A
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE 
s. No. S 03
of t!)i? i&r:. ffnrj>
■22 JUL 25 AlO 32
c;p
RECEIVED BV:
Introduced by Senator Jlnggoy Ejercito Estrada
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
Because of the imposition of mobility restrictions and distancing protocols 
during the novel Coronavirus pandemic, many turned to digital platforms in order to 
conduct their financial transactions at the comfort of their homes. With one tap and 
click on mobile devices, consumers were able to pay their groceries and avail of 
different services, and entrepreneurs managed to operate their businesses without 
the hassle of queuing or commuting to the nearest brick-and-mortar banks for cash.
The New Normal created awareness and provided the push to use digital 
payments. According to the State of Digital Payments in the Philippines report1, "one 
e-money issuer saw a 1000% year-on-year increase in remittances, and one large 
convenience store saw a 10-fold Increase in digital payments in the first half of 
2020."
The Social Amelioration Program (SAP) of the national government at the 
height of the public health crisis was also implemented with the help of digital 
payment partners, which fast tracked the distribution of emergency financial aid to 
the beneficiaries, even in remote areas.
1https://www.bsp.gov.ph/f>avmentAndSettlement/State of Digital Payments in the Philippines (2021 Editi
on).pdf


In addition, the transportation sector made efforts to digitize payments to 
ensure the safety of passengers and minimize the risk of virus transmission 
particularly In public utility vehicles by way of contactless fare collection.
According to Better Than Cash Alliance, a United Nations (UN) - based multi­
sectoral partnership, the responsible use of digital payments advance the 
Sustainable Development Goals (SDGs), Including poverty alleviation, eradication of 
hunger, reduction of Inequality, among others, as observed In many cases In 
developing countries around the world. It emphasized: "shifting payments from cash 
to digital has the potential to Improve the lives of people on low income, particularly 
women; governments, companies and International organizations can make and 
receive payments in a cheaper, safer and more transparent way, helping build 
economies that are inclusive2.''
This legislation proposes to sustain and build on the digital transformation of 
government operations and processes towards Increased efficiency, productivity and 
transparency. It seeks to institutionalize the national policy of adoption of digital 
payments for government disbursements and co'lections as embodied under 
Executive Order No. 170, s. 2022.
This bill was reported out by the Senate Committee on Banks, Financial 
Institutions and Currencies, while a similar measure was approved by the House of 
Representatives on Third and Final Reading during the Eighteenth Congress.
Immediate passage of this bill is sought
JINGfiOY E3ERCTTO ESTRADA
httP$;//www.bettqrthsncash.org/whv-dlgltal-D"vments


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE 
S. No.
ot tlie
*22 JUL 25 AlO *32
RECEIVED B
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MFRCHANIS AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Title. - This Act shall be known as the x'Use of Digital
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Payments Act."
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Sec. 2. Declaration of Policy. - The State recognizes the vital role of
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Information and communications technology particularly financial technology,
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towards financial inclusion advancement and nation-building. The State also
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recognizes the need of promoting ease of doing business and efficiency delivery of
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goods and services to the general public. Towards this end, the State shall promote
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financial inclusion through the use of safe, secure and efficient digital payments. In
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various transactions of the government and the public - pamcularly for payments to
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government, and government disbursements to the public, which includes but is not
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limited to payments to or by private institutions, merchants, and beneficiaries, the
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State shall optimize the use of financial technologies and innovative payment
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systems for financial transactions and to strengthen financial inclusion. In so doing,
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the State shall encourage and facilitate the adoption of digital payments In a
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technology-neutral manner, where one technology is not unreasonably favored or
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given undue advantage over another.


