Micro, small, and medium enterprises (MSMEs) account for 99.5% of companies within the Philippines. Yet, a big majority still depend on money transactions and informal financing, limiting business expansion and leaving them vulnerable during economic disruptions.
In the course of the BusinessWorld Economic Forum 2026, themed “Advancing the ASEAN Agenda: Turning Regional Vision to Corporate Motion,” business executives and policymakers discussed the growing have to speed up digital adoption amongst MSMEs as Southeast Asia pushes deeper economic integration.
Among the many panelists was Paul Albano, general manager of GCash for Business, who highlighted how digitalization could help small enterprises widen market access and gain access to formal credit systems.
Mr. Albano said the low level of digital adoption today provides considered one of the biggest opportunities for the financial technology sector.
“Only 20% of MSMEs have adopted digital transactions, with the remaining doing business in money. That’s essentially the most glaring opportunity for us in GCash, which is to assist these MSMEs digitize their businesses. As they digitize, they are going to find a way to go and drive growth in expansion,” he said.
Many businesses expanded in the course of the pandemic as households looked for alternative income sources while mobility restrictions disrupted traditional employment. Some entrepreneurs began selling products through social media platforms and digital wallets, often using personal accounts, before shifting into more formal business operations.
Mr. Albano said GCash developed its business platform partly in response to those changing patterns. Many small entrepreneurs first used personal digital wallets to receive payments before eventually looking for more formal merchant services.
The corporate later expanded services from payment acceptance into broader business tools that included online payment systems, disbursement services, reporting functions, and lending access.
In turn, digital payment systems accelerated after the pandemic, which modified consumer habits and pushed businesses toward contactless transactions.
Advancing financial literacy and access to formal finance
Despite wider smartphone usage and stronger digital payment adoption amongst consumers, financial literacy stays considered one of the biggest obstacles stopping MSMEs from fully embracing digital operations.
As Mr. Albano observed, many small business owners still fear online scams and cybersecurity risks, discouraging them from moving away from money transactions.
“A variety of these MSMEs are not looking for to go digital due to fear of getting scammed,” he said.
He noted that education campaigns and merchant-focused financial literacy programs remain mandatory to assist business owners understand how digital systems work and the way they will manage risks while expanding operations.
GCash for Business has expanded its services from QR-based payment collection into broader merchant services that include card payment terminals, online payment systems, disbursement facilities, and merchant management portals.
The corporate also offers payment devices able to processing debit cards, bank cards, and QR Ph transactions, allowing merchants to just accept multiple types of payment under one system.
“As businesses grow they usually can receive payments into their merchant wallet, we’re capable of also facilitate them to pay their bills and disburse to their employees,” he said.
Meanwhile, Mr. Albano said about 80% of nano- and micro-enterprises lack access to formal credit institutions. Limited documentation and the absence of traditional credit histories often prevent small merchants from qualifying for bank loans.
Financial technology firms, like GCash, are actually using transaction histories and payment behavior to evaluate creditworthiness amongst small merchants that lack banking relationships.
“We want to expand [our service] by making solutions easy for MSMEs, not only by catering to core payment acceptance, but expanding that to the complete value chain, each in-flow and out-flow funds,” he explained.
Mr. Albano added that companies that transition from personal digital wallets into merchant accounts create transaction trails which will help corporations develop alternative credit scoring models.
Greater than just finance
Mr. Albano said GCash currently works with greater than 700 local government units nationwide. One major initiative involves digitizing transactions inside traditional wet markets through the Paleng-QR program.
The initiative allows vendors to just accept QRPh or scan-to-pay QR payments while also paying suppliers digitally. Government officials and personal sector partners have promoted this system as a technique to modernize commerce in densely populated trading centers that historically relied almost entirely on money.
He explained that the extent of local government engagement determines whether programs gain traction amongst market vendors and neighborhood businesses, particularly in communities where web connectivity stays inconsistent.
Concurrently, digitalization has widened opportunities for overseas transactions amongst smaller enterprises. Mr. Albano said GCash has integrated with cross-border payment and remittance systems that allow Filipino business owners to pay foreign suppliers and receive payments from abroad.
“Inside GCash, we now have a global business unit that may facilitate inbound and outbound remittances. Now, Filipinos pays for his or her suppliers abroad using GCash outbound remittances,” he explained. “GCash as a wallet facilitates receiving payments abroad through our partnerships with different remittances and money transfer operators in banks all around the world in over 200 countries and territories globally.”
When it comes to the sector’s resilience, small businesses remain amongst essentially the most vulnerable during economic and geopolitical tensions. For this reason, MSMEs typically face tighter capital constraints than larger corporations, leaving them more exposed during price increases and weak consumer demand. “We’re proactively working on support the MSMEs through the crisis,” Mr. Albano shared. “We’re leveraging the GCash ecosystem on find higher deals for them from a supplier standpoint,” he added.
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