possible through e-commerce platforms; digital payment solutions; remote learning and working; and digital information sharing.

Slow adoption

The one big problem hounding the march to digitalization, despite the unscheduled push provided by the pandemic and its lockdowns—with resulting restrictions on mobility and cash and face-to-face transactions—is this fact: digital adoption in the Philippines remains low, mainly due to slow Internet speeds, high Internet costs and low broadband penetration.

A study by the Neda and the World Bank showed that 63.7 percent of communities interviewed did not have telecommunication towers in their areas and 70.2 percent of interviewed barangays do not have fiber-optic cables installed in their communities.

The findings also showed that majority or 87.8 percent of interviewed barangays do not have free Wi-Fi and the absence of this free service is evident across all regions.

With a report by Jovee Marie N. Dela Cruz

Image credits: Gougnaf16 |, Başak Kabadayi |


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