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Sec. 3. Objectives. - This Act aims to facilitate transactions, arrangement, or 
exchanges of goods and services by promoting the universal use of safe, affordable, 
and efficient digital payments in financial transactions of tiie government and the 
general public.
This Act also alms to enhance the efficiency and transparency of government 
disbursements, and expedite the delivery of social protection assistance and the 
distribution of financial aid to the most vulnerable sectors of society, especially in 
times of crisis, pandemics or calamities.
Sec. 4. Definition of Terms. - As used in this Act, the following terms shall
mean:
a) Access device - refers to any card, plate, code, account number, 
electronic serial number, personal identification number, mobile device, or 
other information and communications technology service, equipment, 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 ;n electronic form;
b) Account-based disbursement - refers to the disbursement of funds such 
as salaries, wages, allowances, and social benefits, among others, directly 
into the transaction account of the intended recipient held in any Bangko 
Sentral ng Pilipinas (3SP)-supervised entity as cho,:.en and specified by the 
intended recipient;
c) Basic deposit account (BDA) - refers to the deposit product offered by 
banks as defined under the BSP Manual of Regulations for Banks and its 
implementing guidelines, or an account designed to promote financial 
inclusion, specifically for the unserved and underserved sectors, to receive 
and make payments and have a facility for store of value. It Is 
characterized by the following features: a) liberalized customer 
onboarding; b) minimal opening amount; and c) no maintaining balance 
requiremenu and no dormancy charges;
d) Digitai coiiection ~ refers to a mode of payment wherein businesses and 
citizens make payments to the government, including but not limited to 
taxes, fees, and tolls using a digital device such as mobile phone, point of


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sale, or computer. Payments can be made with bank transfers, electronic 
money, and payment cards including credit, debit, prepaid or stored-value 
cards, among others;
e) Digital disbursement - refers to a mode of payment whereby 
disbursement of money or equivalent electronic representations of legal 
tender, for purposes of paying government expenditures, is made by 
crediting the target recipient's transaction account through advice to debit 
or electronic fund transfer facilitated by any government agency or 
instrumentality through their respective servicing bank;
f) Digital Payments - refers to monetary payment transactions between two 
parties through a digital payment instrument in which both the payer and 
the payee use an electronic channel;
g) Electronic fund transfer - refers to a transfer of funds between two 
transaction accounts in the same or different BSP-supervised financial 
institutions which are initiated and received using electronic devices and 
channels to transmit payment instructions;
h) Electronic money (e-money) - refers to electronically-stored monetary 
value which is Issued in accordance with the BSP Manual of Regulations 
for Banks and the manual of regulations for non-bank financial 
Institutions;
i) Financial inclusion - refers to the state wherein there is effective access to 
a wide range of financial products and services for all Filipinos;
j) Government Servicing Payment Service Provider (PSP) - refers to bank 
and non-bank PSPs authorized to accept governnient funds and perform 
payment services on behalf of government entities. This includes 
authorized government depository banks (AGDBs) as defined by 
Department of Finance (DOF) regulations;
k) Information security standards - refers to standards which aim to protect 
and secure the confidentiality, integrity, availability, authenticity, and non­
repudiation of information and the data privacy of users of any digital 
payment platforms and other parties involved therein;


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l) Merchant - refers to a person or entity engaged in buying and selling 
merchandise, purchasing of services, skills or expertise, and leasing of 
goods and services;
m) Micro-payment transactions - refers to low-value payments including but 
not limited to payments to sari-sarl store owners, wet market vendors, as 
well as tricycle and jeepney drivers, the actual thresholds of which shall be 
determined by the BSP, pursuant to the objectives of this Act;
n) Payment Service Provider (PSP) - refers to an entity, such as bank or non­
bank electronic money Issuer, that provides payments services to end- 
users, such as consumers, merchants, and billers, including government 
institutions;
o) 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. Ili27 or :he National Payment System Act;
p) Transaction Account- refers to an account, such as but not limited to a 
BDA, or e-money account held with a BSP-supervised financial Institution 
that can be used to store, send, and receive funds.
Sec. 5. Adoption of Digitai Payments for Government Disbursements. - All 
government entitles, including but not limited to national government agencies 
(NGAs), foreign-based government agencies, all government corporations, local 
government units (LGUs), State Universities and Colleges (SUCs), and local 
universities and colleges (LUCs), are hereby mandated to utilize safe and efficient 
digital disbursement m the payment of goods, services and other disbursements 
including but not limited to cash assistance and payments of salaries, wages, 
allowances, and honoraria of its employees, whatever nature of appointment. 
Government entities shall be allowed to disburse funds directly Into the recipient's or 
beneficiary's transaction account held in government or private financial institutions 
without the need for special arrangement with each of these financial institutions. 
For this purpose, said government entities may use the automatic debit 
arrangement. Interoperable electronic fund transfer or any other appropriate facility 
of Its government servicing PSP.


