TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S. No.
)
SENATE
947
hj jpffi.:!’ of i •' —
25 AUG-5 P4 -08
Introduced by Senator Jinggoy 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
Since 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, while 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 implemented with the help of digital payment
1https://www.bsp.gov.ph/PavmentAndSettlement/State of Dieital Payments in the Philippines (2021 Edit! 
on).pdf


partners, which fast tracked the distribution of emergency financial aid to the 
beneficiaries, even in remote areas. To this date, many other products and services 
of both the private sector and the government, are being offered and availed of 
using digital financial transactions. In fact, 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 inclusive."2
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 collections as embodied under 
Executive Order No. 170, s. 2022.
Immediate passage of this bill is sought.
^^GSOY EJERCITO ESTRADA
1 https://www.betterthancash.orR/whv-diRital-pavments


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
25 AUG-5 P4:08
SENATE 
S. No. 947
\\Yr\
Introduced by Senator Jinggoy Ejercito Estrada
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assem bled:
1 
Section 1. Short Title. - This Act shall be known as the "Use of Digital
2 
Payments Act".
3 
Sec. 2. Declaration of Policy. - The State recognizes the vital role of
4 
information and communications technology particularly financial technology,
5 
towards financial inclusion advancement and nation-building. The State also
6 
recognizes the need of promoting ease of doing business and efficiency delivery of
7 
goods and services to the general public. Towards this end, the State shall promote
8 
financial inclusion through the use of safe, secure and efficient digital payments. In
9 
various transactions of the government and the public - particularly for payments to
10 
government, and government disbursements to the public, which includes but is not
11 
limited to payments to or by private institutions, merchants, and beneficiaries, the
12 
State shall optimize the use of financial technologies and innovative payment
13 
systems for financial transactions and to strengthen financial inclusion. In so doing,
14 
the State shall encourage and facilitate the adoption of digital payments in a
15 
technology-neutral manner, where one technology is not unreasonably favored or
16 
given undue advantage over another.


1 
Sec. 3. Objectives. - This Act aims to facilitate transactions, arrangement, or
2 
exchanges of goods and services by promoting the universal use of safe, affordable,
3 
and efficient digital payments in financial transactions of the government and the
4 
general public.
5 
This Act also aims to enhance the efficiency and transparency of government
6 
disbursements, and expedite the delivery of social protection assistance and the
7 
distribution of financial aid to the most vulnerable sectors of society, especially in
8 
times of crisis, pandemics or calamities.
9 
Sec. 4. Definition of Terms. - As used in this Act, the following terms shall
10 
mean:
11 
a) Access device - refers to any card, plate, code, account number,
12 
electronic serial number, personal identification number, mobile device, or
13 
other information and communications technology service, equipment, or
14 
Instrumental Identifier, or other means of account access that can be
15 
used to obtain money, goods, services, or any other thing of value, or to
16 
initiate a transfer of funds in electronic form;
17 
b) Account-based disbursement - refers to the disbursement of funds such
18 
as salaries, wages, allowances, and social benefits, among others, directly
19 
into the transaction account of the intended recipient held in any Bangko
20 
Sentral ng Pilipinas (BSP)-supervised entity as chosen and specified by the
21 
intended recipient;
22 
c) Basic deposit account (BDA) - refers to the deposit product offered by
23 
banks as defined under the BSP Manual of Regulations for Banks and its
24 
implementing guidelines, or an account designed to promote financial
25 
inclusion, specifically for the unserved and underserved sectors, to receive
26 
and make payments and have a facility for store of value. It is
27 
characterized by the following features: a) liberalized customer
28 
onboarding; b) minimal opening amount; and c) no maintaining balance
29 
requirement and no dormancy charges;
30 
d) Digitai coiiection - refers to a mode of payment wherein businesses and
31 
citizens make payments to the government, including but not limited to
32 
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 government 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;


