NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
SENATE
S.B. No. Oil
wM Senate
VVKi' il< r^!
iJrrj
(©{ficf of S'rtrrtni'j!
*22 JUL25 A10:49
RECEIVED BY.
Introduced by SEN. WIN ‘BATCHALIAN
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR
OTHER PURPOSES
EXPLANATORY NOTE
The significance of cashless transactions and digital payments was highlighted 
during the pandemic, when people are restricted to leave their homes and were 
required to resort to other modes of payment which do not involve cash. The growth 
and development of digital payments is expected as more people find it more 
convenient and experience the ease of doing transactions without cash.
Consistent with the State policy under Republic Act No. 11032 or the Ease of 
Doing Business and Efficient Government Service Delivery Act of 2018 to promote 
efficient delivery of government transactions, President Duterte ordered all covered 
agencies under Executive Order No. 170 dated May 12, 2022, to utilize safe and 
efficient digital disbursement methods in the payment of goods, services and other 
disbursements, including the distribution of financial assistance, payment of salaries, 
wages, allowances and other compensation to employees. This is in line with the 
government's effort to develop an Inclusive digital financial ecosystem.
Thus, this bill airr,s to institutionalize the a jovementioned Executive Order and 
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. Covered agencies may be 
allowed to include in their respective budgets amounts that will cover transaction fees 
that they may shoulder in connection with the implementation of digital payments. 
National government agencies, government-owned and controlled corporations, and 
local government units shall also explore the feasibility of adopting a comprehensive 
incentive framework for selected financial transactions to encourage the availment of 
digital payments
In view of the foregoing, passage of this bill is earnestly s^jght.
WIN GATCHAtlAN


NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
S.B. No.
SENATE
811
of tf)? ;iTf.irp
*22 JUL25 A10:49
RECEIVED BY:
Introduced by SEN. WIN GATCHALIAN
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 the House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Shod Title. -—This Act shall be known as the "Use of Digital
2 
Payments Act.
3
4 
SEC. 2. Declaration of Policy. — The State recognizes the vital role of
5 
information and communications technology, particularly financial technology,
6 
towards financial inclusion advancement and nation-building. The State also
7 
recognizes the need of promoting ease of doing business and efficient delivery of good
8 
and services to the general public.
9 
Towards this end, the State shall promote financial inclusion through the use
10 
of safe, secure, reliable and efficient digital payment systems. In various transactions
11 
of the government and the public — particularly for payments to government, and
12 
government disbursements to the public, which includes but is not limited to payments


1 
to or by private institutions, merchants, and beneficiaries, the State shall optimize the
2 
use of financial technologies and innovative payment systems for financial transactions
3 
to strengthen financial inclusion. In so doing, the State shall encourage and facilitate
4 
the adoption of digital payments in a technology-neutral manner, where one
5 
technology is not unreasonably favored or given undue advantage over another.
6
7 
SEC. 3. Objective. — This Act aims to facilitate transactions, arrangements, or
8 
exchanges of goods and services by promoting the universal use of safe, affordable,
9 
reliable and efficient digital payments In financial transactions of the government and
10 
the general public.
11
12 
SEC. 4. Definition of Terms. —As used in this Act, the following terms shall
13 
mean:
14 
(a) "Access devicb' refers to any card, plate, code, account number, electronic
15 
serial number, personal identification number, mobile device, or other information and
16 
communications technology service, equipment or instrumental identifier, or other
17 
means of account access that can be used to obtain money, goods, services, or any
18 
other thing of value, or to initiate a transfer of funds in electronic form;
19 
(b)Account-based disbursement1 refers to the disbursement of funds such as
20 
salaries, wages, allowances, and social benefits, among others, directly into the
21 
transaction account of the intended recipient held in any Bangko Sentral ng Pilipinas
22 
(BSP)-supervised entity as chosen and specified by the intended recipient;
23 
(c)"Basic deposit account (BDA)''refers to the deposit product offered by banks
24 
as defined under the BSP Manual of Regulations for Banks and its implementing /
25 
guidelines;
26 
(d) "Digital collection"refers to a mode of payment wherein businesses and
27 
individuals make payments to the government, including but not limited to taxes, fees
28 
and tolls, using a digita1 device such as mobile phone, point oi sale, or computer.
29 
Payments can be made with bank transfers, electronic money, and payment cards
30 
including credit, debit, prepaid, or stored-value cards, among others;