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Accountable officers of the government entitles shall observe due diligence In
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ensuring the accuracy of the recipient's or beneficiary's identity. Uses of government
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funds through direct crediting shall remain transparent to state auditors.
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Government entities shall be responsible for preparing the payment
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instruction with the necessary details, including the recipient's or beneficiary's name,
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transaction account details, and amount, among others, only after proper
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authorization In accordance with established accounting and auditing rules and
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regulations.
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The government servicing PSP shall carry out the payment instruction and
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submit the verified list of successful and failed fund transfers and other relevant
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details to the government entity disbursing the fund. Subject to agreement with the
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government entity, the government servicing PSP may collect reasonable fees from
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the government entity for the electronic fund transfer services.
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In case of unsuccessful digital disbursement, there shall be a recovery
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mechanism that will ensure the contnuity of delivery of payment services: Provided,
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That in cases of calamities or other emergencies, where payments through digital
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means may be affected, non-digital payout channels may be explored.
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Sec. 6. Adoption of Digital Payments for Government Collections. - All
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government entities, including but not limited to nationai government agencies
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(NGAs), foreign-based government agencies, all government corporations, local
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government units (LGUs), State Universities and Colleges (SUCs) and local
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universities and colleges (LUCs), shall offer digital collection as a mode, in addition
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to acceptance of cash payment, for the collection of taxes, fees, tolls, imposts and
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other revenues, including non-income collections and receipts.
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Government entities shall utilize secure payment processing solutions to
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ensure acceptance of various digital payment methods. For this purpose, said
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government entities may engage the services of established PSPs: Provided, That
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government entities shall avail only of interoperable digital payment solutions.
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Notwithstanding any law to the contrary, partner PSP of a government entity shall
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not be limited to government servicing banks.
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Sec. 7. Adoption of Interoperable Digital Payment Solutions. - The BSP shall
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Implement initiatives that aim to acct-Jerate the adoption by all PSPs of interoperable


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digital payment technologies and appropriate standards thereof, such as but not
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limited to the National Quick Response (QR) Code Standard meant to hasten the
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Interoperability of QR-drIven payment services and eliminate the need for merchants
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and clients to maintain several accounts.
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In addition, NGAs, government corporations, SUCs, LGUs, and merchants
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shall undertake measures to promote the adoption of the Cpen Flnanc:e Framework
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In accordance with the guidelines set forth under the applicable BSP rules and
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regulations which will enable sharing of customer-permlssloned financial data and
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foster adherence to data security and privacy standards.
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The digital payment solutions adopted by government entitles shall allow for
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real-time receipt of funds by the recipient government entity, Immediate issuance of
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electronic Invoices and/or official receipts to payors, regular audit reports, and other
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technical features that will aid In the fulfilment of the objectives of this Act. To
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ensure that these digital payment solutions adhere to applicable International
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standards on information security, data privacy, and electronic data interchange
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between the financial institutions, among others, government entities shall avail of
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digital payment solutions under the BSP's National Retail Payment System
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Framework.
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Existing agreements between government entities ana PSPs shall be honored
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until the respective terms thereof expire: Provided, That parties concerned shall
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endeavor, within one year from the effectivity of this Act, to implement amendments
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to such agreements with intention to remove provisions detrimental to public
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interest. In all instances, colleccion and payment schemes that prevent transparency
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and accountability over public funds, as well as arrangements disadvantageous to
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the government, shall be discontinued.
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There shall be a Technical Working Group (TWG) composed of the
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Commission on Audit (COA), Department of Budget and Management (DBM),
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Department of Finance (DOF), Bureau of the Treasury (BTr), Bureau of Internal
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Revenue (BIR), the Government Policy Procurement Board, and other relevant
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agencies that will provide guidance and promote cost-efficiency and transparency in
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procurement of digital payment solutions by government entities. Consistent with