1 
I) Merchant - refers to a person or entity engaged in buying and selling
2 
merchandise, purchasing of services, skills or expertise, 
and 
leasing of
3 
goods and services;
4 
m) Micro-payment transactions - refers to low-value payments including but
5 
not limited to payments to sari-sari store owners, wet market vendors, as
6 
well as tricycle and jeepney drivers, the actual thresholds of which shall be
7 
determined by the BSP, pursuant to the objectives of this Act;
8 
n) Payment Service Provider (PSP) - refers to an entity, such as bank or non-
9 
bank electronic money issuer, that provides payments services to end-
10 
users, such as consumers, merchants, 
and billers, including government
11 
institutions;
12 
o) Payment system - refers to the set of payment instruments, processes,
13 
procedures and participants that ensures the circulation of money or
14 
movement of funds, which comply with the requirements set forth under
15 
Republic Act No. 11127 or the National Payment System Act;
16 
p) Transaction Account - refers to an account, such as but not limited to a
17 
BDA, or e-money account held with a BSP-supervised financial institution
18 
that can be used to store, send, and receive funds.
19 
Sec. 5. Adoption of Digital Payments for Government Disbursements. - All
20 
government entities, including but not limited to national government agencies
21 
(NGAs), foreign-based government agencies, all government corporations, local
22 
government units (LGUs), State Universities and Colleges (SUCs), and local
23 
universities and colleges (LUCs), are hereby mandated to utilize safe and efficient
24 
digital disbursement in the payment of goods, services and other disbursements
25 
including but not limited to cash assistance and payments of salaries, wages,
26 
allowances, and honoraria of its employees, whatever nature of appointment.
27 
Government entities shall be allowed to disburse funds directly into the recipient's or
28 
beneficiary's transaction account held in government or private financial institutions
29 
without the need for special arrangement with each of these financial institutions.
30 
For this purpose, said government entities may use the automatic debit
31 
arrangement, interoperable electronic fund transfer or any other appropriate facility
32 
of its government servicing PSP.


1 
Accountable officers of the government entities shall observe due diligence in
2 
ensuring the accuracy of the recipient's or beneficiary's identity. Uses of government
3 
funds through direct crediting shall remain transparent to state auditors.
4 
Government entities shall be responsible for preparing the payment
5 
instruction with the necessary details, including the recipient's or beneficiary's name,
6 
transaction account details, and amount, among others, only after proper
7 
authorization in accordance with established accounting and auditing rules and
8 
regulations.
9 
The government servicing PSP shall carry out the payment instruction and
10 
submit the verified list of successful and failed fund transfers and other relevant
11 
details to the government entity disbursing the fund. Subject to agreement with the
12 
government entity, the government servicing PSP may collect reasonable fees from
13 
the government entity for the electronic fund transfer services.
14 
In case of unsuccessful digital disbursement, there shall be a recovery
15 
mechanism that will ensure the continuity of delivery of payment services: Provided,
16 
That in cases of calamities or other emergencies, where payments through digital
17 
means may be affected, non-digital payout channels may be explored.
18 
Sec. 6. Adoption of Digitai Payments for Government Coiiections. - All
19 
government entities, including but not iimited to national government agencies
20 
(NGAs), foreign-based government agencies, all government corporations, local
21 
government units (LGUs), State Universities and Colleges (SUCs) and local
22 
universities and colleges (LUCs), shall offer digital collection as a mode, in addition
23 
to acceptance of cash payment, for the collection of taxes, fees, tolls, imposts and
24 
other revenues, including non-income collections and receipts.
25 
Government entities shall utilize secure payment processing solutions to
26 
ensure acceptance of various digital payment methods. For this purpose, said
27 
government entities may engage the services of established PSPs: Provided, That
28 
government entities shall avail only of interoperable digital payment solutions.
29 
Notwithstanding any law to the contrary, partner PSP of a government entity shall
30 
not be limited to government servicing banks.
31 
Sec. 7. Adoption of Interoperabie Digital Payment Soiutions. - The BSP shall
32 
implement initiatives that aim to accelerate the adoption by all PSPs of interoperable