1 
(e) "Digital disbursement'^refers to a mode of payment whereby disbursement
2 
of money or equivalent electronic representations of legal tender, for purposes of
3 
paying government expenditures, is made by crediting the target recipient's
4 
transaction account through advice to debit or electronic fund transfer facilitated by
5 
any government agency or instrumentality through their respective servicing bank;
6 
(f) "Digital Payment^' refers to monetary payment transactions between two
7 
parties through a digital payment instrument in which both the payor and the payee
8 
use an electronic channel;
9 
(g) "Electronic fund transfer" refers to a transfer of funds between two
10 
transaction accounts in the same or different BSP-supervised financial institutions
11 
which are initiated and received using electronic devices and channels to transmit
12 
payment instructions;
13 
(h) "Electronic money (e-money)" refers to electronically-stored monetary
14 
value which is issued in accordance with the BSP Manual of Regulations for Banks and
15 
the Manual of Regulations for Non-Bank Financial Institutions;
16 
(i) "Financial inclusion"refers to the state wherein there is effective access to
17 
a wide range of financial products and services for all Filipinos;
18 
0) "Government Servicing Payment Service Provider (PSP)"refers to bank and
19 
non-bank PSPs authorized to accept government funds and perform payment services
20 
on behalf of government entities. This includes authorized government depository
21 
banks (AGDBs) as defined by the Department of Finance (DOF) regulations;
22 
(k) "Information security standards"refers to standards which aim to protect
23 
and secure the confidentiality, integrity, availability, authenticity, and non-repudiation
24 
of information and the data privacy of users of any digital payment platforms and
25 
other parties involved therein;
26 
(I) "Merchant" ref ers to a person or entity engaged in buying and selling
27 
merchandise, purchasing of services, skills, or expertise, and leasing of goods and
28 
services;
29 
(m) "Micro-payment transactions" refers to low-value payments including but
30 
not limited to payments to sari-sari store owners, wet market vendors, as well as


1 
tricycle and jeepney drivers, the actual thresholds of which shall be determined by the
2 
BSP, pursuant to the objectives of this Act;
3 
(n) ''Payment Service Provider (PSP)"refers to an entity, such as bank or non-
4 
bank electronic money issuer, that provides payment services to end-users, such as
5 
consumers, merchants, and billers, including government institutions;
6 
(o) "Payment system" refers to the set of payment instruments, processes,
7 
procedures and participants that ensure the circulation of money or movement of
8 
funds, which comply with the requirements set forth under Republic Act No. 11127 or
9 
the National Payment System Act;
10 
(p) "Transaction account" refers to an account, such as but not limited to a
11 
BDA, or e-money account held vvith a BSP-super^/ised financial institution that can be
12 
used to store, send, and receive funds.
13
14 
SEC. 5. Adoption of Digital Payments for Government Disbursements. — All
15 
government entities, including but not limited to national gcvernment agencies
16 
(NGAs), foreign-based government agencies, all government corporations, local
17 
government units (LCDs), State Universities and Colleges (SUCs) and local universities
18 
and colleges (LUCs), are hereby mandated to utilize safe, reliable and efficient digital
19 
disbursement in the payment of goods, services and other disbursements including
20 
but not limited to cash assistance and payment of salaries, wages, allowances, and
21 
honoraria of its employees, whatever nature of appointment. Government entities
22 
shall be allowed to disburse funds directly into the recipient's or beneficiary's
23 
transaction account held in government or private financial institutions without the
24 
need for special arrangement with each of these fmancia! institutions. For this purpose,
25 
said government entities may use the automatic debit arrangement, interoperable
26 
electronic fund transfer or any other appropriate facility of its government servicing
27 
PSP.
28 
Accountable officers of the government entities shall observe due diligence in
29 
ensuring the accuracy of the recipient's or beneficiary's identity. Uses of government
30 
funds through direct crediting shall remain transparent to state auditors.


