e-Commerce Philippines 2022 Roadmap

Table of Contents
5“Basta e-Commerce, madali”

38

II: About this Roadmap

102022: 20 Strategies 22 Agenda for 2022

38

The Need for an Updated Roadmap

11

I: Understanding e-Commerce in thePhilippines

39

Crafting the Roadmap

42

Alignment with the National & Global Development Agenda

43

COVID-19 ROADMAP CHECKPOINT

11

The Basics

11

e-Commerce Defined17

Evolution of e-Commerce

18

46

Key informant Interviews of Digital Platforms

47

III: MADALI 2022

Economics of e-Commerce

47

Our Shared Vision and Pillars

20

e-Commerce Architecture48

Vision, Mission, Strategic Objectives

21

The e-Commerce Ecosystem

49

The e-Commerce Philippines 2022 narrative

27

Philippine e-Commerce in Numbers

50

22 Action Agenda

57

Promoting an all e-Government Approach

58

Special Note on the Joint Strategy for B2B and B2C

29
30

UNCTAD Business to Consumer Index 2020
Environment of the Roadmap

30

National and Global Environment

32

Global e-Commerce

33

e-Commerce in the COVID-19 pandemic

34

e-Commerce Situationer

37

Opportunities for Value Creation

e-Commerce
59

Digital Payments and Logistics Services: Twin Catalysts
for e-Commerce Growth in the Philippines

59

Digital Payments

62

Logistics

64

Outcomes and Measures of Success65

Our Mapped Future

68

Conclusion and Call to Action

69

Acknowledgment and Roadmap Team

E-COMMERCE PHILIPPINES 2022 ROADMAP

70
75
75

PHOTO BOOK
IV: ANNEX

Figure 19. Latest World Economic Outlook Growth Projections

31

Figure 20. Historical Gross Domestic Product of thePhilippines

e-Commerce 2022 Initiatives and Subtasks

77

Review of e-Commerce Roadmap 2016-2020

81

Parameters for Forecasts and Targets

84

Impact of the e-Commerce Roadmap, andFeedback Effect

85

30

32

Figure 21. Southeast Asian Internet Economy, GMV (US$_B)

35

Figure 22. Modified Structure Conduct Performance(S-C-P) Industry Analysis Framework

37

Figure 23. Opportunities for Value Creation

40

Figure 24. e-Commerce Roadmap: The Process

41

Figure 25. e-Commerce FGD Discussion, Brown Bag
Brigade Sessions, Viber community

42

Figure 26. Alignment with the National and Global
Development Agenda

References

LIST OF FIGURES AND TABLES

44

Figure 27. MSME Levels of Digitalization, ASEAN Study

45

Figure 28. MSME Levels of Digitalization, Philippine Study
commissioned by DTI

47

Figure 29. Pillars of Philippine e-Commerce Roadmap

6

Figure 1. e-Commerce in the Philippines: Lay of the Land48

Figure 30. e-Commerce Strategy Map

8

Figure 2. e-Commerce Philippines Strategy Map

49

Figure 31. e-Commerce Narrative

9

Figure 3. Narrative of the e-Commerce Philippines Roadmap 2022

57

Figure 32. Philippine Government Network

12

Figure 4. e-Commerce Types

65

Figure 33. e-Commerce Gross Value Forecasts vs. GDP

13

Figure 5. e-Commerce various definitions and scopes

66

Figure 34. Gross Value of e-Commerce Forecasts and Targets

14

Figure 6. Digital Economy Coverage, Bureau of
Economic Analysis

7

Table 1. e-Commerce Situationer, Challenges, and Opportunities

Figure 7. Conceptual Framework for the Digital

16

Table 2. Share to Gross Domestic Product: Various Estimates

Economy Proposed for Digital Supply-Use Tables

18

Table 3 Economics of e-Commerce

17

Figure 8. Evolution of commerce to e-Commerce

29

Table 4. UNCTAD B2C Index 2020: PHL vs. ASEAN

19

Figure 9. Lowering Barriers for MSMEs Offline Seller vs.

33

Table 5. e-Commerce in the COVID-19 Pandemic

15

Online Seller

36

Table 6. e-Commerce Challenges and Opportunities

20

Figure 10. Defining the Players in the Ecosystem

38

Table 7. Assessment Report Card of PECR 1 2016 -2020

21

Figure 11. Basic e-Commerce Ecosystem

50

Table 8-22. 22 Action Agendas

22

Figure 12. Platforms Ecosystem

58

Table 23. e-Commerce Sales based on UNCTAD Report 201823

Figure 13. Digital payments ecosystem

60

Table 24. Segment-specific challenges for digital payments

24

Figure 14. Players in the Philippine digital payments ecosystem

25

Figure 15. Logistics Ecosystem

62

Table 25. The e-Commerce Philippines 2022 Roadmap focus

26

Figure 16. Government e-Commerce ecosystem

64

Table 26. Table of Outcomes and Measures of Success27

Figure 17. Philippine e-Commerce in Numbers

67

Table 27. Gross Value of e-Commerce Forecasts and Targets

28

Figure 18. Philippines GMV (US $_B) per sector

adoption and use in e-Commerce(in Php B, in US$, and as % of GDP)

E-COMMERCE PHILIPPINES 2022 ROADMAPFOREWORD

BASTA E-COMMERCE MADALI(Market Access, DigitAlization, and Logistics Integration)
By DTI Secretary Ramon Lopez

As the Philippine e-Commerce Roadmap 2016-2020 ended
in 2020, it is timely and significant that we update theRoadmap at a time when we see e-Commerce as the nexusof a country’s economy.
Market Access: Whether cross border e-Commerce transactions
or easy onboarding by MSMEs to marketplace platforms, theplan calls for ease of doing online business. Covering businessto consumer (B2C), business to business (B2B), and businessto government (B2G), there is a need for greater electronictransactions.

With the global pandemic that started in 2019, there was agreater appreciation of the digital economy. Our country saw
the accelerated adoption of online commerce and the general
acceptance of the need for digital transformation of businesses, ofgovernment, and of the citizenry.
Through the e-Commerce Philippines 2022 Roadmap, we canprovide our citizenry a clear pathway on how our country can
maximize the opportunity of e-Commerce. We can also harness
the fast-growing e-Commerce in the country to boost our
economic growth. Because of the lockdowns, we’ve already seen
how e-Commerce has come to our rescue and proved ready tofill the void left by brick-and-mortar businesses that were unable
to sufficiently serve our people. Online retail, delivery services,
online entertainment, digital services, telehealth, work-from-homearrangements, and digital payments—all of these have helped us
during the time of the pandemic and continue to do so until now.

DigitAlization: The Roadmap highlights the difference
between digitization and digitalization by focusing on the digitaltransformation of enterprises—whether micro, small, medium,or large—and the digitalization of government, as well as thepromotion of digital payments.
Logistics Integration: Without efficient logistics, a robuste-Commerce will not be achieved. Our endgame is to reduce
logistics cost and improve radically improve our logistics
performance.

Thus, our message is simple and clear: “Basta e-Commerce,
MADALI.”

Our strategic framework is simple and can be summarized in abasic formula for success:At the very heart of a robust e-Commerce is a system that is easy,
convenient, and fast. Madali para sa negosyo, madali para sa mga
mamimili.

Speed + Security + Structure = Sales
The strategies and action plans of the e-Commerce Philippines
2022 Roadmap aim to achieve our country’s goals for more jobs,
more businesses, and more empowered consumers. Our target
is to see an increase in the contribution of e-Commerce to thePhilippine economy.

The MADALI message also reminds us of our priorities: Market
Access, DigitAlization, and Logistics Integration.

E-COMMERCE PHILIPPINES 2022 ROADMAP

1FOREWORD“At the very heart of a robust e-Commerce
is a system that is easy, convenient, andfast. Madali para sa negosyo, madali parasa mga mamimili.”
Although we are mindful of our major challenge—the need to“build trust in e-Commerce”—we are confident that a strong publicprivate sector collaboration, which led to this Roadmap, will help
address these “trust issues.” This is a concern that has been heavily
emphasized throughout the roadmap crafting process.
Thus, the e-Commerce Philippines 2022 Roadmap has determined
the importance of communication, policy making, redress
mechanisms, and developmental interventions needed. We havecommitted to an “all of e-government approach” where government
agencies are seen to be responsive to the times by becoming moredigitally-enabled to deliver efficient and effective public service, as
well as keeping up with the rising expectations of the citizenry.
The e-Commerce Philippines 2022 Roadmap is short-term because
this complements the very nature of e-Commerce, one that is fast
and agile, and with a short and swift technology lifecycle. However,we set for ourselves “Big, Hairy, Audacious Goals” (BHAGs), as theycall it, which serve as immediate and short-term strategies designedwith a long-term horizon. Our goal is that through this Roadmap,
the actions we take in the next two years will bear fruit in the years
to come, especially in a post-pandemic future.
In rebuilding the post-pandemic economy, e-Commerce will be at
the forefront, providing our consumers with convenient ways tomake transactions while providing our Micro, Small, and Medium
Enterprises (MSMEs) with opportunities for growth and innovation.
All in all, this Roadmap provides not only a general plan, but
concrete and comprehensive strategies to help us shape thefuture of Philippine e-Commerce because we see a future where
e-Commerce will become easy commerce and commerce will be
indistinguishable from e-Commerce.

E-COMMERCE PHILIPPINES 2022 ROADMAP

2

EASY NOTESe-Commerce Philippines
2022 Roadmap: In a Nutshell1.

e-Commerce starts with the selling of goods over the internet. Moreover, it isabout building and using the power of NETWORKS, through technology andthe internet.

2.

The Philippine economy and the Filipinos are geared for economic global
leadership, especially in e-Commerce, due to our large, young, and still
growing population that are technology-savvy and use the internet theheaviest.

3.

Desires and needs of businesses in the Philippines:
In general: Access to finance (especially supply chain finance), value chain/supply chain technology and infrastructure, and facilitation on access to markets
e-Commerce: Detailed checklist on how to start and operate an online
business, financial support for technologies, faster and more affordable
internet speed, and online government service.

4.

We have only just begun. The regions are on a growth momentum despite
many challenges. COVID-19 disrupted traditional business models andrearranged economic structures, forcing faster and bigger adoption of
e-Commerce. Emerging e-Commerce businesses were also accelerated during
the pandemic, such as Edtech and Healthtech, and they are expected tocontinue growing post-pandemic.

5.

In the future, everything is e-Commerce. e-Commerce should be easycommerce, or MADALI which stands for Market Access DigitAlization, andLogistics Integration. With all the available resources, partners, enablers, andgovernment efforts, the required transformation is “MADALI”. With strategies
and agenda, under the pillars of SPEED, SECURITY, and STRUCTURE, SALES
should be MADALI.

“Basta e-Commerce, MADALI.”

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EXECUTIVE SUMMARY

Executive Summary
Where Everything Should Be Fast,
Convenient, and Simple, or MADALITHE FOCUS
To grow e-Commerce and make it easy, we as a nation must
employ strategies anchored on speed, security, and structure,so that the entire experience of e-Commerce is fast (fromaccessing the internet to delivery of goods and services); thatthe transactions are secure, safe, and built on trust between
buyers and sellers; that our government can support all ofthese because it is future-ready with an engaged private sector
thriving in the digital landscape, powered by people highly skilled
as required by the Industry 4.0. All the said strategies should
result in soaring sales performance that must benefit our Filipino
businesses and the country in general.

Filipinos have already embraced e-Commerce as part of their lives.
Despite the challenges we face in infrastructure and adoption, we
still have actively participated in the growth and evolution of thetechnology, its platforms, and economy. However, we have yet to
unlock our full potential, our abilities, talents, and imaginations.
We are primed for an e-Commerce revolution. The Philippines has
always boasted of a large, young, and growing population as thedriving force of its economic growth and resilience. Our people
have been our number one resource and are also proving to bevaluable in the global economic landscape in the decades to come.
With our human resources, combined with the fast evolutionof technology and the internet, we have set our eyes on futureproofing our economy by enabling ourselves to be ready toparticipate in e-Commerce more actively. With the establishment of
the Department of Information and Communications Technology(DICT), the dynamics of the Banko Sentral ng Pilipinas (BSP), thee-Commerce and logistics policies prioritized by the Department ofTrade and Industry (DTI), and the cooperation of other government
agencies and stakeholders, the Philippines is gearing up to go fully
online, embracing e-Commerce as a core part of our everyday lives.

THE END IN VIEW
This roadmap boldly claims that our vision of e-Commerce in thePhilippines will become synonymous with easy commerce. By
preparing our infrastructure, institutions, systems, and people tofully embrace an economy that operates in the digital universe,
we will be able to see the growth of the e-Commerce sector
measured in increased adoption of e-Commerce. More buyers
mean more sellers.

THE KEY MESSAGE
The battle cry, “Basta e-Commerce, MADALI”, reinforces thefact that online commerce is indeed easy, as it is fast. There isalso a special meaning to MADALI to highlight the roadmap’s
focus on Market Access, DigitAlization, and Logistics Integration.
Here, market access refers to expanding domestic or crossborder transactions, and where digitalization is emphasized vsdigitization – to cover digitalization of government, businesses,
people – and logistics integration means making the logistics andsupply chain more efficient.

The pandemic has only sped up the process for us and thegovernment, through the DTI, has plotted out our path and ourroadmap to fully embrace e-Commerce. This document lays down
the framework and building blocks for this future to happen. We
have summarized the roadmap in one Filipino word, “madali”. The
word has three meanings that capture the vision of Filipinos about
our e-Commerce: easy, simple, and fast.

E-COMMERCE PHILIPPINES 2022 ROADMAP

4

BASTA E-COMMERCE, MADALI“Basta e-Commerce, madali”
Our battle cry. Our commitment foreverything to become easy.
OVERALL ORGANIZATION OF THE ROADMAPThe root word of madali, is “dali” which has three meanings inFilipino. The first meaning is “fast”, as in “magmadali” or “go fast.” Thesecond meaning is “easy”, as in “uncomplicated.” The third meaningof “dali” is inch or finger, which not many people are aware of, likely
because it is rarely used. According to diksiyonaryo.ph, “dali” also
connotes:

The e-Commerce Philippines 2022 Roadmap is designed as an easy
read. It provides a simple narrative that contains an assessment of
where we are, where we want to go (goals and objectives), and how
to get there (strategies and measures of success). This updated
report will be divided into four major parts:

súkat ng habà mulang dulo hanggang unang buko ng
hinlalakí ng kamay : FINGER, INCH, PULGÁDA

Part 1: Understanding e-Commerce in the Philippines which
includes a situationer, definition, and ecosystemdaliri.

