Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
____________________________________________________________________ 
Introduced by HON. JOSEPH “JOJO” L. LARA 
____________________________________________________________________ 
EXPLANATORY NOTE 
This bill seeks to promote and facilitate a secure, efficient, and universal digital or 
electronic mode of conveying payments for transactions, arrangements or exchanges 
of goods and services for all government and public transactions. 
It aims to provide a safe and effective digital or electronic mode of payment by all 
NGAs, GOCCs, LGUs, in the collection and payment of taxes, fees, tolls and other 
revenues and in the payment of goods and services and other disbursements. 
In the recent years and accelerated by the COVID-19 global pandemic, the Philippines 
has seen an increase in momentum in the shift to cashless payments. According to 
the latest Visa Consumer Payment Attitudes Study, sixty (60) percent of Filipinos have 
been carrying less cash in their wallets and 84 percent have tried going cashless in 
2021. 
Safety, convenience, and easy financial tracking are among the reasons Filipinos opt 
to go cashless and they prefer this new mode of payment to settle bill payments, do 
grocery and retail shopping. 
By providing an enabling environment, necessary infrastructure, support, safety nets 
and safeguards, the switch to digital payment can be further facilitated and harnessed. 
In the long run, it will enable the government and our merchants to lower their 
operating costs and increase financial freedom, contributing to the country’s economic 
growth.  
In lieu of the forgoing, the passage of this bill is earnestly sought. 
JOSEPH “JOJO” L. LARA 
August 1, 2022
5:12 pm
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. _______ 
____________________________________________________________________ 
Introduced by HON. JOSEPH “JOJO” L. LARA 
____________________________________________________________________ 
AN ACT 
PROMOTING THE USE OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. – This Act shall be known and cited as the "Promotion of 
Digital Payments Act.” 
SECTION 2. Declaration of Policy. – The State recognizes the vital role of 
information and communications technology in nation-building. The State also 
recognizes the need of promoting ease of doing business and efficient delivery of 
goods and services to the general public, and for developing safe and efficient modes 
for conveying payment for financial transactions. Towards this end, the State shall 
promote financial inclusion, optimize the use of technology and innovative payment 
systems for financial transactions and promote the electronic conveyance of payment 
for various transactions with the government, to and among business entities and 
merchants, and an-long the general public. 
SECTION 3. Objective. – This Act aims to facilitate transactions, arrangements, or 
exchanges of goods and services by promoting the universal use of safe and efficient 
digital payments in financial transactions of the government and the general public. 
SECTION 4. Definition of Terms. – As used in this Act: 
a) Access device refers to any card, plate, code, account number, electronic serial
number, personal identification number, or other telecommunications service,
equipment 1 or instrumental identifier, or other means of account access that
can be used to obtain money, goods, services, or any other thing of value or
to initiate a transfer of funds other than a transfer originated solely by paper
instrument;
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b) Digital Payments refer to monetary payment transactions between two (2) 
parties through a digital payment instrument in which both the payer and the 
payee use an electronic channel; 
 
c) Merchant refers to a person or entity engaged in buying and selling 
merchandise, purchasing goods and services, skills, or expertise, and leasing of 
goods and services. It also includes credit-granting entities, lending institutions, 
pawnshops, remittance companies and other money service business, except 
financial institutions supervised by the Bangko Sentral ng Pilipinas (BSP), which 
shall be governed by specific BSP regulations and requirements on digital 
services; 
 
d) Payment system refers to the set of payment instruments, processes, 
procedures, and participants that ensures the circulation of money or 
movement of funds which comply with the requirements set forth under 
Republic Act No. 11127, otherwise known as "The National Payment System 
Act"; and 
 
e) Payment Service Provider (PSP) refers to an entity that provides payment 
services to end-users, such as consumers, merchants, and billers, including 
government institutions. 
 
SECTION 5. Use of Digital Payments. – All national government agencies (NGAs), 
government-owned and -controlled corporations (GOCCs), and local government units 
(LGUs) are hereby mandated to utilize safe and efficient electronic or digital means of 
receiving payment for taxes, fees, tolls, imposts, and other revenues and for the 
payment of goods, services, and other disbursements. To this end, government 
entities may be allowed to include in their respective budgets the amounts that will 
cover the cost of establishing and maintaining the infrastructure, system and process 
adjustments as well as transaction fees that they may shoulder in connection with the 
implementation of digital payments, including merchant discount rate, processing 
fees, cash out fees, administration fees: Provided, That the release of said budget 
may be conditioned on the actual adoption of digital payments by the concerned 
government entities. 
 