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the respective mandates of the member-agencies, and in coordination with the COA,
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the TWG shall have the following pov^/ers and functions:
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a) Oversee and monitor the procurement of digital payment solutions by
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government entities and ensure that the same is in accordance with
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existing laws, rules and regulations;
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b) Consider the formulation of standard terms and conditions for PSPs, in
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consultation with the BSP and COA. Pursuant to its mandate, the GPPB
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may also Issue specific procurement guidelines for the engagement of
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PSPs;
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c) Resolve issues relative to toe implementation of this Act, without prejudice
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to the individual member-agencies resolving such concerns pursuant to
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their respective mandates;
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d) Call on any department, agency or office under the Executive Branch for
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the effective implementation of this Act; and
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e) Perform such other function pursuant to the fulfilment of the objectives of
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this Act.
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Sec. 8. Establishment of a Government Payment Gateway. - The BSP, in
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consultation with the DOF, DBM, COA, Department of Information and
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Communicaclons Technology (DICT), BIR, Bureau of Customs (BOC), Bureau of the
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Treasury (BTr), digital banking experts, academe, and other appropriate public
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sector and banking Industry stakeholders, may cause the establishment of a
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government payment gateway through which all government entitles may process
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digital payments made to them through PSPs, websites, mobile phone applications,
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or other access devices.
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The government payment gateway shall allow for real-time settlement of
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accounts and receipt of funds by the recipient government entity, immediate
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Issuance of electronic invoices and/or official receipts to payors, regular audit
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reports, interoperability between digital payment technologies, and other technical
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features that will aid in the fulfilment of the objectives of this Act. Said gateway shall
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adhere to relevant international standards on information security, data privacy, and
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electronic data interchange between financial institutions.


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Sec. 9. Digital Payment Capability of Merchants. -To accelerate the adoption 
of digital payment, LGUs shall, by ordinance, encourage and grant monetary and 
non-monetary Incentives to merchants within their localities to establish and/or 
outsource arrangements and/or mechanisms that would enable them to receive 
payments from clients and make payments to creditors and suppliers using digital 
channels.
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, but not 
limited to, 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), DILG, and 
DlCr shall provide capacity building for the NGAs, government corporations, SUCs, 
LGUs, and merchants on the use of cigital payments.
Sec. 10. Promotion of Digital Payment Transactions. - To optimize the 
benefits of digital payments, scale up financial inclusion, and promote sustainability, 
all government entities shall prioritize the use of safe and efficient digital payment In 
their financial transactions.
All governm.ent entities covered by this Act shall also adopt a comprehensive 
incentive framework for selected financial transactions to encourage the use of 
digital payments. LGUs shall, likewise, grant incentives for merchants providing 
efficient digital payment systems.
The BSP, in coordination with relevant stakeholders, shall promote measures 
on financial and digital literacy, and consumer protection to strengthen the public's 
trust in digital payment transactions.
To enable the general public to adopt digital payments, micro-payment 
transactions shall be subject to graduated pricing or be rendered free of any service 
charge as determined by the BSP In consultation with the merchants and the 
payment services industry, as may be represented by the BSP-accredited payment 
system management body.


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The DIG" shc^il implement measures to further enhance the availability, 
accessibility, reliability, and cost-efficiency of Internet services to support the 
Government's program on the digitalization of financial transactions.
Sec. 11. Multi-Year Roadmap for Digital Payment Adoption. - The BSP, in 
collaboration with relevant government entities, shall prepare and regularly update a 
multi-year roadmap on digital payments to ensure the timely implementation and 
optimal realization of the objectives of this Act.
The Multi-year Roadmap shall be aligned with the e-government masterplan 
formulated by the DICT in consultation with other key government agencies, and 
shall, among others, set targets and outcomes, such as but not limited to the 
widespread adoption of digital payments by merchants, for a minimum period of five 
(5) years, and Include strategic public and private intervention and possible 
government programs and projects. The roadmap shall be subject to annual review.
Sec. 12. Transitory Provision. - Government entities shall be responsible for 
ensuring proper transition of their respective agency's disbursement and collection 
procedures and policies to digital payments.
Digital disbursement shall be implemented within six (6) months from the 
Issuance of the implementing rules and regulations (IRR) of this Act.
For the implementation of digital collections, a tiered transition period not 
exceeding three (3) years from the issuance of the IRR shall apply. The tiering 
guidelines, to be established by the TWG as part of the IRR, shall reflect 
differentiated transition timeframes based on the readiness and capability of the 
government entities. Government entities deemed capable and ready based on 
defined criteria shall be required to Implement digital collection within a shorter 
transition period while others may be allowed a longer transition period but not to 
exceed three (3) years.
Sec. 13. Information Security and Data Privacy. - Ail data information and 
information and communications technology systems and networks, used for digital 
payments pursuant to the objectives of this Act shall be secured and protected at all 
times. The DICT and the National Privacy Commission shall, in consultation with the 
BSP, define and pt escribe the minimum information security standards for