Part 2: Roadmap journey which tackles how the roadmap wasformulated, and the engagement of the private sector. It shall
include summaries of complementary studies i.e. digitalization of
MSMEs and key informant interviews among digital platformers,
which were conducted during the time of the pandemic.

Moreover, the Latin for finger is “digitus,” which is the root wordof “digital”. The relationships and roots of all of these words lendthemselves to what this roadmap aims to achieve: ease, simplicity,and speed, or the “dali” of conducting commerce in the digitalworld, with just a tap of a finger using smart devices.

Part 3: Vision, mission, and strategy map, including metrics, which
outlines the overall goals, the measures of success, and the action
agenda that will be pursued. Discussion on digital payments andlogistics is also included.

The bold aim of this roadmap is to make e-Commerce synonymouswith easy commerce, as easy as pointing the finger towards a
direction, as tapping the fingers on the keyboard, as clicking themouse, or as pressing a button. It’s the internet and e-Commerce at
our fingertips. By laying out the framework and strategic directionin this roadmap, we hope to cure the impression that doing
e-Commerce in the Philippines is slow, unsecure, and complicated.
With the strategies and concrete steps that this map is plottingout, we want to put the Filipinos at ease when it comes to doing
e-Commerce. If accomplished, the concrete steps outlined in thisroadmap will gain the trust and confidence of the Filipinos in our
e-Commerce infrastructure and internet capabilities.

E-COMMERCE PHILIPPINES 2022 ROADMAPPart 4 Presentation of results of the previous roadmap(Philippine e-Commerce Roadmap 2016-2020), and explanationof roadmap targets.

5

BASTA E-COMMERCE, MADALI*as of January 2021
Figure 1 e-Commerce in the Philippines: Lay of the Land

E-COMMERCE PHILIPPINES 2022 ROADMAP

6

BASTA E-COMMERCE, MADALI

Table 1. e-Commerce Situationer, Challenges & Opportunities

E-COMMERCE PHILIPPINES 2022 ROADMAP

7

BASTA E-COMMERCE, MADALIe-Commercee-Commercefor e-Commercee-Commercee-Commerce growth
unified e-Commercee-Commerce

Availability of e-Commercee-Commerce

to fund e-Commerce initiatives

For the Filipino, e-Commerce and commerce are indistinguishable.

Figure 2. e-Commerce Philippines 2022 Strategy Map

E-COMMERCE PHILIPPINES 2022 ROADMAP

8

BASTA E-COMMERCE, MADALI

Figure 3. Narrative of the e-Commerce Philippines 2022 Roadmap

E-COMMERCE PHILIPPINES 2022 ROADMAP

9

2022: 20 STRATEGIES 22 AGENDA FOR 2022

2022: 20 Strategies 22 Agenda for 2022
20 Strategies

The 22 Agenda for 2022

1.

Increase e-Commerce contribution to the economy

1.

Accelerate the implementation of the National Broadband Plan

2.

Make available a talent pool of digitally skilled workers

2.

Increase secure internet servers

3.

Increase the number of e-Commerce enterprises (i.e platforms,
e-retailers or online merchants)

3.

Develop an e-Commerce logistics infrastructure and investment
convergence program

4.

Empower online consumers

4.

5.

Accelerate government efforts in creating a secure, reliable,
efficient, and affordable network of ICT services

Modernize and transform the Philippine Postal Corporation into acompetent partner and major player in the logistics sector

5.

6.

Initiate an e-Commerce logistics infrastructure and investment
convergence program

Promote streamlining and automation in government and a pleasantuser experience on online public services

6.

Fast-track the implementation of the Philippine Identification System

7.

Speed up e-Government initiatives across the e-Commerce
ecosystem

7.

Update Customs policies and procedures to cover and facilitate
e-Commerce transactions

8.

Pursue a future-ready, inclusive, and enabling regulatoryenvironment

8.

Push for the adoption and implementation of the Internet Transactions Act

9.

Identify and address regulatory bottlenecks that impede e-Commerce growth

Promote cashless transactions and increase uptake of digital
payments

10. Create an enabling environment for the Gig Economy

9.

11. Implement the Digital Payments Transformation Roadmap 2020-2023 of
the BSP

10. Fast-track the resolution of complaints and actions against
e-Commerce fraud and IP/data privacy violations

12. Implement TRAIN 1 provisions on e-invoicing

11. Scale up the digital transformation of micro, small and medium
enterprises (MSMEs)

13. Automate systems to make the resolution of consumer complaints more
efficient and develop online dispute resolution system

12. Support funding for e-Commerce innovation and technology
investments

14. Implement a cohesive MSME digitalization program across various
government agencies

13. Increase B2B e-Commerce transactions

15. Spur investments in innovation by providing support to Filipino
enterprises creating digital goods and services. “Tayaan ang Pilipino!”

14. Advance cooperation on cross-border digital trade
15. Upskill and reskill Philippine talent to support e-Commerce
growth

16. Promote the exchange of goods and services between companies either
through a direct or marketplace model and increase adoption of cashlesstransactions

16. Undertake a massive communication campaign across businessand market segments under a unified e-Commerce narrative

17. Enhance cross border cooperation and market access through trading
agreements and economic cooperation programs with trading partners

17. Pursue an advanced knowledge management system that is
responsive to government and business needs

18. Develop a cadre of digitally skilled workers to support the growing
e-Commerce sector

18. Institutionalize public-private sector partnership to boost
e-Commerce growth

19. Develop and implement the “Basta e-Commerce, MADALI!”
Communication Plan

19. Form a strong e-Commerce bureau that will champion the wholeof government approach

20. Create the e-Commerce Bureau and support with resources and capacity
building

20. Provide budgetary support to fund e-Commerce initiatives

21. Create the e-Commerce Promotion Council comprised of stakeholders
from both the public and private sector
22. Modernize and remodel the system of generating e-Commerce-related
statistics and studies to be responsive to the needs of the stakeholders

E-COMMERCE PHILIPPINES 2022 ROADMAP

10PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINESThe Basics
e-Commerce defined
Originally, OECD defined e-Commerce as:

e-Commerce, simply defined, is commerce conducted throughelectronic means. However, throughout the decades, the way
we define, appreciate, and use the word “electronic” has evolved
heavily due to technological advancements. Consequently, different
definitions, measures, and scopes of “e-Commerce” have emerged.
Various definitions of e-Commerce are recognized by different
organizations, but for this roadmap, the Philippine Statistics
Authority (PSA) definition, adopted from the Organisation for
Economic Co-operation and Development (OECD), is used:“...the sale or purchase of goods orservices, conducted over computer
networks by methods specificallydesigned for the purpose of receiving
or placing of orders.”“The sale of purchase of goods
and services, whether between
businesses, households, individuals,
governments, and other public or
private organizations, conducted overcomputer-mediated networks. The
goods and services are ordered overthose networks, but the payment andthe ultimate delivery of the good orservice may be conducted on or offline.”

E-COMMERCE PHILIPPINES 2022 ROADMAPThis PSA’s definition is likewise consistent with the broader definitionof the World Trade Organization (WTO):“...the production, distribution, marketing,sale, or delivery of goods and services byelectronic means.”
Implicit in numerous descriptions of e-Commerce is the importanceof network and interconnectivity. As an enabler, it encompasses,
affects, and is affected by a multiplicity of industries, forming an
ecosystem within which these interact.

11

PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce: Typee-Commerce Types

Figure 4. e-Commerce Types

E-COMMERCE PHILIPPINES 2022 ROADMAP

12PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce: Various Definitions/Scopes
Broadest Definition of e-Commerce: Trade in Goods and Services by UNCTAD, PSA

Figure 5. e-Commerce various definitions and scopes
Using the definition of Euromonitor, Google, and Statista, this figure depicts how extensive e-Commerce is. E-Commerce does not only pertain to
the purchase of physical goods itself but also to the process involved until the purchased goods or service is delivered or availed by the consumer.
Through the use of digital media or online media a consumer can choose an electronic service that he/she prefers. It can be food or groceries,
transportation service or ride-hailing service, financial services, online dating, booking and purchasing of event tickets, downloading of software
applications, and online subscription to academic services (e.g. e-library, online tutor, etc.), entertainment services (e.g. games, gambling, online
streaming, etc.). With e-Commerce, B2G (Business to Government) and G2B (Government to Business) could refer to services such as e-bidding,e-auctions, e-procurement, and other electronic services.

E-COMMERCE PHILIPPINES 2022 ROADMAP

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINESUS Bureau of Economic Analysis
Digital Economy

Figure 6. Digital Economy Coverage, Bureau of Economic Analysis

According to the US Bureau of Economic Analysis, the digital economy includes three major types of goods and services. These are e-Commerce,
digital media, and infrastructure. Digital media acts as a bridge of e-Commerce. Through digital media, we will be able to access a wide range ofelectronic goods and services. Without proper infrastructure, the digital economy will not prosper since this serves as a gateway to digital media.

E-COMMERCE PHILIPPINES 2022 ROADMAP

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Conceptual Framework for the Digital Economy
Proposed for Digital Supply-Use Tables

Source: A Roadmap toward a Common Framework for Measuring the Digital Economy, OECD (2020)

Figure 7. Conceptual Framework for the Digital Economy Proposed for Digital Supply-Use Tables

E-COMMERCE PHILIPPINES 2022 ROADMAP

15

PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Share to GDP: Various Estimates
Notes

2020

Forecast

Google$7.5B (2.1% of GDP) =Internet Economy

2025:
$28B
(4.9% of GDP)

Measure: Gross Value
B2C: Limited to retail e-CommercemarketStatista$3.42B (0.96% of GDP)

$12B
(2.1% of GDP)

Measure: Gross Value. Limited toretail e-Commerce market
B2C: Limited to retail e-CommercemarketPSA

2017: $1.5B(0.48% of GDP)

B2C: All goods and services but limited
estimates only

Euromonitor

2019: $5.35B(1.4% of GDP)

B2C: Retail e-Commerce

Worldbank2018: $6.75B(2.04% of GDP)* ecommerce without infra(Total for Digital Philippines= 10.1% of GDP)DTI Estimate(preliminary)$12B (3.4% of GDP)

Measure: Gross Value Added,
patterned after US Bureau of
Economic Analysis; includes
infrastructure (79.8% of total
ecommerce GVA)
Various scenarios

Added estimates for- Health, More Food and Alcoholic
Beverages, Real Estate, Furnishings,
Education

Table 2. Share to Gross Domestic Product: Various Estimates

E-COMMERCE PHILIPPINES 2022 ROADMAP

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Evolution of Commerce to e-Commerce
Commerce has evolved for many centuries,
transforming into the e-Commerce that
we know now. From having a physicalmarketplace, transactions are now
conducted remotely through telephones
and mail order, using the power oftechnology and the internet. This makes
e-Commerce substantially faster andcheaper than traditional economictransactions.
In Southeast Asia the rise of start-ups
has been observed in recent years as thetechnology sector is experiencing a boom.
The immense growth of the digital economy
has given rise to six unicorns—companies
with valuations exceeding 1 billion US
dollars. As of 2020, there are around 22,667
startups in the Southeast Asian region, of
which 1,966 are based in the Philippines.

Transactions conducted
REMOTELY but throughnon-internet technology(Telephone and Mail Order)
PHYSICAL
Marketplace

Figure 8. Evolution of commerce to e-Commerce

Why e-Commerce?
e-Commerce offers the power of interconnectivity and technology allowing
businesses to thrive and partake of opportunities to elevate our quality of life.
Some of the major contributions of e-Commerce to society include: ease ofcompleting business transactions, an interconnected network of consumers andmerchants; bridging the gap between job seekers and employers.
On a macro scale, e-Commerce has significant contributions to a country’s
economic growth as an increase in customer base leads to increased demandand production. This therefore generates greater revenues for organizations andcontributes to the increase of the national income. e-Commerce also addresses
supply chain gaps by bridging manufacturers, distributors, and sellers to any partof the country as well as globally.
e-Commerce has significant contributions to the nation as it addresses regional
imbalances and gaps, allowing micro-enterprises to participate in the digital
economy despite being in far-flung and underdeveloped areas of the country.

E-COMMERCE PHILIPPINES 2022 ROADMAP

Commerce through
INTERNET and COMPUTERNETWORKS (Incorporating
all features into a single
communication medium)17PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Economics of e-Commerce
Commerce
Framework and Starting
Points•••e-Commerce

Scarcity and Dilemma
Increasing costs and decreasing
satisfaction
Businesses aim to be pioneers, the best,and unique

•
•
•
•

”Abundant Scarcity”
Computer-driven
Businesses aim to be agile and adaptive
Interconnectivity within networks inthe ecosystem

Market•Brick and mortar stores—operate basedon set hours••

Internet, no store hours;
trust mechanisms and issues

Product/Services•

Clear definition•

Combinations of products andservices

Speed and Cost ofCommunication•

Dependent on physical distance between
parties Involved•

Independent of physical distanceMarketing andAdvertisements••

Promotions through mass media.
Actors and regulators. Natural
gatekeepers such as publishers•••

Low to zero cost of communications.
Potential for scams and fake news
Customer is the network

Investments and Overhead•••

Need for fixed investments
Overhead expenses
Regular employees•••

Minimal investments
Minimal overhead expense
Gig workers

Industry interaction•

Intense competition among industry players•

Collaboration and competition

Profit•

Per product margin•

Product margin + value of network

Table 3. Economics of e-Commerce
Without being perfectly efficient, e-Commerce is noticeably faster and cheaper than traditional economic transactions,
as it lowers friction by reducing the cost of exchanging information. The reduction of information asymmetry andcreation of mutual value then depends on the level of collaboration, complementarity, connectivity, and, ultimately, theability of e-Commerce participants to exchange and make use of information available in the ecosystem.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Lowering Barriers for MSMEs
e-Commerce provides massive opportunities for businesses, as it reduces the capital and fixed expenses needed to participate as a merchant.
Marketing, logistics, and other overhead expenses are replaced by internet and platform fees. In exchange for platform fees, online merchants
gain access to a larger market, without being limited by store hours and physical distance to the customer.
Traditional businesses would also have to account for production costs and the number of actual orders, as the fewer transactions there are, thehigher the production cost. e-Commerce, on the other hand, maintains equal transaction costs across the board and can manage operating costs
in different areas, therefore reducing the cost of individual transactions. MSMEs can therefore leverage on easy market entry, lower operation
costs, and high revenue potential.