To facilitate compliance with this Act, NGAs, GOCCs, and LGUs must adopt account-
based disbursements whereby target recipients directly receive government payments 
into their transaction accounts, These government entities may create their respective 
digital payment technical support and maintenance service units which shall be 
responsible for troubleshooting and in maintaining coordination with the PSP partner 
for technical and other concerns within the agency. They shall also be responsible for 
ensuring the proper transition of their respective agency's payments and disbursement 
procedures and policies on digital payments. The creation of the technical support and 
maintenance service units shall be without prejudice to any technical support 
arrangement between the agency and the PSP partner pursuant to a contract or 
agreement: Provided, That, the 
contract or agreement shall be subject to the 
applicable regulations of the BSP, The BSP shall accelerate the adoption by all PSPs of 
the national quick response (QR) code standard to hasten the interoperability of QR-


 
driven payment services and eliminate the need for merchants and clients to maintain 
several accounts, The Government Procurement Policy Board shall, in coordination 
with the BSP, issue guidelines to be observed when procuring the services of a PSP 
that provide digital payment: Provided, That, government entities shall avail only of 
interoperable digital payment solutions. 
 
Notwithstanding any law to the contrary, a partner PSP of a government entity shall 
not be limited to government financial institutions. 
 
SECTION 6. Digital Payment Capability of Merchants. – To accelerate the 
adoption of digital payment, LGUs shall, by ordinance, require merchants within their 
localities to establish or outsource arrangements or mechanisms that would enable 
them to receive payments from clients and make payments to creditors and suppliers 
in digital form as a pre-requisite for the approval or renewal of their business permits. 
No new or renewal of business permit shall be approved unless the merchant 
concerned shows to the satisfaction of the LGU that a functional digital payment 
system accessible by mobile phone or other access devices is installed or provided by 
a duly registered PSP in the merchant partner's place of business, The LGUs shall 
ensure that merchants in their jurisdictions have access to appropriate digital payment 
solutions and have the capacity to effectively use the same, with due consideration to 
small and micro-merchants, including market vendors, tricycle operators and food 
stalls. The LGU shall extend assistance to small and micro-merchants to facilitate their 
adoption of digital transaction capability. The BSP, Department of Trade and Industry 
(DTI), Department of the Interior and Local Government (DILG), and the Department 
of Information and Communications Technology (DICT) shall also facilitate measures 
to provide capacity building for the NGAs, GOCCs, LGUs, and merchants on the use of 
digital payments. 
 
SECTION 7. Promotion of Digital Payment Transactions. – To optimize the 
benefits of this technological innovation, scale up financial inclusion, and promote 
sustainability, NGAs, GOCCs, and LGUs shall prioritize the use of safe and efficient 
digital payment in their financial transactions. 
 
All NGAs, GOCCs, and LGUs shall also explore the feasibility of adopting a 
comprehensive incentive framework for selected financial transactions to encourage 
the availment of digital payments. Moreover, LGUs may impose reduced fees or grant 
other incentives for merchants providing efficient digital payment systems. 
 
The BSP shall, in coordination with relevant stakeholders, promote measures on 
financial and digital literacy, and consumer protection to strengthen the public's trust 
in digital payment transactions. 
 
The Department of Science and Technology and the DICT shall implement measures 
to further enhance the availability and cost of internet connection to support the 
government's program on the digitalization of financial transactions. 
 
SECTION 8. Implementing Rules and Regulations. – The BSP shall, in 
coordination with the Department of Budget and Management, DTI, DICT, and DILG, 


 
promulgate the rules and regulations implementing the provisions of this Act within 
ninety (90) days from its effectivity. 
 
SECTION 9. Separability Clause. – If for any reason, any part or provision of this 
Act is declared invalid or unconstitutional, the remaining parts or provisions not 
affected shall remain in full force and effect. 
 
SECTION 10. Repealing Clause. – All laws, presidential decrees, executive orders, 
rules, and regulations contrary to or inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly. 
 
SECTION 11. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of national circulation. 
 
Approved,