• Lezo MPC's Champion, Aklan's Pride

    AKLAN – She served the National and Local Government as a dedicated, hardworking Municipal Agriculturist Extension Worker of the Municipality of Lezo for 42 years, before she retired in 2010.  And Emelinda Revestir-de la Cruz has proven herself to be Read More
  • COOP-NATCCO Partylist guns for 3 seats

    All cooperative members, leaders, staff, management and stakeholders are reminded to support COOP-NATCCO Partylist (CNPL) in the upcoming 2019 Elections.  Support is through – voting, campaigning, or providing finances and logistics.   The CNPL, since 1998, has endeavored to protect Read More
  • Ravanera, Chinese Counterpart Sign Agreement

    The Cooperative Development Authority (CDA) represented by Chairperson Orlando R. Ravanera and the Ministry of Agriculture and Rural Affairs (MARA) of the People's Republic of China represented by Han Changfu, signed a Memorandum of Agreement (MOU) for the Strengthening of Read More
  • Financial Pillar Shows Challenges & Hopes of Co-ops

    DAVAO CITY – One of the highlights of the 14th National Cooperative Summit was the Financial Pillar Presentation.  The Financial Pillar is considered to be the most “liquid” sector of the cooperative, delving into financial services.   The Finance Pillar Read More
  • How Lamac MPC Engages Youth

    DAVAO CITY - Co-op Youth Leader Justine Limocon of Lamac Multi-Purpose Cooperative in Cebu Province, spoke at the Cooperative Summit before more than 3,000 co-op leaders from all over the country, urging them to engage the youth in their cooperatives.   Read More
  • NATCCO GA on April 26-28 in Iloilo City

    ILOILO CITY – Representatives of member cooperatives of the NATCCO Network will converge in Iloilo City on April 26-28 for the 17th Coop Leaders Congress and the 42nd General Assembly.  Venue is the Grand Xing Imperial Hotel.   This year’s Read More
  • Coop Philippines Marque Launched at 14th Summit

    DAVAO CITY – To establish the co-op brand and identity in the country, the Co-op Sector launched at the 14th National Cooperative Summit the Co-op Marque Philippines.   This is in line with International Cooperative Alliance thrust for “Vision 2020”, Read More
  • Dr. Luis Carrillo: Bigay Pugay Awardee 2018

    Dr. Luis Carrillo sought wisdom from the written divine revelation, fascinated with numbers, and believed cooperation is the key to attain better quality of life for humanity.    He obtained a Diploma in Pastoral Theology from International Grace Bible Institute Read More
  • ICA Backs Zero Tolerance for Harassment & Discrimination

    BUENOS AIRES – The cooperative movement has approved a formal commitment towards the promotion of a decent working environment and zero tolerance for any form of harassment. The fact that a global actor like the International Co-operative Alliance (ICA) commits Read More
  • Felisa Palencia: Bicol Region’s Bigay Pugay Awardee

    BAAO, CAMARINES SUR – An educator and training provider, Director Felisa M. Palencia has been instrumental in the training and education of the cooperators in this Municipality. She has been a member of the Baao Parish Multi- Purpose Cooperative for Read More
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Let's Get Digital!

USAID’s Mamerto Tangonan gave a talk entitled The National Retail Payment System & the Digital Finance Landscape in the Philippines, delivered at the NATCCO Co-op Leaders Congress in Limketkai Luxe Hotel in Cagayan de Oro City for all co-ops to adopt the Kaya Payment Platform. 
 
Whether we like it or not, millennials will soon take over key leadership positions in our organizations.  One of the attributes of our millennials is that they are so ‘digital’.  If we want to attract them as members, we have to generate, otherwise our co-ops will die.  If you want to attract them, then going digital is certainly the way for us to go. 
 
Why is Digital Payments important?
 
It drives economic growth.  McKinsey Global Institute studied five growth economies and found that digital payments alone can drive Gross Domestic Product by up to 6%.  Digital Payments makes other business models possible – like thru internet.
 
Cash under mattresses are not in the banking system, so they cannot be lent out for other productive activities.  The theory here is the multiplier effect of money.  Money in the bank can be re-lent and re-lent.  Labor productivity is also increased due to the increased convenience.
 