Figure 9. Lowering Barriers for MSMEs Offline Seller vs. Online Seller

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce Architecture
e-Commerce architecture defines the players in the ecosystem.
As the diagram shows, the basic foundation is having the proper
infrastructure in place.
Infrastructure here refers to both hard and soft infrastructure.
Hardware covers equipment such as computers, servers, routers,
switches, telecommunication infrastructures, and many others toenable organizations to have any IT services.
Software enables organizations to make use of hardware toprovide services or products. Typical software includes productivity
applications, enterprise resource planning, customer relationshipmanagement, information and security management.
Skill/Talent or human capital with the necessary know-how are
crucial to the setup and operation of the company•

Logistics refer to service providers such as last mile delivery
services, truckers, warehouses, and collection points that are
crucial to fulfill the on-demand needs of goods and services. These
new modes of delivery means include robots and drones.

•

Training institutions are also integral in the ecosystem. For Buyers,
consumer protection training helps to mitigate risks in the digital
economy. While Sellers can benefit from doing business online
training to facilitate onboarding by MSMEs

The end goal is to help sellers and buyers reach out to each otherwithout hassle and constraints.

Digital platforms and online retailers easily connect buyers andsellers. The OECD defines online platforms as a “digital service
that facilitates interactions between two or more distinct but
interdependent sets of users who interact through the service
via the Internet.” There are different types of platforms, suchas e-Commerce platforms or marketplaces, which are online
sales channel open for all sellers for marketing their goods andservices, and may or may not collect payment on seller’s behalf.
Marketplaces shall be differentiated from online retailers which referto single seller’s own online channel for marketing its goods andservices that complements its brick and mortar retail business modeland collect payment on its behalf.
Enablers make it easy for buyers to purchase and sellers to market.
•
Access refers to those responsible for providing Fast and reliableinternet that enables access to platforms for buyers and sellers,or Search engines such as Google that provide information
access to buyers and sellers, or Social media channels such as
Instagram provide product-offering access to buyers and sellers•

Payment gateways or financial technology (fintech) remove thehassle borne by cash on delivery. Financial intermediaries likebanks provide Credit offerings via digital banking provide shortterm loans for buyers and sellers to commerce

E-COMMERCE PHILIPPINES 2022 ROADMAP

Figure 10. Defining the Players in the Ecosystem

20

PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINESThe e-Commerce Ecosystem

Online Customers

Source: DTI E-commerce Office

Figure 11. Basic e-Commerce Ecosystem

What is the e-Commerce ecosystem?
The e-Commerce ecosystem can be defined as a network of interconnected functions that comprise the full cycle ofbuying and selling of goods and services electronically. To have a better grasp of the ecosystem, one can think of thelifecycle of an online transaction which begins from the accessing of the internet, to processing of the order, up to
delivery and post-transaction services thereby, determining the various industries and companies at work.
This roadmap simplifies the interrelationship between e-Commerce players through the diagram which shows theinteraction of the players in the community.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Platforms
Understanding the Digital Platforms ecosystem

Figure 12. Platforms Ecosystem

Platforms are strategic actors that function beyond creating markets towards designing these – by controlling the information available, case of
search, and cost of access for users. By providing users the ability to access a greater variety of information at a lower cost, protracted haggling is
avoided and the velocity of transactions is made faster.
Despite this control, platforms’ value hinge on
1. Their ability to create and maintain networks of buyers and sellers, preserving a virtuous circle of benefits among various users;
2. Their capacity to increase/induce trust by building reputation systems with strong feedback incentives;
3. Their level of integration with payment and logistics systems to complete business transactions, and;4. Their capability to gather, manage, and exchange information with other platforms and service providers.
The role that digital platforms play in e-Commerce cannot be overemphasized and MSMEs are crucial to the business of digital platforms as they
constitute much of the aggregated marketplaces. The Study on MSMEs Participation in the Digital Economy in ASEAN by the Economic ResearchInstitute for ASEAN and East Asia, noted that digital platforms lower barriers to digitalization for MSMEs by providing easy-to-use digital solutions
at lower costs as it does not require large initial investments, through profit-sharing models. MSMEs also benefit from low ‘switching costs’ offeredby digital technology as MSMEs are not tied to production systems that may not yield profit.
Regardless of different goals, the government and digital platforms share a common interest in championing digitalization for MSMEs. It istherefore beneficial for both parties to collaborate and provide support in addressing challenges encountered in the promotion of going digital.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Payment
Understanding the Payment Ecosystem

Figure 13. Digital payments ecosystemthat cater to the unbanked, underbanked, and less digital-savvy
individuals is key to making e-Commerce more inclusive. At theforefront are e-wallet and OTC/COD payment providers that allow
even the unbanked to participate in e-Commerce by owning wallets
with no minimum deposit and paying with cash. From the sellerside, there are online payment aggregators and payment gateways
that allow small merchants to process and receive online payment,
without owning bank accounts.

With the rise of e-Commerce comes a transformation in the way
money is exchanged prompting the development of a vibrant digital
payment ecosystem.
Growth in B2C markets and digital SMEs require payment
systems that cater to huge volumes of micropayments at low cost,
necessitating a dematerialization of money, presently made possible
through electronic/digital banking and digital payment systems.
While these systems are in place, providing payment options

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Banks also play a critical role, especially with the digitization of B2B transactions. Someinnovative banks are moving towards using open banking systems that allow them towork directly with platforms and third-party developers, paving the way towards a morecollaborative approach to financial innovation.

Payment Ecosystem

Note: This is just a representation of the ecosystem and is not intended to provide a complete or exhaustive list of providers

Figure 14. Players in the Philippine digital payments ecosystem

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Logistics
Understanding the Logistics ecosystem
Defining the Players in the Philippine e-Commerce Ecosystem

Figure 15. Logistics Ecosystem

Supply chain management is an important backend component of e-Commerce, with multiple
merchants relying on third-party logistics providers
to store and ship their products. Oftentimes, online
marketplaces invest in warehouses, distribution
centers, and sophisticated supply chain and logistics
processes to satisfy the increasingly competitive
demands of consumers.

Technology also plays an important role in improving logistics efficiency while giving
customers more control over the delivery process. With it, marketplaces can:
1.
2.
3.

Synchronize the front and back-end of online retail,
Reduce process redundancies through automation software and real-time data
sharing, andProvide multiple shipping options for last-mile deliveries with the help oftransport-focused platforms.

With further integration and collaboration between different platforms, logistics
innovators can take advantage of data on customer purchase trends and preferences
to be more strategic in resource allocation.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINESIntermediaries
Intermediaries are enablers or providers of e-Commerce related products and services that provide platforms with ancillary tools to better
connect to users. These include email companies, digital marketing firms, and similar providers. Intermediaries or enablers make it easy forbuyers to purchase and sellers to market. Whether they provide easier access to fast and reliable internet that enables access to platforms forbuyers and sellers, or search engines that provide information access to buyers and sellers, or social media channels that provide product-offering
access to buyers and sellers, training institutions that enable upskilling or reskilling, intermediaries facilitate.

Government

Figure 16. Government e-Commerce ecosystem
It is evident, therefore, that the government must adapt andpromote a transformational e-government whereby computerbased information and communications technologies are utilized
to revolutionize the way government works. Government shallnot only regulate e-Commerce, but actively participate in the
network and advocate for digitalization—pushing the frontiers ofdigitalization within its own organization.

We have several government offices in charge of overseeing
different aspects of e-Commerce, with the Department of Trade& Industry heading its development agenda. Nevertheless, we are
posed with a significant challenge, given the government’s dual roleas an e-Commerce network administrator and a major participant
in the ecosystem.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Philippine e-Commercein Numbers

Source: Digital 2021: The Philippines, We Are Social – Hootsuite

Figure 17. Philippine e-Commerce in Numbers

English-speaking Filipino youth drive up online media usage and
e-Commerce at a compounded annual growth rate (CAGR) of 27%
and 58% from 2019 to 2020. On the contrary, online travel faces
headwinds amidst the COVID-19 pandemic.

Filipinos are among the heaviest users of the internet and social
media, and greater adoption of e-Commerce has been seen during
the pandemic. However, the majority of the population remains
unbanked and, therefore, unable to make online transactions.
Nevertheless, this is being mitigated by the emergence of payment
facilitators that allow cash-on-delivery transactions.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce and Media offsets
contraction in Transport & Food and Travel

Source: e-Conomy SEA 2020 Report, Google, Temasek,
Bain & Company (2020)

Figure 18. Philippines GMV (US $_B) per sector

Compared to its neighbors, the Philippines has the most room for growth - with theinternet economy contributing around 2.1% of GDP. Although buoyed by large deals inthe digital financial service sector, programs to encourage local innovation and startup
investments are much needed.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINESUNCTAD Business to Consumer Index 2020
Based on the recent report released by the UNCTAD in the 2020 B2C Index, the Philippines fell 10 notches, from 86th place (adjusted) on the2019 ranking. The country’s Share of individuals with internet increased to 65, the Share of individuals with an account remain unchanged at
35 while scores on secure internet servers and postal reliability dropped to 39 and 40 respectively.

UNCTAD B2C INDICATORS
Share of
Secureindividuals
internetwith anservers
account(normalized,(15+, 20172019)or latest)

INTERNET SHOPPERS

2020
Rank

COUNTRY

Share ofindividuals
using theinternet
(2019 orlatest)

UPU
postalreliability
score(2019 orlatest)

2020
Index
Value

Index
value
change(2019-20
data)

2019
Index
Rank

4

Singapore

89

98

94

97

94.4

-0.4

3

66%

58.7%

30

Malaysia

84

85

71

85

81.3

-2.1

31

35%

29.6%

42

Thailand

67

82

59

97

76.0

2.0

48

14%

8.4%

63

Vietnam

69

31

64

83

61.6

0.8

66

36%

18.7%

83

Indonesia

48

49

60

43

50.1

0.0

85

31%

9.9%

96

Philippines

65

35

39

40

44.7

-5.1

86

17%

9.1%

101

Laos

26

29

30

78

40.6

5.4

112

22%

5.6%

117

Cambodia

40

22

42

21

31.1

0.3

121

11%

3.1%

130

Myanmar

31

26

22

17

24.0

-2.9

128

7%

2.7%

-

Brunei

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Table 4. UNCTAD B2C Index 2020: PHL vs. ASEAN

Source: UNCTAD B2C E-COMMERCE INDEX 2020, UNCTAD (2020)

Singapore continues to take the lead among ASEAN, with the highest number of internet shoppers recorded atreaching almost 60% of its population. For this part, internet shoppers in the Philippines, according to UNCTAD
is less than 10% of total population, and 17% of internet users.

E-COMMERCE PHILIPPINES 2022 ROADMAPAs
as shareshare ofof Internet
population
users (%)(%)

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Environment of the Roadmap
National and Global Environment

Figure 19. Latest World Economic Outlook Growth Projections•

Expectations of a worldwide growth contraction are raised amidst
the COVID-19 pandemic, as economic activity, mobility, and labormarkets remain depressed. This is most likely to be severe inEurope, Latin America, and the US.

••

Pervasive uncertainty exists due to factors such as:•
Length of lockdowns depending on the ability of each country
to control virus spread•
Availability of employment for displaced workers•
Dampened consumer spending due to social distancing
measures

E-COMMERCE PHILIPPINES 2022 ROADMAPThe ability of businesses to reconfigure operations and adapt to
new normal
Risk-aversion of banks, investors, and consumers due to the
bleak economic environment
Cross-border spillovers

ICT-ready nations have countered economic shocks from thepandemic by using technology to sustain business operations andtransactions. However, even with advances in technology, developed
economies with aging populations are limited by their slower
consumption patterns and the heavy burden of public transfers toolder citizens.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Figure 20. Historical Gross Domestic Product of the Philippines

While our financial strength is evident in our falling debt
to GDP ratio, and rising foreign direct investments (FDI),
supported by improvement in ease of doing business, factorsthat dampen economic growth remain. These include low
agricultural productivity, obstacles to doing business, shortageof technical skills, high frequency of natural calamities, highrates of electricity, and residual corruption.

The Philippines is one of the fastest-growing emerging markets,with its gross domestic output (GDP) growth ranging between 6-7%
in the last 10 years. This is buoyed by:
•
•
•
•
•
•
•

A young and vibrant population
High domestic demand, with household consumption
contributing the most to GDP
Improving savings rate and investment spending,
Rising infrastructure spending across regions,
Employment gains,
Lowering inflation, low-interest environment, and stableexchange rateSignificant net additional income from Filipinos working abroad

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Global e-Commerce
The United Nations Conference on Trade and Development (UNCTAD) estimates that e-Commerce sales
contributed $29 trillion or 36% of global GDP in 2017. This can be attributed to the availability of more
affordable and reliable ICT and internet connectivity, giving consumers and businesses access to markets
and information.
Apart from technology, social adoption hinged on education and security, facilitative legal and institutional
environment, and efficiency of payment and delivery systems contribute to the expansion of e-business.

The SEA Internet
Economy will exceed$100B GMV this year
despite headwinds

Source: e-Conomy SEA 2020 Report, Google, Temasek,
Bain & Company (2020)

Figure 21. Southeast Asian Internet Economy, GMV (US$_B)

As growth in cross-border B2C trade expands, hindrances toregional trade are brought to light. Common concerns include
internet access, cybersecurity, customs rules and taxation, andthe returns process. All these points towards the need for regional
investment in connectivity, not just in terms of technology andinfrastructure, but also in the necessity of forming regionallyrecognized cross-border standards and regulations.

In Southeast Asia, the internet economy, comprising internet
retail, online travel, ride-hailing, and online media, continues togrow at an unmatched pace. Indonesia and Vietnam lead thepack, leveraging their sizeable market base and fast adoption ofdigital payment to attract entrepreneurial startups and investors.
Singapore, on the other hand, continues to compete as a regional
gateway, banking on its world-class business environment andarchitecture to attract internet unicorns.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce in the COVID-19 Pandemic
the closing of businesses there was a decrease of more than 50%
in the total sales of the businesses which led to the adoption of
e-Commerce. The DTI Business Name Registration Division reported
a total of 88,574 newly registered business names for online storesat the end of 2020. And there was a 4,953% increase from the 1,753
registered business names for online stores recorded in January to
March 15 before the government placed Metro Manila and a largepart of the economy under quarantine.

Even though the COVID-19 pandemic has reversed the gains inpoverty reduction, it has also highlighted the growth opportunities
offered by digitalization,” according to ADB Chief Economist
Yasuyuki Sawada as cited by Ordinario (2021). Digitalization ande-Commerce became the default solutions to challenges brought by
the pandemic. The sudden growth of innovation and technologicaladoption was evident as seen in the surge of demand for online
shopping and services, as well as the adoption of new digitalmodels of doing business. And based on the Digital Economy
Compass 2020 by Statista there was an increase in media usage
due to the decrease in mobility and travel opportunities.

