Bayan Family of Foundations hosts forum on Internet Transactions Act

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“If business registration becomes too restrictive, it runs the risk of losing the advantage of ecommerce, which is its low barrier to entry.”

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QUEZON CITY, Dec. 7, 2022 – Bayan Innovation Group (BIG), Bayan Academy, and Bayan SEARCH hosted a forum entitled “ITAlakayan para sa Bayan” to tackle the implications of the Internet Transactions Act (ITA) and to provide a space for Micro, Small and Medium Enterprises (MSMEs) to voice out their perspectives on the proposed bill.

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In essence, the ITA seeks to promote the growth of eCommerce by building trust among online sellers and consumers. One way to achieve this is by requiring online merchants to register their enterprises in the proper regulatory agency. Ideally, registration will protect consumers from purchasing bogus products online. In turn, online merchants are warranted against fake buyers as the bill imposes multiple forms of sanctions against both parties, as well as on courier services. The ITA also seeks to impose joint and solidary liability on both the seller and courier should the products arrive in substandard condition. An E-Commerce Bureau shall be established under the DTI to supervise the implementation of the act. The Bureau will also introduce an online dispute resolution mechanism to facilitate the mediation of these issues.

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The event was kicked off by Kim Lato and Yolanda Lopez, CEOs of Kimstore.com and Ellex’s RTW shop, who shared their journeys as business owners and how they were able to capitalize on digital platforms to build their community. This was followed by Trish Lim-Francia of Woven, who gave a workshop to the micro-sellers on how to use social media to grow their brands online.

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Also in attendance were Atty. Charlemagne Chavez and Atty. Gino Gerodias of ACCRA Law, who briefed participants on the current status of the ITA. They shared that the current bill has two versions being revised in the Senate and House of Representatives. One point of variance they noted was the more stringent registration process in the House of Representatives’ version. In the version of the Lower House, online sellers would be required to submit various government permits as a prerequisite for registration. These requirements vary depending on whether the seller is a one-person corporation, sole proprietor, partnership, corporation, or cooperative. In contrast, the Senate version will accept valid IDs.

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Cynthia Dela Cruz, Division Chief of DTI-BSMED, acknowledged the noble intention of the ITA, but stressed that registration must first and foremost be easy for online merchants to comply with. This was echoed by Paolo Olis, General Manager of Online Micro Sellers Multipurpose Cooperative (OMSMPC), who saw great promise in the ITA, but recognized the possible challenges it could bring to micro-sellers. He recommended that a simpler set of requirements should apply to smaller enterprises who are not yet financially leveraged to secure government permits.

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Vini Salonga, an accountant and a Managing Partner at ATBP Co., shared that start-ups usually venture into eCommerce due to the low barrier of entry. If stringent requirements are imposed, then MSMEs might be deterred from venturing into online selling, given that one of their biggest concerns is compliance, especially for tax purposes. “Registering a business is a commitment, and for some of them, they go into eCommerce because they want to test the waters. Yung iba diyan, lakas ng loob ang puhunan. It entails a type of discipline that not everyone has," Vini explained. SEARCH Executive Director John Xavier Francia concurred, saying, “If it were easy, everyone would register.” Olive Parilla, President of PATAMABA – an association of informal workers - shared the same sentiments and pledged that the ITA would be among the principal matters for discussion when the association next convenes.

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Given that the ITA has been dubbed a priority legislation, its potential impact on the digital economy is becoming more imminent. Following the panel discussion, the participants agreed to take a more active role in informing micro-sellers of the implications of the ITA. Finally, they stressed the need for continuous and frequent dialogue with Congress in drafting the ITA’s Implementing Rules and Regulations.  For its part, BIG will be publishing a white paper by February 2023 regarding its position on the proposed bill. This paper will also synthesize the concerns of MSMEs, start-ups and informal sellers on the ITA.

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