DIGITALIZATION + COOP RESILIENCY = THE NEW NORMAL

DIGITALIZATION + COOP RESILIENCY = THE NEW NORMAL

Thanks to the existence of online platforms, some of the stakeholders in the cooperative movement were able to connect thru a digital forum.  On May 4, 2020, the webinar entitled PH Coops: Resiliency in Now Normal was held in partnership with RCBC, one of the country’s leading commercial banks and financial institutions.

artnering with RCBC in the hosting of this online seminar were the Philippine Cooperative Center (PCC), 1 Cooperative Insurance System of the Philippines (1CISP), National Confederation of Cooperatives (NATCCO) and MASS-SPECC Cooperative Development Center (MASS-SPECC). The presentors were Lito Villanueva, EVP/Chief Innovation and Inclusion Officer of RCBC and Chairman of FintechAlliance.ph and RCBC Chief Economist Michael Ricafort. Reactors from the coop movement were 1Coop President and CEO Roy Miclat, NATCCO CEO Sylvia ‘Ibing’ Paraguya and Ann Cuisia, Founder and CEO of Traxion Tech, Inc.

In his presentation, Mr. Villanueva noted how going online has become the lifeline of Filipinos, as opportunities for clients utilizing IT refinements such as remittances continue to be on the rise. He also presented a diagram which depicted the realities of living in a COVID-19 scenario: the Fear Zone (where people spread emotions of fear, anger and complain frequently) the learning Zone (where one knows how to identify/rationalize emotions and use proper logic, as well as living within ones’ own means) and the Growth Zone ( where one develops empathy, makes use of his/her mind in the most productive and creative ways he/she can do, devises ways and means to adopt to changes,  and keeps a happy and emotional state by spreading hope).

Beyond that three-zone chart Mr. Villanueva observed how Filipinos will have to adopt also to changing scenarios, especially with a services-oriented culture that values person-to-person interaction whereas they are also expressive by nature via what he may call the High-Tech, No Touch syndrome which, for many may take time to get used to. Yet he remained upbeat on the vast opportunities that cooperatives present, as IT enhancements help improve their financial operations through constant education and digital literacy campaigns. Coop matters-wise, he cited that as part of its ECQ Digital Quick Win campaign, RCBC entered into an MOU on Damayang Sambayanihan: Hatid Ayuda Sa Kababayan with RBAP, NATCCO, MASS-SPECC and Bayad Centre on SAP (Social Amelioration Program).

A grim economic scenario was presented by Mr. Ricafort, who cited very slow growth rates where P1 trillion in total economic losses could completely erase the Philippines’ GDP growth of at least 5 to 6 percent which was experienced pre COVID 19—with around 1 percentage point for every P200 billion in total business/economic losses. He also cited  sectors most vulnerable to this economic downturn: airlines and other transport/transfer companies; Hotels/tourism and events services industries that include convention bureaus, sports and concert/performing arts venues; F&B/catering establishments; malls and retail sectors; manufacturers of non-essential goods as well as gargantuan multinationals that consider China as their major market; OFWs who lost their jobs due to the lockdown; and workers and businesses that lost jobs, incomes and livelihood.

Yet he also cited measures being undertaken by the government that will help ease the drastic impact of losses incurred during the lockdown: these include recent measures implemented by the Bangko Sentral Ng Pilipinas (BSP) that may directly/indirectly benefit MSMEs, namely:

—new loans that will be included in banks’ computation of reserve requirements;

—surprise -0.50 cuts in local policy rates, to a record low of 2.75 percent for the key overnight borrowing rate, effective April 17, 2020, with possible rate cuts in the near future;

—200 bps cut in large banks’ RRR effective April 3, 2020 to 12 percent, with P200 billion infused into the banking/financial system, with possible further 200 bps RRR cuts in the near future; and

–the reduction of the minimum liquidity ratio of stand-alone thrift banks, rural banks and cooperative banks to 16 percent, from 20 percent, effective until the end of 2020.

He also cited the need for businesses to adopt more and more IT enhancements that can prove to be beneficial in the long run, especially to correct the imbalances created by social distancing.

During the open forum that followed, 1CISP’s President Roy Miclat foresaw opportunities that cooperatives will experience in serving their members, with the challenge being where these entities will get their funds. With the gradual digitalization of the economy, Mr. Miclat also noted a stronger digital transformation in five years.

With 70 percent of cooperatives being small, he also noted the opportunity if these will partner with their bigger siblings as this will enhance shared/pooled resources. More cooperation between big and small coops, he stressed, will provide that effective link that extends from the communities they serve to the local and national economies as well. In terms of 1CISP’s digitalization process, Mr. Miclat added that there are several platforms that serve the needs of individual members while, at the same time, generating revenues for them.

The need to go digital was enthusiastically supported by Engr. Paraguya who described how the NATCCO experience—with 5.8 million members—adopted to IT way back in 2006, and is a continuing process. She also cited how she was very happy to see that during disasters, cooperatives are guided by their values and principles also to be of service to the communities that they serve.

What she considered a downside that could hinder the democratic principles that cooperatives espouse, particularly in a scenario where mass gatherings/events are temporarily banned in the name of social distancing, the digitalization of annual general assemblies, which will have to be conducted virtually. Ditto with board meetings and other gatherings which can mobilize cooperators via text as well as social media.

Au contraire, she also observed how cooperators, which include seniors, are adopting to these changes; Ms. Paraguya also mentioned  that in addition to digital literacy as that prerequisite for the ‘new normal’ there is also the need to further instill among cooperators, individually and as a cohesive group,  entrepreneurship training, good nutrition and good health. Not to be outdone, in the spirit of cooperativism with compassion, she proudly cited the Bayanihan-Musikahan project, a concerted effort of PBSP, NATCCO and MICOOP by being an inclusive food supply chain where 5,600 packs of vegetables, rice and dried fish were distributed to communities in Metro Manila.

“In the end, mankind will overcome,” she graciously summed up.

For her part, Ms. Cuisia observed the sad reality of the Covid-19 pandemic as a stumbling block towards full digitalization; yet she affirmed that thanks to its drive and determination, the coop movement will embrace all these innovations. With these IT refinements, there will also be that challenge vis-à-vis investments, but the way technology engages people, coop members and the community at large will be a godsend for all those who avail of it. She also presented how the digiCOOP platform works in Cooperative Management System from Marketplace Transaction and Loan Application to E-learning and Election Modules.

According to an online survey conducted after this seminar on whether coops are ready to fully embrace digital transformation vis-à-vis the COVID 19 situation, 39 percent feel that only half of the cooperatives will be ready. This contrasts with 35 percent who answered that it is a majority, but not all, and 13 percent who both voted absolutely at 100 percent and not at all. A second online poll, which asked what are the perceived challenges/barriers encountered by coops in adopting digital, 30 percent responded with the need for technical expertise from coops; 27 percent cited technical infrastructure, 22 percent huge investments, 15 percent Coop Board approval and 5 per cent regulatory challenges.

True, if we analyze those online surveys, there will be some bumps to be encountered in making the transition from person-to-person to virtual. Congruent to this, also hard to accept as it may be, is to adopt a totally different approach in conducting business that will replace genuine person-to-person encounters. Though there is not a set, step-by-step textbook formula on how businesses and entities such as cooperatives may combat the economic repercussions triggered by this pandemic, the need to go digital will definitely be the new norm as more and more people in the movement get connected online. Indeed, in the long run the benefits will outweigh all the doubts.