The e-Conomy SEA 2024 study by Google, Temasek, and Bain & Co.* indicates that Philippines’ e-commerce gross merchandise value reached $31 billion, with e-commerce contributing $21 billion to that total. It is forecast that by 2030, the Philippines’ e-commerce will reach $60 billion.
In this digital age where anything can be delivered anywhere, e-commerce platforms have created a ripple effect, leading to the proliferation of logistics companies, specifically private express and messengerial delivery services (PEMEDES) firms. PEMEDES firms play a crucial role in the logistical operations of e-commerce platforms. Without these delivery operators, our parcels cannot be delivered to us.
As defined by Department of Information and Communications Technology (DICT) Circular No. HRA-002 dated June 26, a PEMEDES firm includes every natural or juridical person that owns, operates, manages, or controls in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional, or accidental, and for general business purposes, any service for the personal delivery to other persons, of written messages and any mail matter, except telegrams. A person who takes messages, letters, or parcels from one person or place to another, on behalf of a PEMEDES firm is called a Messenger. For better context, the delivery rider is the Messenger, whereas the entity which the delivery rider works for is the PEMEDES firm.
While PEMEDES firms provide a public service, they are not among the enumerated public utilities under Republic Act No. 11659, which amended the Public Service Act.
As PEMEDES firms cater to the public, they are regulated by the DICT pursuant to Presidential Decree No. 240 and Republic Act No. 10844 or the Department of Information and Communications Technology Act of 2015.
Before a PEMEDES firm operates its business, an Authority to Operate private express and/or messengerial delivery service shall first be obtained from the DICT.
To apply for Authority to Operate the delivery service, the applicant/petitioner must file a verified petition and submit several requirements ranging from its SEC Registration, By-Laws and Articles of Incorporation/Partnership, to sketches of its office location and office lay-out.
PEMEDES firms that run their business without a valid license/authority to operate, or whose authority has been revoked or has expired are called as “colorum.” To date, 200 suspected colorum PEMEDES operators have been flagged down by the DICT. (“From the Shadows to the System: DICT Offers Second Chance to Underground Delivery Operators,” May 8, https://dict.gov.ph/news-and-updates/19793).
DICT Circular No. HRA-002 aims to implement an amnesty program for colorum firms to legitimize their operations without penalty. The amnesty covers unassessed fines and penalties imposed by the DICT for the colorum firm’s failure to obtain an Authority to Operate and will run for a period of six months. When the DICT issues the notice of effectivity of the PEMEDES Portal, that will be the start of the six-month amnesty period. The PEMEDES Portal is still to be established by the DICT.
In applying for amnesty, applicants have to provide following information to the PEMEDES Portal:
A. Statement that the applicant is: (i) currently operating without Authority to Operate, (ii) currently operating in areas outside the coverage of its Authority to Operate, (iii) currently operating under a revoked, suspended, or expired Authority to Operate and was not able to properly file a petition for extension or renewal before the expiration, and intends to apply for the DICT Amnesty Program;
B. The duration or length of time the applicant has been in operation;
C. The total number of messengers employed or engaged by the applicant at the time of the application; and,
D. A description of the clientele or entities to whom the applicant provides delivery services.
In addition to these, applicants have to submit the following additional documentary requirements: an Affidavit of Undertaking specific to amnesty compliance; and a Waiver of right to contest post-deadline penalties.
Once the applicant completes all the required submissions and fees, a Provisional Authority to Operate PEMEDES will be issued. The Provisional Authority to Operate PEMEDES will be valid for six months from the date of issuance. Colorum PEMEDES firms that fail to apply during the six-month amnesty period will be subject to cease-and-desist orders and administrative penalties under relevant rules and regulations.
To emphasize, the application for amnesty under DICT Department Circular No. HRA-002 is separate and distinct from the application for Authority to Operate PEMEDES firms.
The amnesty program represents a significant gesture by the DICT to foster compliance and stability within the growing PEMEDES sector. For colorum PEMEDES firms, it is an invaluable opportunity to transition into the formal economy, ensuring not only their own operational security but also contributing to the broader development and trustworthiness of the e-commerce logistics ecosystem. The time to act on this benefit is now.
* Florian Hoppe, Willy Chang, Aadarsh Baijal, Sapna Chadna, and Fock Wai Hoong, e-Conomy SEA 2024
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and is not offered as and does not constitute legal advice or legal opinion.
Jerona Krystel R. Boston is an associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.
(6382) 224-0996