1 
Government entities shall be responsible for preparing the payment instruction
2 
with the necessary details, including the recipient's or beneficiary's name, transaction
3 
account details, and amount, among others, only after proper authorization in
4 
accordance with established accounting and auditing rules and regulations.
5 
In case of unsuccessful digital disbursement, there shall be a recovery
6 
mechanism that will ensure the continuity of delivery of payment services: Provided,
7 
That in cases of calamities or other emergencies, where payments through digital
8 
means may be affected, non-digital pay-out channels may be explored.
9
10 
SEC. 6. Adoption of Digital Payments for Government Collections. - All
11 
government entities, including but not limited to NGAs, foreign-based government
12 
agencies, all government corporations, LGUs, SUCs, and LUCs, shall offer digital
13 
collection as a mode, in addition to acceptance of cash payment, for the collection of
14 
taxes, fees, tolls, imposts and other revenues, including non-income collections and
15 
receipts.
16 
Government entities shall utilize secure payment processing solutions to ensure
17 
acceptance of various digital payment methods. For this purpose, said government
18 
entities may engage the services of established PSPs: Provided, That government
19 
entities shall avail only of interoperable digital payment solutions. Notwithstanding any
20 
law to the contrary, partner PSP of a government entity shall not be limited to
21 
government servicing banks.
22
23 
SEC. 7. Adoption of Interoperable Digital Payment Solutions. - The BSP shall
24 
implement initiatves that aim to accelerate the adoption by all PSPs of interoperable
25 
digital payment technologies and appropriate standards thereof, such as but not
26 
limited to the National Quick Response (QR) Code Standard meant to hasten the
27 
Interoperability of QR-driven payment services and eliminate the need for the
28 
merchants and clients to maintain several accounts.
29 
In addition, NGAs, government corporations, SUCs, LUCs, LGUs and merchants
30 
shall undertake measures to promote the adoption of the Open Finance Framework in


1 
accordance with the guidelines set forth under the applicable BSP rules and regulations
2 
which will enable sharing of customer-permissioned financial data and foster
3 
adherence to data security and privacy standards.
4 
The digital payment solutions adopted by government entities shall allow for
5 
real-time receipt of funds by the recipient government entity, immediate issuance of
6 
electronic invoices and/or official receipts to payors, regular audit reports, and other
7 
technical features that will aid in the fulfillment of the objectives of this Act. To ensure
8 
that these digital payment solutions adhere to applicable international standards on
9 
information security, data privacy and electronic data interchange between financial
10 
institutions, among others, government entities shall avail of digital payment solutions
11 
under the BSP's National Retail Payment System Framework.
12 
Existing agreements between government entities and PSPs shall be honored
13 
until the respective terms thereof expire: Provided,, That parties concerned shall
14 
endeavor, within one year from the effectivity of this Act, to implement amendments
15 
to such agreements with intention to remove provisions detrimental to public interest.
16 
In all instances, collection and payment schemes that preven1: transparency and
17 
accountability over public funds, as well as arrangements disadvantageous to the
18 
governments, shall be discontinued.
19 
There shall be a technical working group (TWG) composed of the Commission
20 
on Audit (COA), Department of Budget and Management (DEM), Department of
21 
Finance (DOF), Bureau of Treasury (BTr), Bureau of Internal Revenue (BIR), the
22 
Government Procurement Policy Board (GPPB) and other relevant agencies that will
23 
provide guidance and promote cost-efficiency and transparency in the procurement of
24 
digital payment solutions by government entities. Consistent with the respective
25 
mandates of the member-agencies, and in coordination with the COA, the TWG shall
26 
have the following powers and functions:
27 
a) Oversee and monitor the procurement of digital payment solutions by
28 
government entities and ensure that the same is in accordance with existing
29 
laws, rules and regulations;


