Finance Secretary Carlos Dominguez III sees a strong government-private sector partnership helping the Philippines breach the digital divide and achieve President Duterte’s goal of financial inclusion for all Filipinos as the country adjusts to the rapid changes in the emerging new economy.

The government has always encouraged a close working relationship with the private sector in the implementation of its digitalization efforts, knowing fully well that the private sector’s expertise and initiative to adopt digital innovations will help the country anticipate the changes in the digital economy, Dominguez said.

He said the experiences of countries in this COVID-19 pandemic underscore what the government already knew: that economies will have to quickly adjust to the trajectory of modern digital technologies if they are to remain viable.

With digital technology having the most significant impact on finance, Dominguez said the government encouraged the rapid adoption of financial technologies (Fintech) in the country by putting in place a liberal regulatory environment to enable these digital tools to flourish.

“The private sector can help us provide a more nurturing policy environment for FinTechs. I am confident that a strong partnership between the private sector and the government will help the Philippines breach the digital divide and achieve President Duterte’s goal of financial inclusion for all Filipinos,” Dominguez said at the kick-off event held Friday (July 23) for the virtual Digital Pilipinas 2021 Festival.

Dominguez and Trade Secretary Ramon Lopez were invited to speak at the event.

The festival, which was launched by GeiserMaclang Communications Inc. (GMCI) in partnership with the Monetary Authority of Singapore, will culminate in November 2021 with the Philippines’ participation in the Singapore Fintech Festival—the largest Fintech event in the world so far.

Dominguez said the Philippines’ greatest advantage in rapidly adopting to Fintech is its tech-savvy and young workforce that can provide the intellectual capital needed for Fintech-focused investments and enable the country to rapidly transition to the new economy.

On the part of the Department of Finance (DOF), Dominguez said the government’s main revenue agencies under its wing have fully embraced digitalization with the help of the private sector.

Both the Bureaus of Internal Revenue (BIR) and of Customs (BOC) have set up a number of e-payment and e-filing channels to improve tax collection and administration, curb corruption and enhance the business climate in the country, Dominguez said.

He said these digital transformation initiatives by the BOC and BIR have proved crucial to the collection of revenues when COVID-19 struck.

For instance, 90 percent of annual income tax returns (ITRs) were filed electronically last year, while almost 100 percent were also done online this year, which are considered major breakthroughs, given that only 10 percent of the country’s taxpayers made use of digital tools to file their income taxes in 2015, before the Duterte administration took over, Dominguez said.

On top of these digitalization initiatives at the revenue agencies, the government has also rolled out its national digital ID system to further hasten the transition to e-governance and transform how public services are accessed and delivered in the country, he said.

The government also launched mobile applications that allow small investors to buy and sell Philippine retail treasury bonds (RTBs) using their smartphones and other digital devices.

It also transformed the Overseas Filipino Bank (OFBank) into the Philippines’ first branchless digital-only bank in the country’s history to fulfill President Duterte’s campaign promise in 2016 to create a bank that caters to overseas Filipinos and help the country leapfrog to the digital economy, Dominguez said.

He said the DOF is also developing a cost-effective strategy to shield financial systems from potential cybersecurity threats and safeguard all investors from fraud and privacy threats.

The Bangko Sentral ng Pilipinas (BSP), for its part, is spearheading reforms to provide a regulatory environment that promotes an efficient, inclusive, safe and secure digital payments ecosystem, Dominguez said.

In these digitalization efforts, Dominguez said the government has also partnered with development institutions and other countries such as South Korea in developing an electronic invoicing system; the United States Trade and Development Agency (USTDA) in improving the BIR’s digitalization strategy; the Russian Federal Tax Service in possibly replicating its highly efficient value-added tax (VAT) tracking and collection system; and the World Bank (WB) in supporting the BOC’s Customs Modernization Project.

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