Opening address at the “From cash to digital wage payments: a win-win for enterprises and women workers in the Philippines”

By Mr Khalid Hassan, Director, ILO Country Office for the Philippines at the “From cash to digital wage payments: a win-win for enterprises and women workers in the Philippines”, 9 March 2021, Manila, Philippines via Zoom

Statement | Manila, Philippines via Zoom | 09 March 2021
Distinguished panelists, dear participants,

It is my great pleasure to open this webinar “From cash to digital wage payments: a win-win for enterprises and women workers”. This webinar is organized by the International Labour Organization in close collaboration with the Women’s World Banking, and with the support of the Government of Australia.

In the past decade, digital technologies have disrupted the financial system in the Philippines and have transformed the way workers and businesses alike conduct their financial transactions, quickly moving away from cash and embracing digital means to make or receive payments.

The COVID-19 pandemic contributed to accelerating this transition to digital payments, including wage payments, as a way to further discourage in-person financial transactions and minimize the spread of the virus.

Despite these trends, majority of male and female workers in the private sector still receive their wages in cash or if they are paid digitally on a bank account or a mobile money wallet, they may not make the most out of their digital wages. Cash based wage payments are risky and inefficient for the employers, they are also risky and disempowering for the workers.

The ILO strongly believes that the transition from cash to digital wage payments brings opportunities to improve the efficiency of payroll services, advance conditions of work, facilitate access to services and markets through improved compliance, and grow.

The transition also has the potential to enable workers - in particular the most vulnerable including women workers, domestic workers, informal workers - to have a better control over their wages.

This will also help improve access to financial services such as savings, credit and insurance, leading to additional economic opportunities and greater resilience to economic shocks.

The study that will be presented in this webinar explored the awareness, use and acceptance for digital wage payments among employers and workers engaged in the electronics, garment and retail sectors in the country. It provides insights on the opportunities that digital wages bring but also the challenges that need to be addressed at the levels of the financial ecosystem, the enterprises and the workers to ensure a responsible transition to digital wages.

This study is part of global efforts of the ILO to promote digital wage payments. The ILO has just launched a new initiative entitled “The Global Centre on Digital Wages for Decent Work”. This Global Centre seeks to promote the responsible transition from cash to digital wage payments through action research and evidence based advocacy, knowledge sharing, capacity building of employers’ and workers’ organizations and the development of inclusive digital payment ecosystems.

Pilot interventions will be implemented in four countries and there is a high chance that the Philippines be one of them – which would give us an opportunity to deepen our work in this topic and take actions on the study recommendations. We should know soon and will inform you in due time.

In addition, this study builds on existing ILO work in the country on risk managing financial services, formalization and enterprise development and it provides excellent insights for an upcoming ILO project on digitization of small and medium enterprises (SMEs). This is crucial in line with our efforts to build a better future of work, and to support the Decent Work Country Programme of the Philippines.

This webinar is very timely. Yesterday, on the International Women’s Day, the ILO paid tribute to the tremendous efforts made by women in shaping a more equal future and recovery from the COVID-19 pandemic.

I hope that the findings of this study and the discussion that we will have during this webinar today can support national efforts to promote the transition from cash to digital wage payments, responsible business practices and the financial inclusion of men and women workers.

I would like to express my sincere thanks to the Australian Department of Trade and Foreign Affairs for supporting this study. Thanks also go to Women’s World Banking and ILO colleagues in Geneva and Manila for conducting this work in the difficult context of the pandemic. Finally, I thank my team in Manila for organizing the logistics behind this webinar.

We look forward to exchanging and collaborating with all of you and key stakeholders, including Government, employers and workers organizations, the financial sector and development partners to take together this agenda forward and advance decent work and social justice in the Philippines.

Thank you!