1 
digital payment technologies and appropriate standards thereof, such as but not
2 
limited to the National Quick Response (QR) Code Standard meant to hasten the
3 
interoperability of QR-driven payment services and eliminate the need for merchants
4 
and clients to maintain several accounts.
5 
In addition, NGAs, government corporations, SUCs, LGUs, and merchants
6 
shail undertake measures to promote the adoption of the Open Finance Framework
7 
in accordance with the guideiines set forth under the applicabie BSP rules and
8 
regulations which will enable sharing of customer-permissioned financial data and
9 
foster adherence to data security and privacy standards.
10 
The digital payment solutions adopted by government entities shall allow for
11 
real-time receipt of funds by the recipient government entity, immediate issuance of
12 
electronic invoices and/or official receipts to payors, regular audit reports, and other
13 
technicai features that will aid in the fulfilment of the objectives of this Act. To
14 
ensure that these digital payment solutions adhere to applicabie international
15 
standards on information security, data privacy, and electronic data interchange
16 
between the financial institutions, among others, government entities shall avail of
17 
digital payment solutions under the BSP's National Retail Payment System
18 
Framework.
19 
Existing agreements between government entities and PSPs shall be honored
20 
until the respective terms thereof expire: Provided, That parties concerned shall
21 
endeavor, within one year from the effectivity of this Act, to implement amendments
22 
to such agreements with intention to remove provisions detrimental to public
23 
interest. In ali instances, coliection and payment schemes that prevent transparency
24 
and accountability over public funds, as well as arrangements disadvantageous to
25 
the government, shall be discontinued.
26 
There shall be a Technical Working Group (TWG) composed of the
27 
Commission on Audit (COA), Department of Budget and Management (DBM),
28 
Department of Finance (DOF), Bureau of the Treasury (BTr), Bureau of Internal
29 
Revenue (BIR), the Government Policy Procurement Board, and other relevant
30 
agencies that wiil provide guidance and promote cost-efficiency and transparency in
31 
procurement of digital payment solutions by government entities. Consistent with


1 
the respective mandates of the member-agencies, and in coordination with the COA,
2 
the TWG shall have the following powers and functions:
3 
a) Oversee and monitor the procurement of digital payment solutions by
4 
government entities and ensure that the same is in accordance with
5 
existing laws, rules and regulations;
6 
b) Consider the formulation of standard terms and conditions for PSPs, in
7 
consultation with the BSP and COA. Pursuant to its mandate, the GPPB
8 
may also issue specific procurement guidelines for the engagement of
9 
PSPs;
10 
c) Resolve issues relative to the implementation of this Act, without prejudice
11 
to the individual member-agencies resolving such concerns pursuant to
12 
their respective 
mandates;
13 
d) Call on any department, agency or office under the Executive Branch for
14 
the effective implementation of this Act; and
15 
e) Perform such other function pursuant to the fulfilment of the objectives of
16 
this Act.
17 
Sec. 8. Establishment of a Government Payment Gateway. - The BSP, in
18 
consultation with the DOF, DBM, COA, Department of Information and
19 
Communications Technology (DICT), BIR, Bureau of Customs (BOC), Bureau of the
20 
Treasury (BTr), digital banking experts, academe, and other appropriate public
21 
sector and banking industry stakeholders, may cause the establishment of a
22 
government payment gateway through which all government entities may process
23 
digital payments made to them through PSPs, websites, mobile phone applications,
24 
or other access devices.
25 
The government payment gateway shall allow for real-time settlement of
26 
accounts and receipt of funds by the recipient government entity, immediate
27 
issuance of electronic invoices and/or official receipts to payors, regular audit
28 
reports, interoperability between digital payment technologies, and other technical
29 
features that will aid in the fulfilment of the objectives of this Act. Said gateway shall
30 
adhere to relevant international standards on information security, data privacy, and
31 
electronic data interchange between financial institutions.