The Asian Development Bank estimates that transition digital payments result in more financial inclusion and could boost Gross Domestic Product (GDP) by an additional 3%.  That is why the Bangko Sentral ng Pilipinas (BSP) targets digital (non-cash) transactions, currently at 1%, to 20% by 2020.  They want to shift from cash payments to “cashlike”.
 
Digital Payments also have social benefits. Digital Payments are believed to meet 11 of the 17 Sustainable Development Goals of the United Nations.
 
Data in 2012, the Better than Cash Alliance said out of of 2.5 Billion transactions monthly, only 1% are digital.  2014 data by the World Bank reported that the Philippines is at 2%.  Malaysia is 10%.  Let’s not even talk about Singapore!  We are being left behind.  
 
According to the Better than Cash Alliance,  the strategy that made impact in other countries is to start with disbursements.  This means governments and businesses should be paying their suppliers, creditors and employees using electronic payments. That will cause more people having more electronic money in their accounts.  Eventually, its use will spread even to small transactions.
 
In 2016, from a survey of 2,200 Filipinos we found that 73% pay for household bills and purchase goods and services, buy cellphone load, receive and send money.  81% are aware of electronic payments. 23% of those who are aware actually use digital payments.  But only 17% use it actively, or once in 90 days.
 
We also found that 60% intend to use Digital Payments.  In marketing thought, if there is intent, adoption will follow soon.
  
The Digital Payments landscape in the Philippines is developing quite rapidly.  You have the opportunity to take advantage of it because your confederation is offering you the platform.  Take advantage and offer it to your members.  There is evidence that the market is ready for digital payments – 60% of people already intend to use it and 63 million of them use smart phones.  
Millennials want to go digital.
 
Because if you don’t offer it . . . and there is already the National ID system, the banks going down to the grassroots, plus the existence of global money operators who are very aggressive (there are already 11 million mobile accounts in the Philippines), co-ops will be left behind.
 
In other words, the people have alternatives.  If you don’t offer it, they will get it from someone else.  If they get it from someone else, what else can you offer the people?  Co-ops will become marginalized.  
 
You have to take responsibility for that!
 
The Philippines is moving fast towards digital payments.  Your confederation is already providing you the platform.  The market is there.  
 
Once you are plugged into the National Retail Payment System or Highway, any person from anywhere in the Philippines can send money to the regions.  I can transfer from my bank account to a cooperative account.  
 
On the question whether Kaya Payment Platform for digital transactions will work in the provinces: It will!  In terms of practicality, there may be trade-offs.  For instance, for small amounts, cash is probably best.  For big transactions and long-distance transactions, digital is better.  But in a recent trip to Europe, I saw people purchase small items using credit cards or electronic money.
 
In some areas in the Philippines, there is no internet and no electricity so it will be very difficult to transact digitally.  But we need to be patient because this is a journey. Europe and Malaysia did not implement digital money overnight.
 
On data security, even big banks have security threats.  How can co-ops cope?  There is cybercrime . . . the provider is responsible to make sure that the service is secure.  The BSP issued Circular 982 for the cyber resiliency framework of the digital financial ecosystem.  
 
I am working with the BSP on this.  If we comply with the framework, which is based on international standards, your provider will be responsible for security.  
 
When can we catch up with Europe?  That depends on you.  The medium term goal of 20% target for digital transactions in the Philippines -- that’s the Tipping Point.  It’s like you drive a truck uphill and that uses up a lot of power.  Once it’s uphill, it will accelerate.  So let’s work together to reach that goal.  Once that goal is reached, digital transactions will move forward and have a life of its own.  There’s reason to be confident because the innovation cycles now are much faster and shorter.  New products come and go.  If people were taking decades to invent things in the past, now it just takes a few months to launch a product.
 
We may not necessarily take decades to achieve what other countries have achieved in digital transactions but let’s just work for it.
Puwede ba talaga pumasok ang kooperatiba sa clearing houses?  I strongly believe that co-ops have a distinct advantage because of your membership system.  With the banks, it’s a customer-provider relationship.  But in co-ops, you have members with a “common bond”. That is stronger.
 
In terms of service quality, price and other attributes, I will patronize my cooperative first because I am part of the co-op.  
 
So please adopt the Kaya Payment Platform in your co-op!

 

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