One glaring fact is that while adoption of online services
was faster in developed countries with digital platforms andintegrated supply chains, emerging economies have experienced
various challenges in the adoption of e-Commerce. Some of theopportunities and obstacles of e-Commerce growth in the face ofthe global pandemic include:

According to the DTI-initiated rapid assessment survey on
e-Commerce and the use of internet for business in 2020, mostbusinesses were not engaged in e-Commerce prior to the Enhanced
Community Quarantine (ECQ). And because of the pandemic andGOOD NEWS
•

•

•
•

BAD NEWS•

Fast adoption of e-Commerce platforms and online
communication tools reduce the disruption ofbusiness and personal transactions
Growth in retail e-Commerce and online media to
supplement traditional recreation and purchasemethods
Platforms make it easier for small businesses and
gig workers to onboard
Digital banks have been formed, and traditionalbanks are expanding online payment/banking
services••••

Severe strains in telecommunications
infrastructure
Rise in fraudulent transactions displaying
regulatory weaknesses in consumer protection
Supply chain bottlenecks in logistics services due tolower transport capacity
Administrative and regulatory frictions in
implementing new safety requirements
A greater digital divide due to a substantial poor
population who have no access to the internet,
bank or mobile money accounts, or even personalsmartphones

Table 5. e-Commerce in the COVID-19 Pandemic

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce Situationer
Philippine e-Commerce was mainly propelled by a combination of
the demands of a young, growing population, exacting easier accessto goods and services, along with an abundant supply of innately
enterprising Filipinos, aided by relatives earning income from abroad.
Beyond this, the country is buoyed by its growing middle class,accelerating access to the internet, mobile phones, and financial
technology (fintech) innovations that enhance financial inclusion.
Nevertheless, e-Commerce development has obstacles, such as:
•
•

•

•

•

Slow and unreliable internet connection;
Low access to more specialized business-to-business (B2B) financial
services that can directly lower the cost of borrowing money andmake trade more inclusive for MSMEs (ex. access to trade financeand credit insurance);
High logistics cost as a share of total operating cost due to gaps intransportation infrastructure, warehousing facilities, and systems
that can bolster supply chain integration and logistics coordination;
Complicated and outdated policies and requirements, exacerbatedby the overabundance of regulatory agencies overseeing different
aspects of online business; andUneven access to markets, information, and connectivity
infrastructure, especially for MSMEs and the rural population.

The combination of strong demand conditions, supply limitations, andevolving policies contribute to the dynamic structure of e-Commerce,with near-monopolies in some services, and intense competition inothers. For platforms, heavy investment requirements in applicationand network development (i.e., users and partners) provide hefty entry
barriers, reinforcing monopolistic, and oligopolistic market structures.
Strong incumbents are balanced by the influx of new startup capital fromforeign funders and large companies diversifying their digital portfolios.
While the last few years have brought a marked expansion in
e-Commerce, without much cultivation and oversight from regulators,
mounting cases of cybercrime and service quality complaints require
the advancement of public policies to address the growing needs of thedigital economy.

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Industry Analysis Framework

Figure 22. Modified Structure Conduct Performance(S-C-P) Industry Analysis Framework

Note: Assessment and illustration by Ronilo Balbieran and the DTI e-Commerce Office basedon existing studies on ecommerce in the Philippine setting (see References) and various
activities organized and surveys conducted. For recent policy assessment on ecommerce,
please see PIDS Discussion Paper Series No. 2020-46 Costs and Benefits of a New Discipline
on Electronic Commerce (Cuenca, Quimba, & Serafica, 2020).

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

e-Commerce Challenges and Opportunities

CHALLENGES/RISKSPHILIPPINESGLOBAL••••

Aging population in developed
economies
Mobility restrictions due to global
pandemic
Intensifying geopolitical risks
Global economic slowdown

•
•
•
•
•
•
•

•
•

OPPORTUNITIES••

Rapid technological development
Increasing interoperability of
applications
Accelerating access to smartphones
and internet
Faster (and forced) adoption of
e-Commerce due to COVID-19
pandemic••••

Digital divide
Challenges in physical and digital
logistics
Slow, unreliable, and costly internet
accessUnderdeveloped financial & insurance
instruments
Challenges in ease of doing businessYoung, growing, & digital-readypopulation
Growing middle class with increasingpurchasing power
Growth in financial inclusion and digital
payments
Emerging sectors: healthtech, edutech,
insurtech,
Opportunities in copyrights-basedindustries, cybersecurity services, andagri-ecommerce marketplaces
Supported by: BUILD BUILD BUILD
program, formation of regional growthhubs, and increasing collaboration
between public and private sectors

Table 6. e-Commerce Challenges and Opportunities

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PART I: UNDERSTANDING E-COMMERCE IN THE PHILIPPINES

Opportunities for Value Creation

Source: Lecture Notes on e-Commerce, Ronilo Balbieran

Figure 23. Opportunities for Value Creation

Currently, the majority of the platforms, providers, and merchants focus on offering goods and simple services but
e-Commerce has substantial potential for value creation that goes beyond the satisfaction of needs towards thefulfillment of wants.
The creative sector and other copyrights-based industries (CBIs) are major contributors in developed digital
economies. These developed economies adopt a joint approach in promoting innovation and protecting intellectual
property which play vital roles in harnessing the online economy’s boundless opportunities for value creation.
According to the World Intellectual Property Organization (2005), “CBIs linked to the digital revolution have grown
faster than the traditional sectors of the economy.” And in a PIDS Discussion Paper by Serafica and Albert (2018), it
was recommended that the Philippines should focus on the promotion and protection of digital products given the
country’s pool of creative talent to enable this emerging sector to contribute to the country’s economic growth.

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PART II: ABOUT THIS ROADMAPThe Need for an
Updated Roadmap
The Philippine government has long since recognized therole of e-Commerce in the country and has supported thiswith the creation of the Electronic Commerce Act (Republic
Act No. 8792) in the year 2000. Since then, efforts have been
made to promote electronic transactions and create a safer
environment for online consumers and merchants. These
were aggressively pursued with the creation of the laste-Commerce roadmap.

While the last roadmap gave special focus on creating foundational
policies for e-Commerce, this roadmap builds on those initiatives,with emphasis on implementing programs and projects for the useof e-Commerce in government, business, and private transactions.
Aside from its main objective of 25% contribution to GDP, the 20162020 roadmap identified five success criteria, which include:•

The Philippine e-Commerce Roadmap 2016-2020 presents
the Philippines’ strategic plans, policies, and other support
measures to harness the benefits of e-Commerce forthe country. Its main objective was to pave the way for
e-Commerce to contribute 25% to Philippine gross domestic
product (GDP) by 2020, and with this incorporated actionplans based on key areas highlighted in the Asia-Pacific
Economic Cooperation (APEC) Digital Prosperity Checklist.
These include:
•
•

•

•

•

•

Infrastructure: The need for an appropriate supply
chain, communications, and applications infrastructure;
Investment: The ability to promote and support a
range of investment opportunities from Foreign Direct
Investment (FDI) to capital flows;
Innovation: The ability to foster and support
innovation, including the capacity to protect innovationand investment in research and development;
Intellectual Capital: The ability to foster theappropriate skills and training from technological to
linguistic to entrepreneurship;
Information Flow: The ability to use, transfer, andprocess information – the currency of the digital
economy – while promoting privacy and a trusted
Internet environment; andIntegration: The ability to connect domestic industries
with the global economy.

E-COMMERCE PHILIPPINES 2022 ROADMAP

•
•
•
•

100,000 Micro, Small, and Medium Enterprises doing
e-Commerce
40 – 50% of internet users doing e-Commerce
Fast and competitive internet access
Cybercrime enforcement and protection
Online and connected government (G2G, G2B, G2C, G2E)

To achieve these, fifty-three (53) agenda items were formed undereach key area. Seventy percent have been accomplished, while therest are ongoing or under discussion. Unaccomplished agenda items
are incorporated in the 2022 roadmap initiatives.

ASSESSMENT REPORT CARDSTATUS

NO. OF AGENDAITEMSPERCENTAGE

Accomplished

37

70%

13

25%

3

5%

Agenda item has been completed or launched

OngoingWork on the agenda item has begun but has
not been completed

PendingWork on the agenda item has not begun

Table 7. Assessment Report Card of PECR 1 2016 -2020

38

PART II: ABOUT THIS ROADMAP

Crafting the Roadmap
This Roadmap is a product of open dialogue between the public sector and a diversity of stakeholders from theprivate sector jointly examining the Philippine e-Commerce architecture, the industries it covers, and how theseinteract and affect the whole ecosystem.
Stakeholder engagement was critical, and it was important to establish the ecosystem to ensure a comprehensive
and holistic view of e-Commerce in the Philippines.

The Making of the Roadmap

Phase 1:
Review

Phase 2:Engagement
Phase

E-COMMERCE PHILIPPINES 2022 ROADMAP

Phase 3:
Formulation

39

Phase 4:
Public Launchof e-Commerce
Philippines
2022 Roadmap

Phase 5:
Communication,
information
and advocacy
campaign on
e-Commerce
Philippines 2022
roadmap

PART II: ABOUT THIS ROADMAP

e-Commerce Roadmap

Figure 24. e-Commerce Roadmap: The Process

E-COMMERCE PHILIPPINES 2022 ROADMAP

40

PART II: ABOUT THIS ROADMAPThe arrival of the pandemic in March 2020 saw the need to “COVIDproof’ the e-Commerce roadmap. With the imposition of quarantine
measures, roadmap formulation changed course from regionalroadshows to specialized studies and focused group discussions toensure that the strategies earlier identified remain valid.
Phase 1 (Review Phase) The roadmap formulation process started
with a review of the 2016-2020 Philippine e-Commerce Roadmap
to examine how much has been accomplished, what has yet tobe fulfilled, and what improvements could be made for the newroadmap. This was done through a combination of desk researchand consultations. Understanding the ecosystem, and defining thearchitecture and identifying the various stakeholders signaled thestart of the ecommerce Philippines 2022 roadmap formulation.

e-Commerce Stakeholders Focus Group Discussions

e-Commerce Brown Bag Brigade Sessions

Phase 2 (Engagement Phase) for the new roadmap began withthe engagement of stakeholders to consult the industry on current
and future issues, validate government strategies, and revisit
metrics and targets from the previous roadmap. This consisted ofa series of focus group discussions (platforms, digital payments,
logistics), brown bag sessions, and special meetings with digitalplatforms, fintechs payment gateways, start-ups, government
agencies, and other participants in the e-Commerce ecosystem.
Each session tackled specific topics or themes, such as consumer
protection, taxation, data privacy, and ease of doing business.
Regional roadshows were earlier planned prior to the pandemic,
hence a session was conducted in the Cordillera Administrative
Region (CAR). Due to quarantine restrictions, the regional roadshow
was replaced by zoom sessions with last mile delivery services, andstart-ups, and DICT. As a result of these efforts, a set of strategicareas, action items, and initiatives were formulated.

e-Commerce
Community

As of January 2020

Figure 25. E-Commerce FGD Discussion, Brown Bag Brigade Sessions,
Viber community

Phase 3 (Formulation Phase) greatly hinged on insights gatheredfrom e-Commerce stakeholders. It involved write-shops/drafting
committee meetings, as well as conducting a baseline study togain an understanding of Philippine micro, small and mediumsized enterprises (MSMEs), and Key Informant Interviews (KII)
on digital platforms. Another critical part of the process was todefine the legal and regulatory framework for doing e-Commercein the Philippines. This included a review of the e-Commerce
Act of 2000, its implementing rules and regulations (IRR), otherpertinent rules and regulations, relevant bills filed in Congress,
together with an identification of regulators involved. Lastly,
an analysis of e-Commerce was made based on the StructureConduct-Performance (SCP) framework, and a direct review of its
architecture, players, and the interaction among these. Through

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276 ACTIVE

these, the framework, strategies, and initiatives under the new
e-Commerce roadmap were formed.
Phase 4 is the launching of e-Commerce Philippines 2022 Roadmap.
Finally, Phase 5 focuses on communication, information, andadvocacy campaigns on the new roadmap.
All these involve continuous communication and participation fromboth private and public stakeholders to extract a shared vision forthe digital economy, and a roadmap that is truly a convergence ofideas. Through a collaborative approach, a strong foundation iscreated for the efficient implementation of this roadmap.

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PART II: ABOUT THIS ROADMAP

Alignment with the National &Global Development Agenda
The importance of e-Commerce during the pandemic was further
emphasized when Congress stipulated a provision in the Bayanihan
to Recover as One Act, mandating the DTI to accelerate andundertake massive promotion of online commerce. Pursuant toRA 11494, Section 4, (JJ) Directing the DTI, in coordination withother implementing agencies, to accelerate and undertake massive
promotion of online commerce and offer technical and financial
assistance through GFIs to those engaged in e-Commerce, suchas those involved in internet retail, digital financial services, digital
media, and ride-hailing. These include programs that will expedite
the digitalization of MSMEs and cooperatives through, training
subsidies for onboarding or starter kits, wage support for new
online enterprises, upskilling/reskilling and other activities as may be
defined by the DTI, Cooperative Development Authority (CDA), DICT,Technical Education and Skills Development Authority (TESDA), andCommission on Higher Education (CHED).

This Roadmap aligns with and contributes to the Philippine
Development Plan (PDP) 2017-2022, which:•••Creates the foundation for an inclusive, high-trust, resilient,and globally-competitive economy;
Outlines strategies for the achievement of a long-term
Ambisyon 2040: “Matatag, Maginhawa, at Panatag na
Buhay” for all Filipinos; andReinforces the Philippine commitment to the UN
Sustainable Development Goals.

This roadmap specifically builds on the following strategies from
PDP 2017-2022:
•

•

•

•

Ensuring people-centered, clean, and efficient
governance (PDP chapter 5) by shifting to e-government
services, adopting transparent e-procurement processes,
and improving the interoperability of gov’t systems;
Expanding Economic Opportunities in Industry andServices through Trabaho and Negosyo (PDP chapter 9)through the engagement, education, and onboarding of
MSMEs to e-Commerce platforms that will give them accessto additional income, services, and previously unreachable
markets;
Increasing the growth potential (PDP chapter 13 & 14) byleveraging on our internet-active population, and providing
regulations & programs that support innovation, creativity,and entrepreneurship; andAccelerating infrastructure development (PDP
chapter 19), especially in transport, logistics, andtelecommunications.