1 
Sec. 9. Digital Payment Capability of Merchants. - To accelerate the adoption
2 
of digital payment, LGUs shall, by ordinance, encourage and grant monetary and
3 
non-monetary incentives to merchants within their localities to establish and/or
4 
outsource arrangements and/or mechanisms that would enable them to receive
5 
payments from clients and make payments to creditors and suppliers using digital
6 
channels.
7 
LGUs shall ensure that merchants in their jurisdictions have access to
8 
appropriate digital payment solutions and have the capacity to effectively use the
9 
same, with due consideration to small and micro-merchants, including, but not
10 
limited to, market vendors, tricycle operators and food stalls. The LGU shall extend
11 
assistance to small and micro-merchants to facilitate their adoption of digital
12 
transaction capability. The BSP, Department of Trade and Industry (DTI), DILG, and
13 
DICT shall provide capacity building for the NGAs, government corporations, SUCs,
14 
LGUs, and merchants on the use of digital payments.
15 
Sec. 10. Promotion of Digital Payment Transactions. - To optimize the
16 
benefits of digital payments, scale up financial inclusion, and promote sustainability,
17 
all government entities shall prioritize the use of safe and efficient digital payment in
18 
their financial transactions.
19 
All government entities covered by this Act shall also adopt a comprehensive
20 
incentive framework for selected financial transactions to encourage the use of
21 
digital payments. LGUs shall, likewise, grant incentives for merchants providing
22 
efficient digital payment systems.
23 
The BSP, in coordination with relevant stakeholders, shall promote measures
24 
on financial and digital literacy, and consumer protection to strengthen the public's
25 
trust in digital payment transactions.
26 
To enable the general public to adopt digital payments, micro-payment
27 
transactions shall be subject to graduated pricing or be rendered free of any service
28 
charge as determined by the BSP in consultation with the merchants and the
29 
payment services industry, as may be represented by the BSP-accredited payment
30 
system management body.


1 
The Dicr shall implement measures to further enhance the availability,
2 
accessibility, reliability, and cost-efficiency of internet services to support the
3 
Government's program on the digitalization of financial transactions.
4 
Sec. 11. Multi-Year Roadmap for Digital Payment Adoption. - The BSP, in
5 
collaboration with relevant government entities, shall prepare and regularly update a
6 
multi-year roadmap on digital payments to ensure the timely implementation and
7 
optimal realization of the objectives of this Act.
8 
The Multi-year Roadmap shall be aligned with the e-government masterplan
9 
formulated by the DICT in consultation with other key government agencies, and
10 
shall, among others, set targets and outcomes, such as but not limited to the
11 
widespread adoption of digital payments by merchants, for a minimum period of five
12 
(5) years, and include strategic public and private intervention and possible
13 
government programs and projects. The roadmap shall be subject to annual review.
14 
Sec. 12. Transitory Provision. - Government entities shall be responsible for
15 
ensuring proper transition of their respective agency's disbursement and collection
16 
procedures and policies to digital payments.
17 
Digital disbursement shall be implemented within six (6) months from the
18 
issuance of the implementing rules and regulations (IRR) of this Act.
19 
For the implementation of digital collections, a tiered transition period not
20 
exceeding three (3) years from the issuance of the IRR shall apply. The tiering
21 
guidelines, to be established by the TWG as part of the IRR, shall reflect
22 
differentiated transition timeframes based on the readiness and capability of the
23 
government entities. Government entities deemed capable and ready based on
24 
defined criteria shall be required to implement digital collection within a shorter
25 
transition period while others may be allowed a longer transition period but not to
26 
exceed three (3) years.
27 
Sec. 13. Information Security and Data Privacy. - All data information and
28 
information and communications technology systems and networks, used for digital
29 
payments pursuant to the objectives of this Act shall be secured and protected at all
30 
times. The DICT and the National Privacy Commission shall, in consultation with the
31 
BSP, define and prescribe the minimum information security standards for


