Digital enablement of MSMEs

AS the COVID-19 alert system is being implemented in the entire country, more businesses are opening hoping to recover the lost ground in the last 2 years.

But micro, small, and medium enterprises (MSMEs) are still struggling to adapt to the new normal. In a survey I conducted among MSMEs during one webinar, almost all of the more than fifty companies find adapting to digital technologies and tools as the biggest challenge.

The inability of MSMEs to adapt may be one of the reasons why around 10% of them have closed in June amid the COVID-19 pandemic, according to the survey of the Department of Trade and Industry (DTI). This is equivalent to around 140,000 businesses.

Therefore, MSMEs need to be enabled with digital tools, solutions, and capabilities in order to adapt, survive, and even thrive amid the pandemic. All the drivers to learn how to use digital tools are here.


For one, by 2023, 84 million Filipinos will be connected to the internet, an 8% jump from pre-pandemic level. Another is that there is already ninety million Filipinos active in social media, a jump of 22% from last year, according to We Are Social. Almost a hundred percent of those connected to the internet own a smart phone. More than 80% of those connect to the internet have purchased a product online.

These drivers point to the new normal of how consumers are buying online now, how buyers are interacting through social media, and how they pay using digital means. MSMEs must learn and apply the digital tools and solutions that are necessary in the conduct of their business.

Digital channels. MSMEs can take advantage of exiting digital channels such as Lazada, Shopee, Facebook Marketplace, and Carousell. These are marketplace platforms that bring together buyers and sellers of certain goods or services.

Social media marketing. With more than eighty million Filipinos active in social media, MSMEs can utilize this channel to promote their products and services. Social media marketing provides companies with a way to engage with existing customers and reach new ones while allowing them to promote their desired culture, mission, or tone.

Digital payments. In 2020, around forty million Filipinos made digitally enabled payment transactions, and increase of 27% from the previous year according to We Are Social. MSMEs can allow consumers and buyers to purchase their products and services through digital payment solutions such as through, GCash, DragonPay, Grabpay, PayMaya, PayPal, 7-Eleven CLIQQ Pay, and others offered by local banks.

Courier and shipping services. These delivery services have likewise transformed to become digitally enabled. MSMEs can use the different types of courier and shipping serves such as the standard, i.e., services involving collecting, sorting, and transferring parcels from, say, warehouses, to the closest depot to the delivery location; overnight, i.e., services guaranteeing parcels delivered the following day; and same-day delivery, i.e., service promising same-day delivery and is, as such, the most expensive of all courier services. These are useful MSMEs engaged in online selling, which require shipping solutions for multiple parcels.


These digital tools and solutions can help MSMEs migrate their business to digital, to reach a larger market base and make their operations efficient.

But while MSMEs transition to digitally enabled tools and solutions, it is likewise important to equip the entrepreneurs and business owners with knowledge of cybersecurity. Cyberattacks stealing money from businesses have increased over the last two years of the pandemic, necessitating the urgent need to arm businesses with security tools and educating the employees on cybersecurity protection.

REYNALDO C. LUGTU, Jr. is founder and CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines (FINEX). He is a fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be e-mailed at