Ambisyon 2040
Matatag, Maginhawa, Panatag na Buhay

Philippine Development Plan 2017-2022
To lay the foundation for inclusive growth, a hightrust and resilient society, and a globally-competitive
knowledge economy

e-Commerce Philippines 2022
To shape a digital ecosystem that makes everything
MADALI for industry development, employment,
and sustainable economic growth

Lastly, in light of the COVID-19 pandemic, and the government’s
efforts to create programs and interventions to mitigate losses
after ECQ, this roadmap contributes to:••

Educational reforms, specifically through the promotion ofdigital learning; andEnsuring the continuity of agriculture/food production andsupply chain

E-COMMERCE PHILIPPINES 2022 ROADMAP

Figure 26. Alignment with the National and Global
Development Agendas

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PART II: ABOUT THIS ROADMAPCOVID-19 ROADMAP CHECKPOINT
On the use of computers and internet:
Majority of respondents (85%) have accessto computers/smartphones and internet

Those who have computers/smartphones
certainly use them to access theinternet as well

Between 20-40% of those with internet are
NOT satisfied with speed and reliability

On earning from the internet and e-Commerce-related services:
Websites / Marketplace/
Platforms
Only 25% have a website.
And 25% use marketplace/platforms.

e-Commerce-related sales

Commonly used platform:

Clients

Around 25%-50% earn fromtheir websites, and frommarketplaces / platforms

Facebook, FB Messenger, Viber,
own website, Instagram, Lazada,
Shopee, WhastApp

Most are engaged in B2C.
Substantial opportunities
with B2G.

On employing ICT specialists, and the use of digital technology and e-Commerce-services
ICT Specialists
Only around 25% employ ICT
specialists

Digital Payments

Electronic Invoices

67% use digital payment
services (online transfer,e-wallet,website/credit)

Only 10% has invoices suitable
for automated processing

Supply Chain and Logistics
72% of logistics coordination
done manually (texts, email,calls, paper)

Summary: Most business respondents have access to computers, internet, and e-Commerce services, but are NOT maximizing these tools for theirconvenience and profit-making.
As an input to the roadmap, the e-Commerce Division conducted a survey
on e-Commerce and the Use of Internet for Business. This was a “’quick
sensing’’ on the adoption of internet and use of advanced technologies toensure continued business activities driving overall survival and growth ofthe economy during the ECQ. The Survey was conducted from April 25, 2020
– June 3, 2020.
The rapid survey revealed that most business respondents have access tocomputers, internet, and e-Commerce services, but are NOT maximizingthese tools for their convenience and profit-making.
••

85% with computers & smartphones (only 40% satisfied with internet
speed and reliability)
e-Commerce sales: 25% have websites; 25% use e-Commerce platforms

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•
•

72% of logistics coordination done in-house manually(texts, email, calls, paper)
Only 10% has invoices suitable for automated processing

Smaller businesses seek clear checklists of regulations
and requirements; need financial support for technology
investments.
Businesses across industries and asset sizes need greater
government support on:••••internet speed
cybersecurity
ease of doing businesslogistics systems and infrastructure.

PART II: ABOUT THIS ROADMAP

Digital Tools/Processes% of Digitalized
MSMEs

Use of basic digital tools

Microsoft Office, email, WhatsApp, personal
computers, mobile phones

56%

Online Presence

Website, social media, e-Commerce sites,
tablets, printers

34%

Use of advanced digital tools,
or digitalization is part of thecore business model

ERP, CRM, analytics, big data, automation,
pure online business, scanners, bank card
readers, central servers, imaging devices

10%

Level of Digitalization

Basic

Intermediate

Advanced

Source: Study on MSMEs Participation in the Digital Economy in ASEAN: Nurturing ASEAN MSMEs to Embrace Digital Adoption, Economic Research Institute for ASEAN and East Asia (ERIA)

Figure 27. MSME Levels of Digitalization, ASEAN Studyfor personal reasons. About four-fifths (82%) are familiar with
e-Commerce platforms, mainly Facebook and Instagram.

Using various statistical methods, the study noted the industry’s
likelihood to utilize ICT tools for business. The level of ICT usage
was classified depending on indicators such as international
scope, business email, business landline, business permit, website,
company role, number of branches, engaged in B2B commerce. The
study noted the industry’s likelihood to utilize ICT tools for business.

26% of MSMEs are aware of digitalization programs offered by
the government and other institutions. About three-fourths (73%)
say that they need capacity building, particularly in financial
management, customer development, and content management.

Of the 400 MSMEs surveyed, the study showed very low digitalizationas 23% did not utilize ICT tools for business and 51% were at Level
1 or only utilized basic digital tools (e.g. Microsoft Office, email,personal computers, etc.). On the other hand, only a fraction had
advanced usage of digital tools with 6% of the respondents noted
having purely online businesses or using advanced digital tools (e.g.
ERP, CRM, data analytics, etc.).

More than half (54%) of MSMEs do not require delivery services.
Close to one-third (35%) of MSMEs do their own deliveries andonly 18% use third-party agencies. Preferred delivery partners are
Lalamove (67%) Grab (49%), and LBC (33%).
Given the digital profile of MSMEs, the roadmap should encourage
MSMEs to use ICT tools and social media to improve business
operations, engage in e-Commerce initiatives by partnering withreliable platform providers, logistics services and payment gateways,
embrace a culture of innovation to ensure continuous improvementand development, and make full use of government’s programs.

MSMEs rate the importance of digital innovation in business at 3.6
on a scale of 1 to 5, with 5 being most important. Those who favor
digital innovation say that it helps improve efficiency or productivity
and customer experience. They use social media, mainly Facebook,

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PART II: ABOUT THIS ROADMAP

Level of
Digitalization% of Digitalized
MSMEs

Firmographic Attribute

Industry

Location

Area of Scope

Digital Tools

Level 3

Agriculture,
Forestry & Fishing,
Manufacturing,
Wholesale & Retail

NCR

International
only, Nationwide,
Various Provinces

Business Email,Business Landline,
Website6%

Level 2

Education,
Manufacturing,
Agriculture,
Forestry & Fishing
Industries

NCR

Nationwide,
Various Provinces,
Province

Business Email,Website21%

Level 1

Transport& Storage,
Wholesale & Retail,Accommodation &Food Service

Region 3

Various Provinces,
City

Business Email51%

Level 0Wholesale & Retail,Accommodation &Food Service

Region 4-A

Barangay

Figure 28. MSME Levels of Digitalization, Philippine Study commissioned by DTI

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23%

PART II: ABOUT THIS ROADMAPKEY INFORMANT INTERVIEWS OF
DIGITAL PLATFORMS
As part of the government’s effort to gain a better understandingof e-Commerce in the Philippines, the DTI e-Commerce Officecommissioned Key Informant Interviews (KII) with the primaryobjective of soliciting vital information and business insights fromkey experts of various digital platforms concerning the state ofe-Commerce and their outlook on the future of the industry in the
country. Target respondents were Chief Operating Officers (COO)or spokespersons designated by the Country Heads of the firms.
For this study, the researchers were able to gather data from thefollowing sectors: Internet Retail, Digital Media, Digital Payments,
and Ride Hailing. All interviews were conducted from August 2020 to
September 2020 and made use of a semi-structured questionnaire
consisting of both open-ended and close-ended questions.

•

Metro cities, empowering more people to participate in the
e-Commerce trade.
Grow cashless payments and build more trust in the virtual
trade. COD is a costly operation anchored on suspicion anddoubt. The growth of digital wallets, in participants and value,
will further accelerate the evolution of PH e-Commerce.

Simplification or MADALI is the keyword to digitalizing MSMEs.
•••

According to digital platforms, Philippine e-Commerce sales are
estimated to be 1% to 2% of total PH retail, posting massive growth
this year as it benefits from the protracted country lockdown
imposed by the COVID-19 global pandemic. While it is expected
to peak in three to five years, now is the perfect time for thegovernment to create a consultative and enabling environment
when PH e-Commerce is at its strategic inflection point.

•

Ease in doing business: Can a small online seller set up his
business in a day or few, rather than one to four months?
Uncomplicated tax computation and administration: A financeteam in the Philippines requires nine people, compared to only
two in Indonesia.
Well-defined and cooperative e-Commerce laws grounded on
consultation and collaboration.
Finally, the Philippine government, the country’s biggest
purchaser and collector, must model the way to digitization.
After all, success starts from within.

Other Insights

The following are recommended strategies by top executives ofleading digital platform providers based on factors that propelled
PH neighbors’ successful digital market:

Factors that make Philippines competitive in e-Commerce regionally
are its:

•

•

•

•

Speed up the implementation of the PH Identification System
ID (PhilsSys ID) that will authenticate each individual and theiraddress, and avoid the nagging problems, such as bogus
buyers, fake sellers, failed deliveries, and expensive Cash on
Delivery (COD) operations, from its absence
One central agency that will oversee all key players in the value
chain, with a progressive mindset, confidence, flexibility, anddoes not act as a restrictive regulator
More telecommunication companies, ideally 10 to 15, to
strengthen the country’s weak internet infrastructure, which
at present is the most expensive and one of the slowest in theregion. Likewise, this could improve access in areas outside

E-COMMERCE PHILIPPINES 2022 ROADMAP

•
•
•
•

A young, digital native population that adapts to anythingmobileSociable, friendly nature of Filipinos
Resourceful and persistent entrepreneurial spirit
The abundance of creative and digital talents
A wide array of city and provincial products and services

In terms of metrics, Gross Merchandise Value (GMV), or the topline
revenue equivalent, is the most important performance indicator in
e-Commerce. Other salient measures are the number of customers,
transactions, deliveries, cross-border selling, and internet speed.

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PART III: MADALI 2022

Our Shared Vision and Pillars
S+S+S=S Strategic Framework

e-Government, e-Commerce institutions,skills, and capacity trainings

Figure 29. Pillars of Philippine e-Commerce Roadmap
As our vehicle, e-Commerce rests on three main pillars:•••

Speed – an e-Commerce ecosystem where consumers have access to timesaving options
through swift transactions and delivery of products and services;
Security – an e-Commerce network founded on trust between sellers and buyers, andreinforced by improved regulations on consumer & merchant protection for internet
transactions; andStructure – a future-ready government encouraging ease of doing business in close
collaboration with the private sector and a citizenry whose skills are aligned with therequirements of Industry 4.0

These represent the shared vision expressed by stakeholders from various consultations, alldirected towards the ultimate goal of creating an e-Commerce ecosystem that drives industry
development, long-term employment, and inclusive growth.

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PART III: MADALI 2022

Vision, Mission, Strategic Objectives
Figure 30. e-Commerce Strategy Map

Through focus group discussions with stakeholders that form part of digital platforms, logistics
networks, and payment providers, suggestions for e-Commerce strategies were gatheredand scored based on importance, urgency, and suggestion frequency. Commonly cited focus
areas include (1) improvement in ease of doing business, primarily through the digitization of
government services, (2) market education, and (3) policy reforms.

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48

From these inputs, this roadmap’s strategic
governance framework was created, forming
12 core processes and 3 organizational
initiatives. Under these are 22 agenda items to
be fulfilled by 2022.

PART III: MADALI 2022

THE e-Commerce Philippines
2022 narrative
The Story Made Simple
What do we hope to achieve? More online sellers, selling either in the domestic and/or foreign markets (Cross-border trade). Whether
business to consumer, business to business, business to government, the e-Commerce roadmap works to increase your sales, protect yourcompany, and ultimately, grow your business.
How? The formula is simple: Ensure speed. Enhance security. Establish structure. To Expand sales.

Figure 31. e-Commerce Narrative

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PART III: MADALI 2022

SPEED IS CRITICAL. Government, primarily through the DICT will endeavor to achieve faster internet speed for the country. Speed of internet
also means speed in everyday life. It means faster government services, easier onboarding for online merchants on any e-Commerce platform,
faster online transactions and digital payments, and delivered via an integrated and efficient logistics system.
SECURITY IS NON-NEGOTIABLE. Primordial in the roadmap is the mission to build trust in e-Commerce. Digital lives of online consumers
must be preserved and protected. Methods of redress must be available and easy. The infographic reflects a cloak that SECURITY provides tosafeguard the e-Commerce ecosystem against attack on data privacy, intellectual property, and risks of cybercrime and fraud.
STRUCTURE IS FOUNDATIONAL. The e-Commerce roadmap promotes digital transformation across the society. The public sector must
automate, private sector must innovate, and Filipinos must evolve either through upskilling (acquiring new skills to improve current
performance) or reskilling (new skills for new job). With the increasing importance of data and data analytics, data infrastructure must be built
and the country’s statistical framework must be updated.

22 Action Agenda
The DICT plays a lead role in accelerating government efforts towards creating a secure, reliable, efficient, and affordable network of ICT
services. The implementation of the National Broadband Plan (NBP) and increasing the number of secure internet servers in the country
have been identified as core activities to enable e-Commerce growth. According to the World Bank report, in 2020 the Philippines’ secureinternet services (per 1 Million people) is valued at 114, significantly lower than Singapore (126,922), Thailand (1,908), or Malaysia (7,494).

Strategy

CP1: Accelerate government efforts in creating a secure,reliable, efficient, and affordable network of ICT services

Agenda1

Accelerate the implementation of the National
Broadband Plan

2

Increase secure internet servers

Investments in logistics infrastructure is an important strategy in this roadmap. This includes both direct investments in infrastructure, such as
warehouses, port development and upgrade, cold storage facilities as well as the modernization of the Philippine Postal Corporation (PHLPost),
the primary body in charge of Philippine postal services. The convergence program will consider the feasibility of e-Commerce hubs andtownships as well as transport & storage infrastructure and facilities, including related systems and software upgrades for improved logistics
operations, in coordination with various logistics-related government agencies and industry associations.

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PART III: MADALI 2022

Strategy

Agenda3

Develop an e-Commerce logistics infrastructure andinvestment convergence program

4

Modernize and transform the Philippine Postal
Corporation into a competent partner and major
player in the logistics sector

CP 2: Initiate an e-Commerce logistics infrastructure andinvestment convergence program

With 10 years to 2030, the UN called for a Decade of Action, when governments, businesses, and individuals collectively mobilize toachieve the Sustainable Development Goals. A large part of this movement is driven by digital governments whose role is to deliver
efficient and inclusive services to everyone. Hence, for this roadmap, our goal is to upgrade the Philippine government, not just to
be a facilitator of business, but also to be one of the main participants in digital transactions. This will be done by implementing thee-Government Master Plan 2022, including compliance to RA 11032 or Ease of Doing Business (EODB) and Efficient Government
Service Delivery Act particularly the creation of the Central Business Portal and Philippine Business Databank. There was a consensus
that digital platforms, during the Key Informant Interview (KII) study conducted, advocated for the fast-tracking of the national ID
system implementation which could greatly improve the Know Your Customer (KYC) process for various services.

