TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE 
S. No. 99
25 JUL-3 P5:02
Introduced by Senator MARK A. VILLAR
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS
EXPLANATORY NOTE
The widespread disruption caused by the Covid-19 crisis accelerated the rise of 
online or digital transactions. The pandemic raised awareness and made a necessary 
impact to individuals, businesses, and the government, to use digital payments.1
In 2019, it was calculated that the digital merchant payments grew by 33%, it 
continues to be the largest payment use-case in terms of volume. This positive 
trajectory remained in the first half of 2020 as it increased to 25% by the following 
year.2
Digital peer-to-peer (P2P) payments grew by 56% in 2019 contributed by the 
increase in the use of wallet-to-wallet transfers. However, in the first half of 2020, the 
said growth has stunted and decreased by 11%. Despite this, they remain to be the 
main actors that contributed to the growth of digital payments in the Philippines.3
1State of Digital Payments in the Philippines, (n.d.). Retrieved August 4, 2022.
fromhttps://www.bsp.gov.ph/PaymentAndSettlement/State_of_Digital_PaymentsJn_the_Philippines_(2021 Edition 
).pdf
2 Euromonitor data, 2020, and Dalberg estimations as cited in State of Digital Payments in the Philippines.
(n.d.). Retrieved August 4, 2022, from https://www.bsp.gov.Dh/PavmentAndSettlement/State of Digital Payments in the 
Philippines(2021 Edition).pdf
3 Electronic Money Issuers report, 2019, BSP-TRISD, as cited in Highlights report state of Digital Payments in the
Philippines.
(n.d.). Retrieved August 4, 2022, from
https://www.bsp.gov.ph/PaymentAndSettlement/State_of_Digital_Payments_in_the_Philippines_(2021_Edition).pdf


Contribution of digital payments to total retail transactions increased from 20.1 
percent in 2020 to 30.3 in 20214, as merchants, consumers, and the government 
embrace the use of digital payments. BSP optimistically stated that the numbers show 
that the target 50%5 of retail payment transactions can now be closely achieved.6
With the rapid digitalization of commercial transactions, it is necessary to create 
an enabling regulatory environment to advance the adoption of digital payments and 
reap its benefits. The government must spearhead the use of digital payments such 
as in facilitating the distribution of financial assistance to beneficiaries and ultimately 
expand financial inclusion to the most vulnerable sectors of the society7.
Moreso, adoption of digital payment will result in the delivery of efficient, 
convenient, secured, and transparent government services. Not to mention the 
potential to transform the Philippines into an e-commerce territory, creating more 
opportunities and establishing connections with its trade partners.
Thus, this bill mandates the promotion of adopting digital payments for financial 
transactions of the government and all merchants and for other purposes.
In view of the foregoing, approval of this bill is hereby earnestly sought.
MARK A. VILLAR
4 BSP as cited in Agcaoili, L. (n.d.)- Digital payment now make up a third of retail transactions - BSP. Philstar.com. 
https://www.philstar.eom/business/2022/07/09/2194031/digital-payment-now-make-third-retail-transactions-bsp
5 BSP Digital Payments Transformation Roadmap 2020-2023 1. Vision and Strategic Outcomes (Targets by 2023). (n.d.). 
https://www.bsp.gov.ph/Media_And_Researc h/Primers%20Faqs/Digital%20Payments%20Transformation%20Roadmap%2 
0
6 Id. At 4
7 Executive Order 170, s. of 2022


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE 
S. No. 99
25 JUL-3 P5:02
Introduced by Senator MARK A. VILLAR
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Short Title. - This Act shall be known and cited as the "Promotion
2 
of Digital Payments Act."
3 
SEC. 2. Declaration of Policy. - The State recognizes the vital role of information
4 
and communications technology in nation-building. The State also recognizes the need
5 
of promoting ease of doing business and efficient delivery of goods and services to
6 
the general public. Towards this end, the State shall promote financial inclusion,
7 
optimize the use of technology and innovative payment systems for financial
8 
transactions, and promote the electronic conveyance of payment for various
9 
transactions with the government, to and among business entities and merchants, and
10 
among the general public.
11 
SEC. 3. Objective. - This Act aims to facilitate transactions, arrangements, or
12 
exchanges of goods and services by promoting the universal use of safe and efficient
13 
digital payments in financial transactions of the government and the general public.
14 
SEC. 4. Definition of Terms. - As used in this Act:
15 
(a) Access device refers to any card, plate, code, account number, electronic
16 
serial number, personal identification number, or other telecommunications service,
17 
equipment or instrumental identifier, or other means of account access that can be


