Manila, Philippines – The coronavirus pandemic has disproportionately and negatively affected female entrepreneurs in the Philippines, underscoring the need to arm them with digital know-how and access to finance in order to survive.

A report prepared by the International Finance Corp. (IFC), a sister organization of the World Bank, in partnership with online sales platform Lazada, said sales of women-owned businesses in the Philippines fell 27% in 2020 after tough times. caused by the economic recession induced by the pandemic.

Two-thirds of sellers in the app’s Filipino market were women, who ventured into online selling last year because they lost their office jobs due to economic hardship or were forced to find ways to increase declining family incomes.

The report states that in 2019, women sold more than men in terms of gross value of goods (GMV). However, the average GMV of female businesses fell from 106% of male businesses before the pandemic to 79% of men during the pandemic.

Digital skills

“The decrease in the average GMV of women compared to men in the Philippines was consistent with a growing body of evidence showing how COVID-19 has negatively impacted female entrepreneurs. Considering the relatively high share of female-owned microenterprises active in Lazada in the Philippines, it is clear that supporting women-owned businesses to regain parity or surpass men’s GMV is crucial for the growth of e-commerce in the Philippines. Said the IFC.

He added that online businesses run by women in the Philippines could compete better and level the playing field if they have the necessary skills required in digital sales and access to credit.

However, 61 percent of women in the Philippines still do not have a bank account and are not part of the formal economy, the IFC said. As such, they could not avail themselves of, for example, government loans and grants to registered businesses.

“It is important to further extend financial services to women through agent banking, mobile banking, e-money and fintech that extend the reach of the financial system to provide women with better access to money. digital economy, ”said the IFC.

Personal savings

Most Filipino entrepreneurs relied on their personal savings to start their own businesses, according to the IFC report. But once their pockets were empty, women-owned businesses in the Philippines unfortunately turned to borrowing from informal lenders such as loan sharks.

The only bright spot in the IFC report is that women entrepreneurs in Lazada in the Philippines obtained insurance coverage more often than men.

“These above-average results for women-owned businesses may indicate that women selling on e-commerce platforms are more financially sophisticated than the market as a whole,” observed the IFC.

He said equipping Filipino women with digital tools and skills would enable them to capture a significant portion of the booming e-commerce industry over the next five to ten years.

Filipino entrepreneurs may be better off than men. “Women with families can run their stores and take care of their children. This is a big advantage for someone like a new mom who doesn’t quite have the mobility to work outside the home full time, ”said IFC citing Abigail Chen, founder of start-ups Homie. .ph and MyBento.co.

Bullish outlook

IFC has projected that the Southeast Asian e-commerce market could grow by more than $ 280 billion between 2025 and 2030 by increasing the number of women selling on online platforms and providing them with better training and support. better financial support.

Lazada Philippines General Manager Ray Alimurung said e-commerce penetration is still quite low in the Philippines and there is more than enough room for healthy competition.

He said it was the growth of the digital economy that would help platforms operating in the Lazada app grow, as the popular saying goes “a rising tide will lift all boats”.

The IFC said that if the internet economy in the Philippines accounted for only 2.1% of gross domestic product (GDP) in 2019, it is expected to grow by 30% per year and reach $ 28 billion by 2025.

However, the sector faces many obstacles. “Vendors in the Philippines operate in a difficult environment for delivery logistics, transporting packages across a vast archipelago of scattered islands. In addition, the majority of e-commerce and Internet use is concentrated in urban areas, which deepens the rural-urban divide, ”according to the IFC.

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