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    Viewpoint from the Philippines


    © International Trade Centre, International Trade Forum - Issue 1/2001

    Gerardo Anigan, Manager of the Policy Analysis and Advocacy Project of the Philippine Exporters Confederation (PHILEXPORT) and the United States Agency for International Development, provided participants with his perspective on e-commerce in the Philippines. Below are edited excerpts of his comments to some of the questions posed by conference moderator Peter Gallagher.

    Q. Where are there examples of real commercial benefit? Or is e-commerce - for developing countries, at least - an 'IOU' rather than a cheque?

    A. In our country of 7100 islands, with an average of 1 phone for 10 people and ever-busy telephone lines, using e-mail is convenient and cost-effective for business communications and electronic banking.

    Positive examples of e-commerce exist in the Philippines. Recent growth of our electronics exports is partly due to customs computerization, as it led to faster turnaround from raw materials imports to exports of finished products. There have been import purchases over the Internet, with deliveries by parcel. The Government's recently-launched small investors program, which allows the purchase of treasury bills in lots of P5000 (roughly US$ 130), would have been difficult to launch without computerized handling procedures. Computer communications have always been at the back-end of airline reservations, credit card authentication, and many supermarket operations. So e-commerce has been happening in this developing country, and I believe in most developing countries.

    Q. Is the 'e-commerce gap' a serious problem or will it prove to be trivial?

    A. For Philippine exporters, it will not be trivial. Customs operations and transactions with foreign buyers (the United States remains our biggest market) are increasingly conducted on-line. If an exporter is not using the Internet within a few years, (as was the case for fax), exporters will find that foreign buyers will conduct business transactions elsewhere.

    Q. What are your organization's experiences in e-commerce trade?

    A. PHILEXPORT has been involved to varying degrees in e-commerce initiatives. Examples are:

    Electronic Data Interchange (EDI) systems for textile quota information and customs operations. PHILEXPORT has subsidized design for an EDI network for the government organization that is responsible for garments and textile quotas, so that export documents can be done on-line. The system has been operating for over five years now. It seems to be self-supporting (we subsidized design and installation, including hardware). PHILEXPORT has also participated in testing for an EDI link to the Automated Customs Operations System in Metro Manila, which allows direct trader input through EDI systems for processing import/export documents.

    Company advertising on our Internet web site. Members can list their companies and products on an "electronic catalogue" page. Initially, the companies had to pre-pay the web site host and web site maintainer before their information was uploaded. Only 20 companies registered in the first year. Last year, we changed our approach: we listed all of our active members, and told them the information would be updated only upon payment. Now approximately 80 companies participate.

    Over 300 of our members have their own e-mail accounts by now, although most have not participated in the "electronic catalogue". I believe that this is because most small exporters are satisfied with a handful of regular buyers and do not feel the need for so much exposure, whether on a printed or electronic catalogue.

    Demonstration projects. SMEs have to "see to believe", as our web site experience showed us. Projects we support are:

    • Design and pilot-testing of the Philippine Article Numbering Council web site. It has the largest, most updated and reliable database of Philippine products, and their assigned barcodes. It allows stores to "align" their data - use the same barcodes for the same products - and for barcode owners to update their own company and product data. A search engine allows users to look for specific companies or products. The Council agreed to design the site to interface with other sites, particularly with the design of the product/company search facility, which can help find suppliers of particular products, or provides advance classification for tariffs, and other information. This will be even more useful as other barcoding councils around the world put up searchable databases on-line.

    • Preparation of a Y2K Readiness Toolkit for SMEs on CD-ROM with the Philippine Internet Commerce Society. The Y2K problem is a major dampener of interest in electronic commerce.

    • Testing for on-line transactions for the PHILEXPORT web site, working with the Electronic Commerce Promotion Council. This is still in an early stage. PHILEXPORT will be looking at the needs of exporter members by sector. Pilot project ideas include a project for food exporters to source raw materials from various parts of the archipelago, or a "virtual exhibit" for gift and housewares exporters which would allow interaction with foreign buyers.

    Q. What have been your constraints?

    A. From the exporter's viewpoint, the main issue to resolve is cost per transaction. Philippine banks are also on a wait-and-see mode regarding on-line transactions. According to a recent comment by the GartnerGroup in an electronic mailing list discussion of the Philippines Internet Commerce Society, banks in Southeast Asia are holding off rushing onto the Internet for several reasons:

    1. Lack of legal framework for electronic transactions.

    2. Lack of need. Why should banks take a risk with new technology and new forms of service when there is little competitive need. One bank put it bluntly when they stated that "an on-line banking service would not encourage existing clients to do more banking with us, nor would it attract new clients. With no competitive advantage, we cannot see the point in deploying the application".

    3. Lack of skills, both in management and information technology.

    4. Small(ish) Internet user base (estimated at 250,000), when compared to total banking population.

    The Philippine Internet Commerce Society and the Electronic Commerce Promotion Council have been working for the passage of an "Electronic Commerce Act" which, among other issues, provides legal recognition of electronic documents and signatures. The bill is currently being deliberated in the legislature, and expectations are that it will be signed into law later this year. Following its passage, PHILEXPORT expects to be involved in related information-education-communication activities and demonstration projects in electronic commerce.

    Other general issues affecting the spread of e-commerce concern telecommunications infrastructure (interconnection of telephone companies, universal service, convergence policy) and improving user confidence (fraud, security, training). Getting government to do on-line transactions with its public will help in addressing these areas.

    Contact Gerardo Anigan at granigan@skyinet.net