Strategy

Agenda5

Promote streamlining and automation in government
and a pleasant user experience on online public
services

6

Fast-track the implementation of the Philippine
Identification System

CP 3: Speed up e-Government initiatives across thee-Commerce ecosystem

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PART III: MADALI 2022

E-commerce needs to be supported by a future-ready regulatory environment that provides a delicate balance between enterprisedevelopment and consumer protection. This will involve three things – (1) updating existing policies particularly those that are obsolete
and no longer responsive to current times (2) creating new policies to align with global/regional practices and (3) creating a safer andmore enabling environment for e-Commerce participants.

Strategy

Agenda7

Update Customs policies and procedures to cover andfacilitate e-Commerce transactions

8

Push for the adoption and implementation of the
proposed Internet Transactions Act

9

Identify and address regulatory bottlenecks that
impede e-Commerce growth

10

Create an enabling environment for the Gig Economy

CP 4: Pursue a future-ready, inclusive, and enabling
regulatory environment

Improvements in digital payments are driven by the BSP through its Digital Payments Transformation Roadmap 2020-2023. Thus,
the e-Commerce Philippines 2022 Roadmap supports the BSP’s thrust to promote financial inclusion and digitalization of payments
because of its impact on e-Commerce. This Roadmap intends to contribute to BSP’s twin outcomes of (i) converting 50% of the total
volume of retail payments into digital form, and (ii) Expanding the financially included to 70% of Filipino adults, by onboarding them tothe formal financial system through the use of payment or transaction accounts. This will be achieved through a massive informationand education campaign to promote cashless transactions either through B2B and B2C, to shift mindsets in favor of digital payments,
to promote consumer protection and digital literacy.

Strategy

Agenda11

Implement the Digital Payments Transformation
Roadmap 2020-2023 of the BSP

12Implement TRAIN 1 provisions on e-invoicing

CP 5: Promote cashless transactions and increase uptakeof digital payments

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PART III: MADALI 2022

This Roadmap recognizes that in order to build consumer confidence in e-Commerce, there is a need to build a more efficient systemof handling consumer complaints. The government will facilitate the development and operationalization of a Philippine Online Dispute
Resolution System (PODRS) to handle the filing of consumer complaints including tracking, ageing, reports generation, and status
updating. The online dispute resolution system shall enable virtual mediation conferences and possible end to end online resolution ofcomplaints. The PODRS shall link with the ASEAN Online Dispute Resolution System for effective resolution of cross-border consumer
complaints.

Strategy
CP 6: Speed up the resolution of complaints and actions
against e-Commerce fraud and IP/data privacy violations

Agenda13

Automate systems to make the resolution of
consumer complaints more efficient and develop
online dispute resolution system

The government will scale up the digitalization of micro, small and medium enterprises (MSMEs). Given the digital profile of MSMEs,
the Roadmap should encourage MSMEs to use ICT tools and social media to improve business operations, engage in e-Commerce
initiatives by partnering with digital platforms/marketplaces, logistics service providers and payment gateways, embrace a culture ofinnovation to ensure continuous improvement and development, and make full use of government’s programs. These efforts on digitaltransformation should increase the number of online merchants or e-retailers with increased online sales.

Strategy
CP 7: Enable the digital transformation of micro, small,and medium enterprises (MSMEs)

Agenda14

Implement a cohesive MSME digitalization program
across various government agencies

With more local startups and established businesses innovating to fill gaps in the e-Commerce space, funding support is needed tohelp innovators expand and gain more traction. A key task in this roadmap is to promote Copyright-based Industries (CBI) as a means
to encourage innovation and increase trade of digital goods and services. The economic contribution of CBI has yet to reach its fullpotential so we too must adopt a joint approach in promoting innovation and protecting intellectual property as these harness theonline economy’s boundless opportunities for value creation. The Roadmap shall advocate for the immediate utilization of the Philippine
Innovative Startup Fund and facilitate the creation of the venture capital fund of the National Development Corporation (NDC) andother government financial institutions. This will be done in collaboration with private sector funds that can provide equity support for
e-Commerce investments.

Strategy
CP 8: Support funding for e-Commerce innovation andtechnology investments

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Agenda15

53

Spur investments in innovation by providing support
to Filipino enterprises creating digital goods andservices. “Tayaan ang Pilipino!”

PART III: MADALI 2022

There is still a huge potential for e-Commerce growth in the business-to-business segment. This requires the digital transformation ofPhilippine businesses, such as investments in digital procurement systems and the integration of these with other platforms to establish
an omnichannel relationship with customers. According to the BSP Digital Payments Transformation Plan, “B2B payments, or supplier
payments, hold much promise given their large volume and high transaction value, yet almost 85% of all supplier payments by volume
are made in cash. Digitalization of B2B payments through payment gateways presents an opportunity for tremendous efficiency gains,and may encourage business expansion and innovations.”

Strategy

CP 9: Increase B2B e-Commerce transactions

Agenda16

Promote the exchange of goods and services between
companies either through a direct or marketplacemodel and increase adoption of cashless transactions

In terms of cross-border trade, the Philippines will continue to pursue the ratification of the United Nations Electronic Commerce
Convention (UNECC), identified as Agenda 11 in the PECR 2016-2020. The UNECC is the only treaty that deals with e-Commerce law,ensuring that fundamental principles of e-Commerce are recognized and enforced across borders. Moreover, it facilitates technologyneutral mutual recognition of electronic signatures. The adoption of the Electronic Communications Convention is in line withprevailing regional and global trends, as it implements the policy decisions of a number of regional organizations such as ASEAN and
APEC. Furthermore, the Roadmap aims to strengthen the ASEAN consumer protection network and other similar networks. This will be
instrumental in addressing cross-border trade issues of platforms to facilitate the faster flow of goods within our regional network.

Strategy

CP 10: Advance cooperation on cross-border digital trade

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Agenda17

54

Enhance cross-border cooperation and market
access through trading agreements and economic
cooperation programs with major e-Commerce
trading partners

PART III: MADALI 2022

The importance of upskilling/reskilling cannot be overemphasized. Noteworthy are the observations/ recommendations of GoogleTemasek-Bain&Company, on the Philippines when it released its 2020 study and underscored its observations that “talent remains a key
blocker that all parties will need to keep working on to ensure the momentum gained this year is sustained”. Government is cognizantof the growing skills gap that is prevalent and is a threat to our growing internet economy. Hence the need to upskill and reskill. As such
DTI and TESDA are collaborating with Skills Future Singapore in developing skills frameworks to guide firms, government, and workers
in crafting and implementing reskilling/upskilling plans to prepare our workforce for Industry 4.0 and ensure that the skills needed byfirms in the future would be available. The goal of the Philippine Development Plan 2017-2022 is clear: Employability improved through astrategy that involves encouraging skills development and retooling through continuing education and training.

Strategy
CP 11: Upskill and reskill Philippine talent to support
e-Commerce growth

Agenda18

Develop a cadre of digitally skilled workers to support
the growing e-Commerce sector

To achieve the stated targets under the roadmap, in terms of number of e-Commerce enterprises, increase in gross merchandise values,
increased adoption of digital payments or cashless transactions, among others, there is a need to formulate and implement effectively
an information education communication (IEC) action plan that will facilitate information dissemination to e-Commerce stakeholders andcapacitate online sellers and online buyers.

Strategy
CP 12: Undertake a massive communication campaign
across business and market segments under a unified
e-Commerce narrative

Agenda19

Develop and implement the “Basta e-Commerce,
MADALI!” Communication PlanAmong the most important initiatives under this roadmap is to institutionalize and capacitate an e-Commerce Bureau that willchampion e-Commerce initiatives, oversee effective regulation of online business activities, and facilitate inter and intra-agency
cooperation. This will be made possible by the Internet Transactions Act.

Strategy
ORG 1: Form a strong e-Commerce bureau that willchampion the whole of government approach

E-COMMERCE PHILIPPINES 2022 ROADMAP

Agenda20

55

Create the e-Commerce Bureau and support withresources and capacity building

PART III: MADALI 2022

Government values the strong engagement by the private sector in updating the e-Commerce roadmap. An e-Commerce Promotion Council
shall be organized as an advisory body to the Secretary of the Department of Trade and Industry (DTI), to provide policy guidance, and monitor
the status of implementation of the strategies enunciated in the roadmap.

Strategy
ORG 2: Establish a council to ensure private sector
engagement in the promotion of e-Commerce

Agenda21

Create the e-Commerce Promotion Council comprisedof stakeholders from both the public and private
sectorOne of the challenges faced by many countries around the world is the lack of standardized statistical data on e-Commerce. For us to trackprogress, we have to come up with measures that can easily be tracked by our statistical authority, as well as studies to help identify key
chokepoints in the industry and how these can be solved using finance, insurance, and technological tools. All these will be possible with theupdating of our statistical framework and the development of digital tools and a portal for monitoring data-driven programs and interventions
in collaboration with e-Commerce players.

Strategy
ORG 3: Pursue an advanced knowledge management
system that is responsive to government and business

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Agenda22

56

Modernize and remodel the system of generating
e-Commerce-related statistics and studies to be
responsive to the needs of the stakeholders

PART III: MADALI 2022

Promoting an all of
e-Government approach

Figure 32. Philippine e-Government Support for e-Commerce Development

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PART III: MADALI 2022

Special Note on the Joint Strategy
for B2B and B2C e-Commerce
While the bulk of current e-Commerce transactions in the Philippines come from B2C trade, there ismuch opportunity for growth in the B2B segment. UNCTAD’s 2018 report shows this potential as B2B
trade accounts for 83% of e-Commerce sales in the top 10 economies. Of these, Japan has the mostdigitally integrated B2B trade amounting to 95% of total e-Commerce sales. China’s B2B trade, on theother hand, accounts for 41% of online business transactions.

e-Commerce Sales (Top 10)

Table 23. e-Commerce Sales based on UNCTAD Report 2018
The huge potential for business-to-business transactions highlights the importance of digitaltransformation for Philippine enterprises. Improving digital infrastructure and capacity for businesses
could improve local supply chain integration, as more MSMEs are empowered to supply to larger
businesses, as well as increase opportunities for export and global trade.

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PART III: MADALI 2022

Digital Payments: A catalyst for thegrowth of e-Commerce in the Philippines
Digital Payments
By the Better Than Cash Alliance (BTCA)
Retail Payment System (NRPS)7. The interoperable payments
infrastructure established by the NRPS Framework has laid thefoundations for the acceleration of digital solutions during the
COVID-19 pandemic. Specifically, InstaPay and PESONet adoption
has soared8 and has facilitated the transition to contactless
payment options, indicating a paradigm shift for consumers andbusinesses9. This accelerated uptake of digital solutions has spedup the transition towards a digital economy. A unique opportunity
has emerged to leverage this momentum to address the key
challenges faced by varying types of merchants and to responsibly
scale adoption by underserved customers, to ensure that thistransition is equitable for all Filipinos.

E-commerce and digital payments are mutually reinforcing. They
help advance goals of broader merchant digitization, increasefinancial inclusion1 and revenues ultimately helping to promoteformalization of merchants and offering greater convenience,transparency and security for consumers and merchants alike.
According to the 2019 State of Digital Payments - Country
Diagnostic, payments to merchants comprise 95% of overall
Person to Business (P2B) payments, which represents the bulkof transactions2 in the Philippines3. However, only 15% of all
merchants and 31% of all Filipino adults who have accounts,
accept, or pay digitally and that too infrequently4. The potential for
digitization is most significant amongst micro and small merchants
who form the majority and who also stand to gain the most from its
benefits5.

Increasing the uptake of digital payments is one of the core
processes in the e-Commerce Roadmap 2020-2022. Through its
newly established e-Commerce bureau, the Department of Tradeand Industry (DTI) is co-chairing a public-private working group
together with the BSP to increase the use of digital payments ina responsible10 manner by addressing adoption and use barriers(see Table 1.) for both merchants and consumers. This initiative will
also identify and outline sector-specific actions including those forleading e-Commerce players to drive digital payments uptake.

The Government of the Philippines has long recognized6 digital
payments as a policy priority to enable Filipinos to seize theopportunities of th e digital revolution. Over the last years, theBangko Sentral ng Pilipinas (BSP) has coordinated strategic efforts
that have resulted in significant policy and regulatory reforms
promoting digital payments such as the launch of the National

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Recurring digital payment transactions help to build merchant financial profiles enabling banks and electronic money issuers to design further financial services such as savings,
loan products, and investments that suit their specific needs
Overall P2B payments account for 75% of overall payment in the Philippines
The State of Digital Payments in the Philippines-Country Diagnostic, BSP and Better than Cash Alliance, December 2019, p32
Country Diagnostic, p11
Country Diagnostic, p11
The Government of the Philippines is one of the founding members of the Better than Cash Alliance in 2015.
BSP Digital Payments Transformation Report 2020-2023, p10-11
Based on BSP data, For the first eight months of 2020, the value of InstaPay rose almost 400 percent, while that of PESONet jumped 100 percent year-on-year. By volume oftransactions, InstaPay and PESONet soared by 624 percent and 130 percent, respectively
https://business.inquirer.net/313376/cash-still-king-in-ph-but-hold-on-the-throne-weakening#ixzz6hRHToa1P
With reference to BTCA Responsible Digital Payment Guidelines and BSP consumer protection principles

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PART III: MADALI 2022

Segment-specific challenges for digital payments adoption and use in e-Commerce

Large and medium
businesses(B2B payments)

Small and micromerchants

Most large and medium businesses already buy and sell goods and services through electronic means. Digital orders
and settlements increase the transparency and efficiency of these business to business transactions (“B2B”) which arecharacteristically larger, recurring and often defined by monthly or yearly demand. Businesses which have digitized otheressential parts of their business processes such as inventory, accounting, customer management, logistics, invoicing, arealso better positioned to settle their payments digitally.
In the Philippines, only less than 2% by volume and 6% by value of these payments are made digitally11. Businesses cite
audit requirements paper trails, and a preference for checks, to be the key barriers in digitizing the space further. To easeup operational barriers, recent regulation by BIR on issuance of e-ORs aim to mitigate identified obstacles12. In parallel, apilot is also planned in 2021 to test e-invoices and e-receipts and guidelines have been simplified for business to register
their digital accounting systems13. Digitizing supplier payments is estimated to result in USD 20–45 billion in annual
savings14.

