Top-down initiatives are being introduced in the Philippines to develop the country’s startup sector. Earlier this week, President Rodrigo Duterte was said to be signing the Innovative Startup Act, which once enacted into law will provide a great boost to tech firms in terms of funding, relaxation of immigration procedures, as well as networking opportunities.
Also in the same week, the Central Bank of the Philippines introduced a draft outlining the rules of the National Payment Systems Act (NPSA), the country’s first legal framework to regulate payment systems.
The NPSA has the objectives of maintaining a safe, efficient, and reliable payment system, as well as providing a conducive environment for sustainable growth of the economy by making it easier to do business and lowering transaction costs.
The new digital payment rules will make it easier for banks and non-financial institutions such as merchants to register as electronic payment operators. In particular, e-commerce will be given a vital boost.
The e-commerce sector in the Philippines stands at only 1.5% of the retail market, according to Dino Araneta, founder and CEO of digital logistics company QuadX. However, it is projected to grow annually at an average rate of 12% between 2018 and 2022. With that said, a slow internet speed and low digital payment penetration are hindering the sector from achieving its full potential. In particular, the most preferred method of payment in the country remains to be cash on delivery. The NPSA is designed to address this particular problem, with the hope that it will foster a thriving e-commerce sector.