1 
used to obtain money, goods, services, or any other thing of value or to initiate a
2 
transfer of funds other than a transfer originated solely by paper instrument;
3 
(b) Digital payments refer to monetary payment transactions between two (2)
4 
parties through a digital payment instrument in which both the payer and the payee
5 
use an electronic channel;
6 
(c) Merchant refers to a person or entity engaged in buying and selling
7 
merchandise, purchasing goods and services, skills, or expertise, and leasing of goods
8 
and services. It also includes credit-granting entities, lending institutions, pawnshops,
9 
remittance companies and other money service business, except financial institutions
10 
supervised by the Bangko Sentrai ng Pilipinas (BSP), which shall be governed by
11 
specific BSP regulations and requirements on digital services;
12 
(d) Payment system refers to the set of payment instruments, processes,
13 
procedures and participants that ensures the circulation of money or movement of
14 
funds which comply with the requirements set forth under Republic Act No. 11127,
15 
otherwise known as "The National Payment Systems Act"; and
16 
(e) Payment service provider (PSP) refers to an entity that provides payment
17 
services to end-users, such as consumers, merchants, and billers, including
18 
government institutions.
19 
SEC. 5. Use of Digital Payments. - All national government agencies (NGAs),
20 
government-owned or -controlled corporations (GOCCs), and local government units
21 
(LGUs) are hereby mandated to utilize safe and efficient electronic or digital means of
22 
receiving payment for taxes, fees, tolls, imposts, and other revenues and for the
23 
payment of goods, services, and other disbursements. To this end, government
24 
entities may be allowed to include in their respective budgets the amounts that will
25 
cover the cost of establishing and maintaining the infrastructure, system and process
26 
adjustments as well as transaction fees that they may shoulder in connection with the
27 
implementation of digital payments, including merchant discount rate, processing
28 
fees, cash out fees, administration fees: Provided, That the release of said budget
29 
may be conditioned on the actual adoption of digital payments by the concerned
30 
government entities.
31 
To facilitate compliance with this Act, NGAs, GOCCs, and LGUs shall adopt
32 
account-based disbursements whereby target recipients directly receive government


1 
payments into their transaction accounts. These government entities may create their
2 
respective digital payment technical support and maintenance service units which shall
3 
be responsible for troubleshooting and maintaining coordination with the PSP partner
4 
for technical and other concerns within the agency. They shall also be responsible for
5 
ensuring the proper transition of their respective agency's payments and disbursement
6 
procedures and policies to digital payments. The creation of the technical support and
7 
maintenance service units shall be without prejudice to any technical support
8 
arrangement between the agency and the PSP partner pursuant to a contract or
9 
agreement: Provided, That, the contract or agreement shall be subject to the
10 
applicable regulations of the BSP.
11 
The BSP shall accelerate the adoption by all PSPs of the national quick response
12 
(QR) code standard to hasten the interoperability of QR-driven payment services and
13 
eliminate the need for merchants and ciients to maintain severai accounts.
14 
The Government Procurement Policy Board shall, in coordination with the BSP,
15 
issue guidelines to be observed when procuring the services of a PSP that provide
16 
digital payment: Provided, That, government entities shall avail only of interoperable
17 
digital payment solutions.
18 
Notwithstanding any law to the contrary, a partner PSP of a government entity
19 
shali not be limited to government financial institutions.
20 
SEC. 6. Digitai Payment Capabiiity of Merchants. - To accelerate the adoption
21 
of digital payment, LGUs shall, by ordinance, require merchants within their localities
22 
to establish or outsource arrangements or mechanisms that would enable them to
23 
receive payments from clients and make payments to creditors and suppliers in digital
24 
form as a prerequisite for the approval or renewal of their business permits. No new
25 
or renewal of business permit shall be approved unless the merchant concerned show
26 
to the satisfaction of the LGU that a functional digital payment system accessible by
27 
mobile phone or other access devices is installed or provided by a duly registered PSP
28 
in the merchant partner's place of business.
29 
The LGUs shall ensure that merchants in their jurisdictions have access to
30 
appropriate digital payment solutions and have the capacity to effectively use the
31 
same, with due consideration to small and micro-merchants, including market
32 
vendors, tricycle operators and food stalls. The LGU shall extend assistance to smaii


1 
and micro-merchants to facilitate their adoption of digital transaction capability. The
2 
BSP, Department of Trade and Industry (DTI), Department of Interior and Local
3 
Government (DILG), and the Department of Information and Communications
4 
Technology (DICT) shall also facilitate measures to provide capacity building for the
5 
NGAs, GOCCs, LGUs, and merchants on the use of digital payments.
6 
SEC. 7. Promotion of Digital Payment Transactions. - To optimize the benefits
7 
of this technological innovation, scale up financial inclusion, and promote
8 
sustainability, NGAs, GOCCs, and LGUs shall prioritize the use of safe and efficient
9 
digital payment in their financial transactions.
10 
The NGAs, GOCCs, and LGUs shall also explore the feasibility of adopting a
11 
comprehensive incentive framework for selected financial transactions to encourage
12 
the availment of digital payments. Moreover, LGUs may impose reduced fees or grant
13 
other incentives for merchants providing efficient digital payment systems.
14 
The BSP shall, in coordination with relevant stakeholders, promote measures
15 
on financial and digital literacy, and consumer protection to strengthen the public's
16 
trust in digital payment transactions.
17 
The Department of Science and Technology and the DICT shall implement
18 
measures to further enhance the availability and cost of internet connection to support
19 
the government's program on the digitalization of financial transactions.
20 
SEC. 8. Implementing Rules and Regulations. - The BSP shall, in coordination
21 
with the Department of Budget and Management, DTI, DICT, and DILG, promulgate
22 
the rules and regulations implementing the provisions of this Act within ninety (90)
23 
days from its effectivity.
24 
Sec. 9. Separability Clause. - If for any reason, any part or provision of this Act
25 
is declared invalid or unconstitutional, the remaining parts or provisions not affected
26 
remain in full force and effect.
27 
Sec. 10. Repealing Clause. - All laws, presidential decrees, executive orders,
28 
memoranda, circulars and other issuances or parts thereof, which are inconsistent
29 
with this Act, are hereby repealed or modified accordingly.
30 
Sec. 11. Effectivity. - This Act shall take effect fifteen (15) days after its
31 
publication in the Official Gazetteor at least two (2) newspapers of general circulation.
Approved,