COVID-19 has accelerated the transition of small and micro retailers to online platforms with business registrations
reflecting almost 40X growth in a period of 5 months15. Given that the small and micro segment of merchants are the least
digitally integrated in terms of their business processes (i.e. inventory management, invoicing), their journey to digital
payments requires more attention. Their willingness to accept digital payments is largely driven by customer demand andface these additional challenges:••(B2B and P2B
payments)

11.
12.
13.
14.
15.
16.

the payment fee (on e-Commerce platforms) or Merchant Discount Rate (MDR) for digital payment acceptance (via
debit/credit cards) are high in relation to the smaller individual transaction size
basic digital infrastructure challenges of internet connectivity, and cash flow management when transitioning

More than half of the country’s micro and small businesses are run by women and while Filipino women are notably
ahead of men in the overall uptake of digital payments16, a gender specific approach to addressing the challenges of thissegment will be key.

Country Diagnostic, p11(Revenue Memorandum Circular (RMC) No. 59-2020, pursuant to the Republic Act (RA) No. 11469, otherwise known as “Bayanihan to Heal As One Act”, amending the provisions of
the RMC No. 47-2020).
https://www.cnn.ph/business/2020/10/28/DOF-invoice-receipt-pandemic-COVID-19.html
Country Diagnostic, p11
As of Aug.10, business registration related to online retail grew to over 68,000 from around 1,700 registrations in January to March 2020 as quoted by DTI ASEC Jean Pacheco.
Country Diagnostic, p9

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Consumers

The COVID crisis has similarly shifted consumer purchasing towards electronic and social commerce platforms. A recent
consumer survey17 shows that 80% of respondents shopped online and more than 40% of them had purchased more
online during the resulting lockdowns.
However, Filipinos still consistently show preference for Cash-on-Delivery (COD), which is estimated to account for
approximately 80% of all e-Commerce payments on the e-Commerce platforms18. While access to transaction accounts19
still have much potential for growth, given the demographic of online shoppers, this preference points to larger issues
around lack of trust and convenience faced by consumers.

(P2B payments)

To alleviate these concerns, it is necessary for the entire ecosystem to nurture consumer awareness and afford greaterattention on enabling responsible digital payments through (1) transparent grievance redressal mechanisms and (2)improving security of digital payment platforms and data infrastructure for both merchants and consumers.

The BSP, through its Digital Payments Transformation Roadmap
2020-2023, has also outlined a set of interventions that impact
the e-Commerce use-case and are expected to encourage higher
consumer uptake and frequency of digital payments:

3.

1.

4.

Direct Debit via Batch EFT Credit ACH – helps streamline
payment collections, especially for recurring payments,
giving merchants the confidence of streamlined cash flows.
For consumer adoption, user experience and convenience
will be key.
Bill payments ACH2420 – increase convenience formerchants-billers and consumers ensuring that a biller
can collect from payers with different payment service
providers, thus removing the current fragmentation andinefficiencies observed in the bills collection process.

2.

PhilSys – continued support to the development and roll-outof the national ID including the facilitation of PhilSys enabledelectronic-KYC. This will significantly reduce foundational barriers
around the lack of account access in the Philippines and reducethe cost of onboarding and authentication for financial service
providers.
P2M QR-PH – Consumers can avoid the hassle of keying inaccount details of merchants by scanning the merchant’s QR.
The interoperability enabled by the QR PH standard further
removes the need for merchants and customers to maintainseveral accounts. There is also potential for further innovationand impact on e-Commerce through use of QR for payment ondelivery instead of COD.

17.
18.
19.
20.

Rakuten insight, May 2020
Consultations with e-Commerce players; this has decreased slightly from 85% of all sales through cash as reported in the 2019 State of Digital Payments in the Philippines report
There is 28.6% overall account penetration as per BSP’s 2019 Financial Inclusion Survey
Bills Pay via Real Time Low Value EFT Credit Automated Clearing House (ACH)

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Collectively, the efforts for increased coordination of public policy
initiatives and increased collaboration across the Government
and with the leading e-Commerce players as part of the merchantdigitization working group, will facilitate the adoption and use ofdigital payments in e-Commerce and propel growth of the sector.

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PART III: MADALI 2022

Logistics
By the DTI Supply Chain and Logistics Management
Division (SCLMD)
According to the World Bank’s Philippine Digital Economy Report
2020, low logistics performance and high costs are the primary
supply chain issues that beset the country. The DTI/WB study on
logistics cost reflects the Philippines’ logistics cost as highest among
ASEAN neighbors, with these accounting for about 27% of the costof sales among manufacturing firms.

Reducing logistics cost and increasing efficiency of logistics
performance is a crucial aspect of e-Commerce growth. While thepandemic accelerated the adoption of e-Commerce, there is a needfor a cohesive response to address the inefficiencies and increase
competitiveness in the logistics sector. Cognizant of this need, thePhilippine government and the Logistics service providers developed
a roadmap dubbed “The Ten Commitments” designed to focus
on specific action agenda that should be pursued. These involve
streamlining, standards development, investments in logistics
infrastructure, and skills upgrade.

The logistics services sector is actively engaged with the public
sector. It envisions that:

By 2030, logistics services in the Philippines
shall be the most efficient, fastest, and thecost of which shall be one of the lowest inSoutheast Asia.

The e-Commerce Philippines 2022 Roadmap zeroes in on resolving
issues related to e-fulfillment and last-mile delivery services which
are faced with several challenges in fulfilling its commitments
to clients, such as lack of motorcycle couriers, worsening traffic
congestion, as well as heightened risks on the part of the courier due
to the cash-on-delivery payment system.

Ease of doing business

requirements, penalties, and taxation which affect the onboarding
for most gig workers.

Difficulties in compliance with various regulatory requirements
and procedures of government agencies remain a top-of-mind
concern among logistics providers. Varying business registration
policies on the local level, burdensome requirements, and obsolete
policies and procedures increase the cost of doing business. The
industry also mentions the need for government to determine theappropriate regulator. In the case of riders, the current draft of thePrivate Express and/or Messengerial Delivery Service (PEMEDES)
Guidelines, requires each messenger to have an individual
accreditation license from DICT.

Availability of digitally skilled workers
The development of any sector is driven by intellectual capital, or theability to foster the appropriate skills and training from technologicalto linguistic to entrepreneurship according to the APEC Digital
Prosperity Checklist (2010). The upskilling and reskilling of workers
not only foster industrial growth but also provide security for ourworkforce. With the rise of new technology, continuous learning andnew skill sets are needed to adapt.

Promotion of the gig economy

Fast-tracking of national ID system

Lack of government support for gig workers remains a primaryconcern in the logistics sector. The deficiency of benefits, training,and social safety nets such as life and accident insurance for riders
hinder growth and security within the sector. Stakeholders fromthe logistics industry have also raised issues on unclear regulatory

The need to ensure digital identities, as well as, a fully traceable andstandardized address is of primary concern across various sectors
and is not limited to the logistics industry. Government is therefore in
the process of fast-tracking the roll-out of the National ID system toimprove security and promote trust in e-Commerce.

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PART III: MADALI 2022

The e-Commerce Philippines 2022 Roadmap shall focus on:

Logistics Convergence Program
Convergence program with DTI, DPWH, DA, DICT, DILG, DOF, PHILPOST, LGUs to reduce cost, and improvelogistics performance in terms of (i) Speed, simplicity, and predictability of customs procedures, (ii) Qualityof trade and transport-related infrastructure, (iii) Competence and quality of logistics services, (iv) Ability to
track and trace shipments, (v) Timeliness of shipments in reaching the destination and (vi) avoidance of port
congestion.

Modernization of PHLPost
PHLPost is integral for small parcel delivery, especially for remote and isolated communities. As such, greater
partnerships with third-party logistics providers are needed to revitalize the system which would ultimately
improve logistics performance and reliability.

Private sector investments in logistics infrastructure
Promote investments in e-Commerce hubs/townships, especially for logistics and innovation centers.

Revisit the Regulatory framework
The World Bank report on the digital economy cites the need to achieve policy and regulatory clarity to help
attract private investments and innovation. Related to this is the need to review the regulatory requirements
for small parcel delivery providers to support e-Commerce, pursue the Public Service Act pending inCongress expected to have a positive impact in the logistics services sector, and push for the issuance andimplementation of e-Commerce provisions in the CMTA.

Business Matching between e-Commerce entrepreneurs and logistics services providers (LSPs)
The DTI espouses the practice of MSMEs tapping LSPs for logistical requirements allowing the professionals tohandle warehousing, inventory, trucking, shipping, packing, and delivery services more efficiently so the MSMEs
can focus on their own businesses. Linking MSMEs with LSPH will be a key intervention under the e-Commerceroadmap.

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PART III: MADALI 2022

Outcomes and Measures of SuccessThis roadmap aims to achieve the following major outcomes:
1.
2.
3.
4.

Increased contribution of e-Commerce to economic growth,More digitally skilled workers,
Increased number of e-Commerce entrepreneurs, andEmpowered online consumers
Outcome

Outcome 1:
Contribution of
e-Commerce to the
Economy Increased

Metric2020 Baseline

2021 Targets

2022 Targets% Share to GDP1

3.4%

4.3%

5.5%

Value in Php

Php 599 B

Php 850 B

Php 1.2 T

Outcome 2: Availabilityof digitally skilledworkers employed

Hiring Success Rate2

TBD based on 2021 Job
Outlook Survey3> 2020 hiring
success rate

> 2021 hiring
success rate

Outcome 3:
Increased numberof e-Commerce
enterprises

Number of e-Commerce enterprises 4

500,000 5

750,000

1,000,000

UNCTAD B2C Index Rank6

96 out of 152(Bottom half)

At least 75 out of
152 (Upper half)

Top one third (atleast 50 out of 152)

Gross Merchandise Value (GMV)$7.5 B7

$11 B

$16 B

+%

+%

Outcome 4:
Empowered Online
Consumers

Resolution Rate8•
DTI: Consumer Complaints Resolution
Rate•
PNP: Crime Solution Efficiency Rate•
PNP: Crime Clearance Efficiency Rate•
DOJ: Conviction Rate•
DOJ: Prosecution Success Rate

•
•
•
•
•

Notes:
1.
Gross Value of e-Commerce Forecasts and Targets REID Foundation
2.
Hiring success rate = number of trained/graduates over number hired. DTI/DOLE
to conduct job Outlook survey.
3.
Job Outlook 2021 Survey to be conducted4.
e-Commerce enterprises = E-retailers + online merchants
5.
Based on initial information from platforms
6.
UNCTAD B2C e-Commerce Index 2019 – ranks 152 countries in terms of (i)Account ownership at a financial institution or with a mobile-money-service

99% Consumer Complaints
Resolution Rate
45.61% Crime Solution
Efficiency Rate
50.82% Crime Clearance
Efficiency Rate
18.52% Conviction Rate
45.45% Prosecution
Success Rate

7.
8.

provider; (ii) Individuals using the Internet (% of population); (iii) Postal Reliability
Index; (iv) Secure Internet servers (per 1 million people) - Singapore (Rank 3/152);
Malaysia (Rank 34/152); and Thailand (Rank 48/152)
e-Conomy SEA 2020, Google, Temasek Holdings, Bain & Company
Complaints Resolution Rate: DTI Consumer complaints resolution; crime
solution efficiency; crime clearance efficiency; DOJ-National Prosecution Service:
Conviction Rate and Prosecution success rate

The evolving nature of data available poses a challenge to measuring progress from the previous e-Commerce roadmap. Given the limitations,key areas to monitor have been identified, some of which are regularly measured by global institutions. The formulation of other local metrics
will be coursed through the Philippine Statistics Authority (PSA) and will be part of this roadmap’s key initiatives.

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Our Mapped Future
Philippine e-Commerce Gross Value Forecasts(Immediate Impact of Roadmap by 2022)

Figure 33. e-Commerce Gross Value Forecasts vs. Immediate Impact of Roadmap by 2022
The future of e-Commerce depends on the concerted effort of major public and private stakeholders to implement and advocate for the
strategic initiatives outlined in this roadmap.
••
No Roadmap (Php 954 billion or USD 19.1 billion by 2022) –Without collective effort towards achieving the roadmap initiatives,
e-Commerce can still grow more than 59% its current value by 2022, oran average of almost 30% every year. This growth will be propelled by
the growing momentum towards digital trade of goods and services,heightened by the effects of the pandemic in the short-term.

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With Roadmap (Php 1.2 trillion or USD 24.2 billion by 2022)– With the complete and timely adoption of this roadmap,
e-Commerce could double its current value and induce faster
Philippine growth, potentially reaching Php 1.2 trillion or 11.4%
of GDP by 2022.

PART III: MADALI 2022

Long-term View•

No Roadmap (Php 3.9 trillion or USD
77.8 billion by 2030) – Without collective
effort towards achieving the roadmap
initiatives, e-Commerce can still grow
5.5 times its current value by 2030, or an
average of 21% every year, contributing
8.5% of GDP by 2030.

•

With Roadmap (Php 14.3 trillion or USD 285 billion by 2030) – Aggressive digitalizationof government services and MSMEs, expansion of logistics and telecommunications
infrastructure, the establishment of more integrated digital financial services, investment
in innovation, and the pursuit of an enabling business environment will play a huge role in
the advancement of both B2C and B2B components of digital trade. With all these factors
in place, e-Commerce could expand more than 22 times its current value, potentiallyreaching Php 14.3 trillion or 26% of GDP by 2030.

Philippine e-Commerce Gross Value Forecasts, by Type (B2C + B2B)
(Long-term Impact of Roadmap by 2022 - 2030)

B2B
B2C

Figure 34 Gross Value of e-Commerce Forecasts and Targets , Long Term Impact of Roadmap by 2022 - 2030, By Type (B2C+B2C)

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PART III: MADALI 2022

2020

2022

2025

2030

Value in Billion Php

599

955

1,972

3,889

Value in Million US$

11,97919,09539,44177,782% of GDP

3.4%

4.5%

7.0%

8.5%

Value in Billion Php

599

1,210

3,516

14,254

Value in Million US$

11,97924,19870,322

285,089% of GDP

3.4%

5.5%

11.4%

26.1%

Without the Roadmap

With the Roadmap

Maximum Growth Scenario with the Roadmap*
Value in Billion Php

599

1,754

7,188

39,991

Value in Million US$

11,97935,099143,764

719,815% of GDP

3.4%

7.7%

21.3%

55.3%

* This scenario was included to simulate most aggressive assumptions of favorable conditions for Philippine e-Commerce development, including acccelerated B2B adoption.