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


1 
arrangements and/or mechanisms that would enable them to receive payments from
2 
clients and make payments to creditors and suppliers using digital channels.
3 
LGUs shall ensure that merchants in their jurisdictions have access to
4 
appropriate digital payment solutions and have the capacity to effectively use the
5 
same, with due consideration to small and micro-merchants, including but not limited
6 
to, market vendors, tricycle operators and food stalls. The LGUs shall extend
7 
assistance to small and micro-merchants to facilitate their adoption of digital
8 
transaction capability. The BSP, Department of Trade and Industry (DTI), DILG and
9 
DICT shall provide capacity building for the NGAs, government corporations, LGUs,
10 
SUCs, LUCs, and merchants on the use of digital payments.
11
12 
SEC. 10. Promoticn of Digital Payment Transactions. — To optimize the benefits
13 
of digital payments, scale up financial inclusion, and promote sustainability, all
14 
government entities shall prioritize the use of safe, reliable and efficient digital
15 
payment in their financial transactions.
16 
All government entities covered by this Act shall also adopt a comprehensive
17 
incentive framework for selected financial transactions to encourage the use of digital
18 
payments. LGUs shall likewise grant relevant incentives for merchants providing
19 
efficient digital payment systems.
20 
To enable the general public to adopt digital payments, micro-payment
21 
transactions shall be subject to graduated pricing or be rendered free of any service
22 
charge as determined by the BSP in consultation with the merchants and the payment
23 
services industry, as may be represented by the BSP-accredited payment system
24 
management body.
25 
The DICT shall implement measures to further enhance the availability,
26 
accessibility, reliability, and cost-efficiency of internet services to support the
27 
Government's program on the digitalization of financial transactions.
28
29 
SEC. 11. Multi-Year Roadmap for Digital Payment Adoption. - The BSP, in
30 
collaboration with relevant government entities, shall prepare and regularly update a


1 
multi-year roadmap on digital payments to ensure the timely implementation and
2 
optimal realization of the objectives of this Act.
3 
Subject to annual review, this multi-year roadmap shall be aligned with the e-
4 
government masterplan formulated by the DICT in consultation with other key
5 
government agencies, and shall, among others, set targets and outcomes, such as but
6 
not limited to the widespread adoption of digital payments by merchants, for a
7 
minimum period of five (5) years, and include strategic public and private Interventions
8 
and possible government programs and projects.
9
10 
SEC. 12. Transitory Provision. - Government entities shall be responsible for
11 
ensuring proper transition of their respective agency's disbursement and collection
12 
procedures and policies to digital payments.
13 
Digital disbursement shall be implemented within six (6) months from the
14 
issuance of the implementing rules and regulations (IRR) of this Act.
15 
For the Implementation of digital collections, a tiered transition period not
16 
exceeding three (3) years from the issuance of the IRR shall apply. The tiering
17 
guidelines, to be established by the TWG as part of the IRR, shall reflect differentiated
18 
transition timeframes based on the readiness and capability of the government
19 
entities. Government entities deemed capable and ready based on defined criteria
20 
shall be required to Implement digital collection within a shorter transition period while
21 
others may be allowed a longer transition period hut not to exceed three (3) years.
22
23 
SEC. 13. Information Security and Data Privacy. - All data information and
24 
information and communications technology systems and networks, used for digital
25 
payments pursuant to the objectives of this Act shall be secured and protected at all
26 
times. The DICT and the National Privacy Commission shall, in consultation with BSP,
27 
define and prescribe the minimum Information security standards for compliance of
28 
PSPs who are covered by this Act and are not under the oversight and regulatory
29 
authority of the BSP.