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compliance of PSPs who are covered by this Act and are not under the oversight and
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regulatory authority of the BSP.
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Sec. 14. Obligations of Payment Systems Providers. - In line with the
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declared policy of this Act, all PSPs shall have the following obligations;
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a) Integrate security and data privacy by design and by default In the
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development stage of the payment systems;
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b) Process personal and sensitive personal Information In the system In
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accordance with any of the criteria for lawful processing provided for
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under relevant laws, rules and regulations;
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c) Implement reasonable and appropriate organizational, physical and
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technical security measures for the protection of personal data and uphold
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the rights of data subjects;
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d) Provide reasonable and timely assistance to NGAs, government
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corporations, LGUs, SUC, and/or merchants. In accordance with relevant
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rules and regulations, to enable them to respond to a request from clients
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to exercise any of their rights and any other correspondence, Inquiry or
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complaint received from a client or other third party in connection with the
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pi ucessing of the personal data in the payment system;
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e) The PSP performing the function of collection of money and/or payment of
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transaction on behalf of the government agency shall, to the extent
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necessary, cooperate with the COA for the examination, audit, and
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settlement of all accounts pertaining to the revenue and receipts, and
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expenditures or uses of funds of all NGAs, government corporations, SUCs,
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and LGUs. The PSP shall allow COA to perform its audit procedures and to
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determine whether collections are complete and use of funds are
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authorized; and
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f) Comply with the requirements indicated in the standard terms of reference
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or standard minimum terms and conditions that may be Issued by the
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TWG.
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Sec. 15. Penalties and Sanctions. - Without prejudice to the penalties and
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sanctions provided in Republic Act No. 11127 or 'The National Payment Systems
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Act" and other laws, whenever any person or entity wilfully violates this Act, rule or
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regulation, directives or orders duly promulgated by the BSP pursuant hereto, the
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person or persons responsible for such violation shall be punished by a fine of not
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less than Two hundred thousand pesos (P200,000.00) or more than Two million
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pesos (P2,000,000.00) or by imprisonment of not less than two (2) years nor more
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than ten (10) years, or both, at the ciscretion of the court.
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Sec. 16. Interpretation. - Nothing in this Act shall be construed to exempt
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government funds in the possession of private entities from the constitutional
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authority and duty of the COA to examine, audit, and settle ail accounts pertaining
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to the revenue and receipts of, and expenditures or uses of funds and property,
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owned or held in trust by, or pertaining to, the government. All digital payments
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involving government transactions under this Act shall be subject to post-audit of the
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COA. Accordingly, the COA shall promulgate the pertinent rules and regulations for
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all transactions covered by thib Act.
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Sec. 17. Appropriations. - Government entities may be allowed to include in
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their respective budgets amounts that will cover the reasonable costs of establishing
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and maintaining the infrastructure, system and/or processes adjustments as well as
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transaction fees that they may shoulder in connection with the implementation of
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digital payments, including but not limited to, merchant discount rate, processing
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fees, cash-out fees and administration fees: Provided, That the release of said
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budget may be conditioned on the actual adoption of digital payments by the
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concerned government entities.
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Government entities may also top-up cash assistance with a standard amount
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to cover any transaction fees that may be incurred by recipients or beneficiaries
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when claiming or withdrawing said cash assistance from their respective transaction
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accounts.
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The amount necessary for the implementation of the provisions of this Act
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shall be taken from the current year's budgets of the NGAs, government
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corporations, SUCs and LGUs. Thereafter, such sums as may be necessary for the
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continued Implementation of the Act shall be incorporated In the annual General
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Appropriations Act, corporate operating budget, or appropr?ation ordinance, as the
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case may be.
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Sec. 18. Implementing Rules end Regulations. - The BSP, in coordination with
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the DBM, COA, DOF, BTr, BIR, DICT, DOST, DTI, and other relevant agencies, shall
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promulgate the rules and regulations Implementing the provisions of this Act within
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ninety (90) days from Its effectivlty.
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Sec. 19. Separability Clause. - If any section or part of this Act Is held
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unconstitutional or Invalid, the other sections or provisions not otherwise affected
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shall remain in full force and effect.
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Sec. 20. Repealing Clause. - All laws, decrees, executive orders, rules and
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regulations contrary to or Inconsistent with the provisions of this Act are hereby
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repealed or modified accordingly.
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Sec. 21. Effectivlty. - This Act shall take effect fifteen (15) days after Its
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publication In at least two (2) national newspapers of general circulation, whichever
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comes earlier.
Approved,
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