Table 26. Gross Value of e-Commerce Forecasts and Targets (in Php B, in US$ M, and as % of GDP)

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PART III: MADALI 2022

Conclusion and Call to Action
We have outlined not just a framework but concrete strategies andsteps that we can take in order to get to our envisioned future.
The government plays a lead role and must lay down everything
in its purview and power to facilitate all that has been outlined. It
must set an example by embracing its e-Government capabilities
and making available all its online services and infrastructure to
the businesses and consumers. The various government agencies
must be operating seamlessly and it must also be done online. The
government agencies must work together and see the same end. It
cannot just be an interconnectedness through the internet. It must
be an interconnectedness through vision and desire.

500 years ago, the Philippine Islands played a historic role in thecircumnavigation of the world. So to speak, this gave meaning to
the word globalization, in the geographical sense, and also in theeconomic sense. The arrival of the Spanish in the Philippines has
opened new frontiers for our people, and opportunities to growand develop our culture, commerce, and even networks. As wecelebrate the 500th anniversary of the circumnavigation of theworld, our role in it, and the establishment of our connection to theWest, we look forward to fulfilling our role in the next 500 years ofglobalization.
Taking the path towards a “MADALI” e-Commerce in the Philippines
is our way of fulfilling our role. We want e-Commerce andcommerce to be virtually indistinguishable. We want all businesses
to want to jump into e-Commerce and to make it MADALI for themto join. We want all consumers to make this part of their everyday
lives, to be more trusting and more active in online economic
activities.

The Filipino people must start trusting our systems again. The
Filipinos must keep on using our existing online platforms andinfrastructure, push it to its limits, test it, and contribute to its
growth and strengthening. We, as the people, must also see what
our government sees. We should be looking at the end goal--a fast,
convenient, easy commerce, an easy economy in the digital world.
We must repeat this aspiration as a mantra: “Basta e-Commerce,madali!” e-Commerce is easy commerce. We must continue to
speak it, act on it, and make it happen.

This roadmap can be seen as a single path towards that future that
we dream of only if all the stakeholders see and dream the same
dream. Everyone must understand how each of us plays a crucialrole in this ecosystem, this network. We have to trust each otherand push for the establishment of the structures and infrastructureneeded to make this happen.

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Acknowledgment and Roadmap TeamThe Roadmap Team wishes to express its heartfelt gratitude to representatives from various government agencies, professional organizations,development partners (USAID E-peso), and private sector representatives, especially from e-Commerce and technology platforms, logistics
companies, and payment providers, who participated in the series of consultation workshops and focus group discussions.
Your insights as stakeholders have provided us the technical, practical, and moral foundation critical to the completion of this Roadmap.
We look forward to our continued collaboration as we implement this Roadmap and forge a digital future for the Philippines.

Asec. Mary Jean T. Pacheco
Assistant Secretary for
Digital Philippines ande-Commerce Lead

Ms. Kristine AngelC. Cerva
Communications
OfficerDr. Victor A. Abola
REID Foundation/
University of Asia &Pacific

Prof. Ronilo M. Balbieran
REID Foundation/
University of Asia &Pacific

Ms. Maria Kristina
I. De Leon
REID Foundation/
University of Asia &Pacific

Ms. Yroen Guaya B. Melgar
REID Foundation/
University of Asia &Pacific

Ms. Wea C. Bohol
Supervising TradeIndustry
Development Specialist

Ms. Abigail E. Andrada
Trade-Industry
Development Analyst

Mr. Raphael Jose
M. Habana
Trade-Industry
Development Analyst

Mr. Alonzo Luis
P. Miranda
Trade-Industry
Development Analyst

Ms. Mikaellah Grace
Y. Vinluan
Trade-Industry
Development Analyst

Ms. Jarienill N. Cho
Senior Trade-Industry
Development Specialist

Mr. Lorenz Elbert
V. Garcia
Trade-Industry
Development Specialist

Ms. Cristy Lou
B. Olboc
Junior Researcher

Ms. Louise Antonette
T. Sandoval
Junior Researcher

Ms. Joy C. Lumanglas
Senior Trade-Industry
Development Specialist

Ms. Krizia A. Pajares
Trade-Industry
Development Specialist

Mr. Jude V. Leopando
Administrative Aide VI

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Photo Book
Kick Offs / Press Conference“Transition Review of the PECR 2016-2020 and Kick-off Event for the 2022 Roadmap”
The PECR 2016-2020 Transition Review was held at SM Aura on August 6, 2019. The representatives of the private sector
and policy makers assessed the status of the 53 Action Agenda of the PECR 2016-2020. This was also the Kick-Off event
E-Commerce Philippines 2022 Roadmap with updated 20 Strategies and 22 Action Agenda.

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Focus Group Discussions (FGDs)
As part of the Roadmap formulation process, a Focused Group Discussion with the e-Commerce ecosystem was conducted to identify
the key challenges and bottlenecks faced by the different ecosystem stakeholders: Digital Platforms, ePayment Gateways, andLogistics Service Providers. It was composed of 3 Breakout Session, participated by Digital Platforms, ePayment Gateways, Logistics
Service Providers, Service Seekers (Online Sellers/Merchants/Consumers), Service Providers (Advertising Companies, Banks, Financial
Institutions/TelCos), and Government Agencies.

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Brown Bag Brigade Sessions
A series of Brown Bag Brigade sessions were conducted with the e-Commerce ecosystem from
October 7 to 21, 2019. Issues on Online Piracy/Digital Media, Taxation, Consumer Protection,
Intellectual Property, Data Privacy, and Ease of Doing Business were discussed during these sessions.

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PART III: MADALI 2022

Brown Bag Brigade Sessions

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PART III: MADALI 2022

Brown Bag Brigade Sessions

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PART IV: ANNEX

e-Commerce 2022 Initiatives and Subtasks

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PART IV: ANNEX

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PART IV: ANNEX

Review of e-Commerce
Roadmap 2016-2020
Initiatives based on APEC Digital Prosperity Checklist
AGENDAOUTPUTSTATUSINTERNET ACCESS
1

National Broadband Masterplan

DONE

2

Updated Telecommunications Law and NTC Charters to be responsive to thedemands of users

ONGOING3

New telecommunications and value-added services investments (new players)

DONE

4

Implementation of RA 10667 of the “Philippine Competition Act”

DONE

E-GOVERNMENT
5

Government E-Payment Implementation PlanONGOING

6

Expansion of the National Public Key Infrastructure (PKI), Digital Certificates for
Public and Private Sector

7

Allow government agencies to purchase online using electronic payment

8

Rules on E-Notary

DONE

9

Digital Certificate/ PKI adoption in the Private Sector (including cross-bordermutual recognition)

DONE

10

Improve Internet Government Towards Trustworthy and Secure e-Commerce

DONE

11

Ratification of the United Nations Electronic Communications Convention

12

Guidelines for Cross-Border Mutual Recognition of digital signature,
e-communications, and contracts

DONE
ONGOINGONGOING
DONE

E-BANKING
13

Updated E-banking regulations to streamline the process of granting e-banking
licenses

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DONE

PART IV: ANNEXAGENDAOUTPUTSTATUS

E-PAYMENT
14

Updated E-Payment and E-Wallet Guidelines

DONE

15

Updated E-Money Guidelines

DONE

16

Enactment of Payment Systems Act

DONE

17

Implementation of National Retail Payment System

DONE

18

Updated DTI DAO 10-10 or the Guidelines on the Use of Access Devices for
Payment of Fees, Charges, Assessment, and Other Revenues due to thegovernment through e-payment and collection system of government entity

DONE

TAX SYSTEM
19

Guidelines on Online Sales Invoice and Official Receipt Issuance

DONE

20

Accreditation of Online Sales Invoice and Official Receipts applications for use of
the public

DONE

CONSUMER PROTECTION
21

Merchant and Consumer Compliant Online Dispute Resolution Process

ONGOING

22

Revised Consumer Act of the Philippines

ONGOING

23

Sales Promotion Guidelines for Online Promotions

ONGOING

24

Online Application, Approval, Payment of Sales Promotion Permits

DONE

25

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

DONE

26

BIR Certificate of Registration for Websites

ONGOING

27

Websites as a Business Branch (BIR Circular); (a) Different official receipt set fromthose use with physical stores, and (b) not necessary for entrepreneurs whosewebsite is its primary branch

ONGOING

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PART IV: ANNEXAGENDAOUTPUTSTATUSLOGISTICS
28

Philippine Trade Repository (serve as one-stop shop for information pertaining totrade and cargo clearance)

DONE

29

Implementation of National Single Window Project version 2

DONE

30

Amendment to EO 482 to make the use of NSW mandatory

ONGOING

31

ASEAN Single Window Framework

DONE

32

Pass the Customs Modernization and Tariff Act, which includes the increase in“de minimis value” for exemption from payment of customs duties from Php
10.00 to Php 100,000.00

DONE

33

Philippine Postal Corporation as “cash on delivery (COD)” pick-up points

DONE

34

Incentive Package for Digital Start-ups

DONE

35

Amendment of the Corporation Code to allow “One Person Corporations (OPC)”

DONE

36

FAQs to clarify which of the existing legislation or regulations are applicable for
specific types of e-Commerce businesses

DONE

37

Amendment of the Retail Trade Liberalization Act

INNOVATIONINVESTMENTS

ONGOINGINFORMATION FLOWDATA PRIVACY
38

Push for the Creation of Data Privacy Commission

DONE

39

Data Privacy Guidelines for the Government

DONE

40

Update DTI DAO No. 8-2006 or the Data Privacy Guidelines for Information andCommunications Systems in the Private Sector

DONE

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PART IV: ANNEXAGENDAOUTPUTSTATUSCYBERSECURITY
41

Cybercrime Online Reporting and Legal Assistance Network

DONE

42

Cybercrime Investigation and Coordination Center

DONE

43

National Computer Emergency Response Center

DONE

INTELLECTUAL CAPITAL
44

e-Commerce offerings in Colleges

DONE

45

Government training programs on e-Commerce

DONE

46

e-Commerce subjects in K-12 included in the entrepreneurship

FOR DISCUSSION

47

Cooperate with the APEC Business Advisory Council (ABAC) in identifying andpromoting strategic e-Commerce platforms and innovative business models
for MSMEs to support buying and selling activities (B2C), business matching
opportunities (B2B), and online-to-offline commerce (O2O)

FOR DISCUSSION

48

Implement capacity building in order to promote international networking
and to increase cross-border business opportunities for MSMEs by localizing/customizing ABAC’s Cross-Border e-Commerce Training (CBET) Programme andother similar platforms

FOR DISCUSSION

49

Encourage the availability of next-generation high-speed broadband/internet andpromote its widespread uptake and effective use by MSMEs

DONE

50

Identify and promote policies and regulatory frameworks for creating a
conducive environment for e-Commerce and address unnecessary regulations
that constrain the ability of MSMEs to participate in e-Commerce

INTEGRATIONONGOING

IMPLEMENTATION AND MONITORING
51

Establishment of an e-Commerce Promotion Council comprised of thegovernment and private sector

52

Establishment of an office dedicated to e-Commerce in DTI

DONE

53

Official e-Commerce indicators

DONE

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ONGOING

PART IV: ANNEX

Parameters for Forecasts
and Targets

e-Commerce with actions from theTable 10. Gross Value of e-Commerce Forecasts (US $ in Billion)

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81

PART IV: ANNEX

Maximum Growth Scenario*

WITH THE ROADMAPBASE CASE,WITHOUT THE ROADMAP

Detailed Philippine e-Commerce Gross Value Forecasts and Targets
Year

B2C - in Million Php

B2B - in Million Php

Total Value - in Million Php

in Million US$% of GDP

2020

479,164

119,791

598,954

11,9793.4%

2021

622,913

131,770

754,683

15,0943.9%

2022

809,786

144,947

954,733

19,0954.5%

2023

1,052,722

159,442

1,212,164

24,2435.2%

2024

1,368,539

175,386

1,543,925

30,8796.0%

2025

1,779,101

192,924

1,972,025

39,4417.0%

2026

2,045,966

212,217

2,258,183

45,1647.3%

2027

2,352,861

233,439

2,586,300

51,7267.6%

2028

2,705,790

256,782

2,962,573

59,2517.9%

2029

3,111,659

282,4613,394,119

67,8828.2%

2030

3,578,407

310,7073,889,114

77,782

8.5%

2020479,164

119,791

598,954

11,9793.4%

2021

694,787

155,728

850,515

17,0104.3%

2022

1,007,441

202,447

1,209,888

24,1985.5%

2023

1,460,790

263,181

1,723,971

34,4797.0%

2024

2,118,146

342,135

2,460,280

49,2068.9%

2025

3,071,311

444,775

3,516,086

70,322

11.4%

2026

3,992,705

644,924

4,637,629

92,753

13.4%

2027

5,190,516

935,140

6,125,656

122,513

15.8%

2028

6,747,671

1,355,953

8,103,624

162,072

18.6%

2029

8,771,972

1,966,132

10,738,104

214,762

22.0%

2030

11,403,564

2,850,891

14,254,455

285,089

26.1%

2020

479,164

119,791

598,954

11,9793.4%

2021

862,494

155,728

1,018,223

20,3645.1%

2022

1,552,490

202,447

1,754,937

35,0997.7%

2023

2,483,984

323,915

2,807,899

56,158

10.8%

2024

3,974,375

518,2634,492,638

89,853

15.1%

2025

6,358,999

829,221

7,188,221

143,764

21.3%

2026

8,266,699

1,326,754

9,593,453

191,869

24.9%

2027

10,746,709

2,122,807

12,869,515

257,390

29.3%

2028

13,970,721

3,821,052

17,791,773

355,835

35.5%

2029

18,161,938

6,877,894

25,039,832

500,797

43.8%

2030

23,610,519

12,380,209

35,990,728

719,815

55.3%* This scenario was included to simulate most aggressive assumptions of favorable conditions for Philippine e-Commerce development, including acccelerated B2B adoption.

Figure 33. Detailed Philippine e-Commerce Gross Value Forecasts and Targets (Without the Roadmap, With the Roadmap, and Maximum Growth Scenario)

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PART IV: ANNEX

Total e-Commerce Value (DTI)& Internet Economy (Google)

Figure 35. Total e-Commerce Value (DTI) and Internet Economy (Google)

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PART IV: ANNEX

Impact of the e-Commerce Roadmap,
and Feedback Effects

Figure 36. Impact of e-Commerce Roadmap, and Feedback Effects

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PART IV: ANNEX

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