Filipino enterprise owners share experiences and lessons in responsible wage digitization

The ILO’s Global Centre on Digital Wages for Decent Work and the Employers Confederation of the Philippines (ECOP) hosted an engaging series of knowledge-sharing webinars, bringing together the participants of the Training on Responsible wage digitization for small enterprises in the Philippines. During the sessions held in September and October 2024, owners and finance/payroll staff of various micro and small enterprises (engaged in hotel services, food & beverage, and food packaging from Davao, Rizal, and Cebu) shared their insights in their journey to transition from cash to digital wage payments. They discussed the steps they have taken since attending the training, the results of their efforts, and the challenges they encountered in the process.

The discussions brought forth key insights into what drives the successful transition to digital wage payments for micro and small enterprises. It was highlighted that the commitment of enterprise owners and management is crucial to push the transition and get it done in a responsible manner. This commitment involves a proactive approach: evaluating digital wage payment options, engaging financial service providers to identify the right solutions, and supporting workers throughout the entire process.

Participating enterprises emphasized that supporting  workers in the transition to digital wage payments, especially given their hesitation over costs, requirements for opening and maintaining an account, and digital literacy. It was stressed that owners and the management must listen to their workers and assist them, particularly in obtaining necessary identification (such as the Philippine national ID) and other documents to open bank or e-money accounts.

Exploring the available digital wage payment options for the enterprise and its workers was also underscored during the discussion. One enterprise owner was pleasantly surprised to learn their bank’s digital payroll service was free due to their active business account. Others noted the importance of banks or ATM accessibility and choosing the most cost-effective option. Some businesses have adopted a mixed payment system, paying some workers via bank accounts and others through e-money, considering both cost and worker preferences.

Consumer protection and cybersecurity were also key topics. Participants expressed  concerns about online scams and phishing, stressing the need for businesses to protect themselves and support workers in staying safe. They emphasized that these issues should be essential to digital and financial literacy, urging government agencies, FSPs, and employers organizations to continue promoting them. 

The final webinar, livestreamed by ECOP, featured speakers representatives from the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, and GCash, the country’s major e-money issuer, who discussed digital wage payment options and how to leverage them for better financial well-being for both enterprise owners and workers.

BSP emphasized that digitizing wage payments encourages account ownership and benefits businesses by boosting productivity and cost savings, ensuring safe and accurate payments, improving access to finance, and supporting enterprise formalization. It also pointed out that enterprise owners could use basic deposit account for their workers, as this only requires one ID and no more than 100 Philippine pesos ($1.71) to open, with no maintaining balance. More importantly, the BSP highlighted that owning a financial account is a crucial step towards financial health and resilience for both business owners and workers.

The BSP discussed recourse mechanisms for digital payment users under the recently enacted Financial Products and Services Consumer Protection Act, which ensures equitable and fair treatment, disclosure and transparency of financial products and services, protection against fraud and misuse, data privacy and protection, and timely complaint resolution.

GCash highlighted its PowerPay+ service, which offers a secure, flexible and easy-to-use digital payroll solution, with no maintaining balance required and 24/7 access on any device. Given its widespread use in the country for payments, such as for bills and suppliers, GCash provides a convenient choice for local businesses.  In addition, users can access in-app nano-loans, open savings account, and get insurance – all of which could help improve their financial resilience.

The knowledge-sharing webinar series served as a platform to further advance the responsible digitization of wage payments, engaging training participants, micro and small enterprises and key actors in the Philippines, in insightful dialogue and experience-sharing. 

The ILO’s Global Centre on Digital Wages for Decent Work, together with ECOP and other key stakeholders, is committed to supporting the transition to responsible digital wage payments while also promoting respect for workers’ rights in the Philippines.