Finance Secretary Carlos Dominguez III and Jack Ma recently discussed ways on how to empower micro, small and medium enterprises (MSMEs) in the Philippines through affordable electronic commerce innovations pioneered by this Chinese magnate in his multibillion-dollar Internet-based selling platform Alibaba.
In their meeting in Malacanang, Dominguez also thanked Ma for acting swiftly last March on the Philippine government’s request to take down advertisements of digitally printed fake cigarette tax stamps in Ma’s Alibaba.com and AliExpress sites.
The request to take down the ads was in line with the campaign of the Department of Finance (DOF) to combat the proliferation of counterfeit cigarette tax stamps and illicitly traded tobacco products in the Philippine market.
Dominguez said he, along with several DOF and Bangko Sentral ng Pilipinas (BSP) officials, will meet with Ma again in China next year to hold more extensive discussions on how to ensure an “enabling” financial regulatory environment for e-commerce growth in the Philippines, with MSMEs as the primary beneficiaries.
“We are planning to visit him. He invited us to have further discussions in China. We will visit him probably in January with Central Bank (officials). We’ll review the regulatory environment here so that we don’t have regulations that choke the growth of e-commerce,” Dominguez said.
The BSP, along with industry stakeholders, jointly launched the National Retail Payment System in December 2015 to create a safe, efficient and reliable electronic retail payment system in the country.
In March this year, the BSP came up with two electronic fund transfer payment schemes–the Instapay, which caters to MSMEs, and PESO Net, which supports the bulk payment transactions of large companies.
“We must look at our (financial) regulations and ensure that it will not stymie the growth of our MSMEs,” Dominguez said.
Ma, who began his $23-billion business empire in his small apartment in Hangzhou, China, told Dominguez during their meeting that he wants to help develop the digital market in the Philippines to create a cashless society and connect the country’s e-commerce markets to other markets in Europe, China and other countries across the globe.
Ma said he wants to assist developing countries like the Philippines in building their digital technologies so that even small enterprises can benefit from globalization.
He also informed Dominguez that he intends to invest in the Philippines in the next five years, most likely in the country’s service industry. “The Philippines has the best service and has the heart to become key players in the industry,” Ma said.
Also in the meeting with Ma were DOF Undersecretary Antonette Tionko and BSP Deputy Governor Maria Almasara Cyd Tuaño Amador.
Dominguez said Ma also told him about his “3-1-0” initiative, in which budding entrepreneurs in China can borrow up to $5,000 online in a matter of minutes—three minutes to process the loan, one minute to get the money transferred to the borrower’s bank account, all done with zero human contact.
In terms of the loan-loss rate, Ma informed Dominguez that the online “3-1-0” program incurs a loss of only $4 out of $10 million as against $10 out of $100,000 for loans processed with human contact involved.
Dominguez said such e-commerce innovations pioneered by Ma, along with building a logistics backbone for MSMEs in the country, are now being explored by the DOF to help empower micro and small entrepreneurs and prepare then for the e-commerce revolution.
“Ma told us about the power of e-commerce. Today’s millennials are more comfortable doing digital transactions rather than physical transactions. He said that this is the way to the future. The whole point of the matter is if you have a digital platform like that you develop a lot of information that you can use in giving loans, and even in providing security information to the police,” Dominguez said.
The ubiquitousness of mobile phones in the country appears to be a good start for Ma, as he believes that all you need is this device and an Internet connection to be able to buy and sell online.
He said during the meeting that “there are three things that young entrepreneurs need: Electricity, water and Internet.”
Ma’s online retail giant, Alibaba.com, has provided millions of small businesses an e-commerce gateway in which to sell their products across the globe.