1 
compliance of PSPs who are covered by this Act and are not under the oversight and
2 
regulatory authority of the BSP.
3 
Sec. 14. Obligations of Payment Systems Providers. - In line with the
4 
declared policy of this Act, all PSPs shall have the following obligations:
5 
a) Integrate security and data privacy by design and by default in the
6 
development stage of the payment systems;
7 
b) Process personal and sensitive personal information in the system in
8 
accordance with any of the criteria for lawful processing provided for
9 
under relevant laws, rules and regulations;
10 
c) Implement reasonable and appropriate organizational, physical and
11 
technical security measures for the protection of personai data and uphold
12 
the rights of data subjects;
13 
d) Provide reasonable and timely assistance to NGAs, government
14 
corporations, LGUs, SUC, and/or merchants, in accordance with relevant
15 
rules and regulations, to enable them to respond to a request from clients
16 
to exercise any of their rights and any other correspondence, inquiry or
17 
complaint received from a client or other third party in connection with the
18 
processing of the personal data in the payment system;
19 
e) The PSP performing the function of collection of money and/or payment of
20 
transaction on behalf of the government agency shall, to the extent
21 
necessary, cooperate with the COA for the examination, audit, and
22 
settlement of all accounts pertaining to the revenue and receipts, and
23 
expenditures or uses of funds of ail NGAs, government corporations, SUCs,
24 
and LGUs. The PSP shall allow COA to perform its audit procedures and to
25 
determine whether collections are complete and use of funds are
26 
authorized; and
27 
f) Comply with the requirements indicated in the standard terms of reference
28 
or standard minimum terms and conditions that may be issued by the
29 
TWG.
30 
Sec. 15. Penalties and Sanctions. - Without prejudice to the penalties and
31 
sanctions provided in Republic Act No. 11127 or "The National Payment Systems
32 
Act" and other laws, whenever any person or entity wilfully violates this Act, rule or
10


1 
regulation, directives or orders duly promulgated by the BSP pursuant hereto, the
2 
person or persons responsible for such violation shall be punished by a fine of not
3 
less than Two hundred thousand pesos (P200,000.00) or more than Two million
4 
pesos (P2,000,000.00) or by imprisonment of not less than two (2) years nor more
5 
than ten (10) years, or both, at the discretion of the court.
6 
Sec. 16. Interpretation. - Nothing in this Act shall be construed to exempt
7 
government funds in the possession of private entities from the constitutional
8 
authority and duty of the COA to examine, audit, and settle all accounts pertaining
9 
to the revenue and receipts of, and expenditures or uses of funds and property,
10 
owned or held in trust by, or pertaining to, the government. All digital payments
11 
involving government transactions under this Act shall be subject to post-audit of the
12 
COA. Accordingly, the COA shall promulgate the pertinent rules and regulations for
13 
all transactions covered by this Act.
14 
Sec. 17. Appropriations. - Government entities may be allowed to include In
15 
their respective budgets amounts that will cover the reasonable costs of establishing
16 
and maintaining the infrastructure, system and/or processes adjustments as well as
17 
transaction fees that they may shoulder in connection with the implementation of
18 
digital payments, including but not limited to, merchant discount rate, processing
19 
fees, cash-out fees and administration fees: Provided, That the release of said
20 
budget may be conditioned on the actual adoption of digital payments by the
21 
concerned government entities.
22 
Government entities may also top-up cash assistance with a standard amount
23 
to cover any transaction fees that may be incurred by recipients or beneficiaries
24 
when claiming or withdrawing said cash assistance from their respective transaction
25 
accounts.
26 
The amount necessary for the implementation of the provisions of this Act
27 
shall be taken from the current year's budgets of the NGAs, government
28 
corporations, SUCs and LGUs. Thereafter, such sums as may be necessary for the
29 
continued implementation of the Act shall be incorporated in the annual General
30 
Appropriations Act, corporate operating budget, or appropriation ordinance, as the
31 
case may be.
11


1 
Sec. 18. Implementing Rules and Regulations. - The BSP, in coordination with
2 
the DBM, COA, DOF, BTr, BIR, DICT, DOST, DTI, and other relevant agencies, shall
3 
promulgate the rules and regulations implementing the provisions of this Act within
4 
ninety (90) days from its effectivity.
5 
Sec. 19. Separability Clause. - If any section or part of this Act is held
6 
unconstitutional or invalid, the other sections or provisions not otherwise affected
7 
shall remain in full force and effect.
8 
Sec. 20. Repealing Clause. - All laws, decrees, executive orders, rules and
9 
regulations contrary to or inconsistent with the provisions of this Act are hereby
10 
repealed or modified accordingly.
11 
Sec. 21. Effectivity. - This Act shall take effect fifteen (15) days after its
12 
publication in at least two (2) national newspapers of general circulation, whichever
13 
comes earlier.
Approved,
12