Digital identity
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - July 3, 2020 - 12:00am

The big project in NEDA Secretary Karl Kendrick Chua’s presentation at last week’s Carlos P. Romulo Foundation sponsored webinar is our national ID. The rollout of the National ID program will tell us if Sec Karl can implement as well as he can plan.

That’s because the implementing agency for the National ID project is the Philippine Statistics Authority, an agency supervised by NEDA. It is a tough project to get going with so many early pitfalls already. Sec Karl will have his hands full. But Sec Karl seems to be the right person to carry out this dream project. He is enthusiastic about it. He is convinced it is needed. And he is new enough in the bureaucracy to have little patience with the red tape that has plagued the National ID’s implementation so far.

Digital identity, Sec Karl explained, is the fabric to the digital economy. “Identity is the foundation for most sectors that interact with people. Identification is a key enabler or contributor to financial inclusion, social protection, healthcare and education for all, equality, child protection, agriculture, good governance, and safe and orderly migration.” Sec. Karl cited successful examples: In India, financial inclusion jumped from 35 percent in 2011 to 80 percent in 2017 after the introduction of the Aadhaar ID system.

Thailand reached 98 percent health coverage from 2001-2003 by using the national ID to find citizens who were not yet covered. Pakistan saved $248mn following the 2010 floods by cross-referencing databases using the Unique Identification Number (UIN). Digital identity provides a significant opportunity for value creation to both individuals and institutions, Sec Karl explained.

“For emerging economies, value can be created through a combination of digital ID with authentication alone, transforming the lives of people who lack an official proof of identity.” In our increasingly digital environment, citizens need a legal and digital identity so they can access digital government services and participate fully in the digital economy. In our case, a large number of people are unable to open a simple bank account because they have no means of legally authenticating who they are. The PhilSys or our national ID system, is the government’s central identification platform.

Registration into the PhilSys database is done by capturing demographic and biometric data (fingerprint, iris, or facial scan), and issuing a unique PhilSys Number (PSN) and PhilSys ID (PhilID) to each successfully registered individual for a valid proof of identity. This provides authentication services to government agencies and the private sector (like banks) within a secure, reliable, and enabling digital ecosystem. It should be able to accelerate growth and dynamism of the Philippines’ digital economy. With the national ID system in place, government will be able to more efficiently deliver and administer social protection (e.g. cash transfers, SSS, GSIS, PhilHealth). It could have made the flow of emergency COVID assistance faster and less prone to leakages.

Without such a system, some 52.8 million unbanked Filipino adults have been denied financial services because they lack identification. PhilSys will help directly address the “lack of necessary documentation barrier” in opening financial accounts and services. PhilSys has universally-accessible credentials which meet the customer due diligence regulatory requirements set by BSP for identity verification.

Sec. Karl reassures that advancing digital economy remains a high priority in this administration’s agenda specially in the light of lessons learned from the pandemic. Transitioning into the “new normal,” Sec. Karl observed, means we must dive into a contactless world where majority of interactions must take place virtually. I know. Indeed, I have to make an effort to start using GCash or PayMaya soon. But there is this element of trust that government must address. It was a point that was raised and emphasized by Ramon Jocson, EVP of Bank of the Philippine Islands, who was also a panelist in the same Zoom webinar. Mon pointed out that the digital crooks are getting more and more daring and creative and our laws must be constantly updated to protect the public

The penalties are not commensurate to the financial mayhem that these cyber criminals create, the banker said.

Trust is an important element for a successful digital transformation. My lack of it is why Mon has so far failed to convince me to enroll in BPI’s online system. I still do not feel secure doing my banking transactions on my mobile or laptop.

But there is no doubt the future is digital. The economic team represented by Sec Karl is right to emphasize the need to get us there as quickly as possible. I have no doubt that they are frustrated too at the bureaucracy’s pace in catching up with the rest of our neighbors and the world.

This is why I want to reiterate my proposal for Duterte to name Finance Secretary Sonny Dominguez as some kind of Deputy President with powers over all the other cabinet members on day-to-day functions of government. It would lessen Duterte’s load, something I am sure he will appreciate. It is only Sec Sonny among senior officials who seems to feel the sense of urgency in transforming our government and society. With the big challenges we face in the post Covid environment, we need someone like Sec Sonny calling the shots.

Otherwise, all the good results of the work that the economic team had been getting in terms of international recognition and historical high credit ratings are wasted because we don’t see results in other key areas, transportation and communication, for instance.

Going digital is not going to happen in a big enough way to make a difference for us unless we see leadership and enthusiasm (as well as competence) on the part of DICT officials. We first have to be connected before anything really starts to happen.

I suggest that NEDA sets up targets for DICT to meet within certain timeframes. Unless they can execute on NEDA’s plans, Sec Karl’s wonderful presentation will be just so much wasted saliva, as usual.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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