1 
SEC. 14. Obligations of Payment Systems Providers. - In line with the declared
2 
policy in this Act, all PSPs shall have the following obligations:
3 
a) Integrate security and data privacy by design and by default in the
4 
development sLage of the payment systems;
5 
b) Process personal and sensitive personal information in the system in
6 
accordance with any of the criteria for lawful processing provided for under
7 
relevant laws, rules and regulations;
8 
c) Implement reasonable and appropririte organizational, physical, and
9 
technical secuiity measures for the protection of personal data and uphold
10 
the rights of data subjects;
11 
d) Provide reasonable and timely assistance to NGAs, government
12 
corporations, LGUs, SUCs, LUCs, and/or merchants, in accordance with
13 
relevant rules and regulations, to enable them to respond to a request from
14 
clients to exercise any of their rights and any other correspondence, inquiry
15 
or complaint received from a client or other third party in connection with
16 
the processing of the personal data in the payment system;
17 
e) The PSP performing the function of collection of money and/or payment of
18 
transaction on behalf of the government agency shall, to the extent
19 
necessary, cooperate with the COA for the examination, audit, and
20 
settlement of all accounts pertaining to the revenue and receipts, and
21 
expenditures or uses of funds of all NGAs, government corporations, SUCs,
22 
LUCs, and LGUs. The PSP shall allow COA to perform its audit procedures
23 
and to determine whether collections are complete and use of funds are
24 
authorized; and
25 
f) Comply with the requirements indicated in the standard terms of reference
26 
or standard minimum terms and conditions that may be issued by the TWG.
27
28 
SEC. 15. Penalties and Sanctions. — Without prejudice to the penalties and
29 
sanctions provided in Republic Act No. 11127 or "The National Payment Systems Act"
30 
and other laws, whenever any person or entity' willfully 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 less
3 
than Two hundred thousand pesos (Php200,000.00) or more than Two million pesos
4 
(Php2,000,000.00) or by imprisonment of not less than (2) years nor more than ten
5 
(10) years, or both, at the discretion of the court.
6
7 
SEC. 16. Interpretation. - Nothing in this Act shall be construed to exempt any
8 
government funds in the possession of private entities from the constitutional
9 
authority and duty of the COA to examine, audit and settle ail accounts pertaining to
10 
the revenue and receipts of, and expenditures or uses of funds and property, owned
11 
or held in trust by, or pertaining to, the government. All digital payments involving
12 
government transactions under this Act shall be subject to post-audit of the COA.
13 
Accordingly, the COA shall promulgate the pertinent rules and regulations for all
14 
transactions covered by this Act.
15
16 
SEC. 17. Appropriations. — Government entities may be allowed to include in
17 
their respective budget amounts that will cover the reasonable costs of establishing
18 
and maintaining the infrastructure, system and/or processes adjustments as well as
19 
transaction fees that they may shoulder in connection with the implementation of
20 
digital payments, including but not limited to, merchant discount rate, processing fees,
21 
cash-out fees and administration fees: Provided, That the release of said budget may
22 
be conditioned on the actual adoption of digital payments by the concerned
23 
government entities.
24 
Government entities may also top-up cash assistance with a standard amount
25 
to cover any transaction fees that may be incurred by recipients or beneficiaries when
26 
claiming or withdrawing said cash assistance from their resoective transaction
27 
accounts.
28 
The amount necessary for the implementation of the provisions of this Act shall
29 
be taken from the current year's budgets of the NGAs, government corporations,
30 
SUCs, LUCs, and LGUs. Thereafter, such sums as may be necessary for the continued
11


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18
implementation of the Act shall be incorporated in the annuai General Appropriations 
Act, corporate operating budget, or appropriation ordinance, as the case may be.
SEC. 18. Implementing Rules and Regulations. —The BSP, in coordination with 
the DBM, COA, DOF, BTr, BIR, DICT, DOST, DILG, DTI, and other relevant agencies, 
shall promulgate the rules and regulations implementing the provisions of this Act 
within ninety (90) days from its effectivity.
SEC. 19. 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.
SEC. 20. Repealing Clause. — All taws, presidential decrees, executive orders, 
rules and regulations contrary to or inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly.
SEC. 21. Effectivity. — This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of national circulation.
Approved,
12