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Republic of the Philippines EI LATE: MAY 1 1 2 q
HOUSE OF REPRESENTATIVES a
Quezon City te TIME:_4:9t9m,
EIGHTEENTH CONGRESS :

First Regular Session

House BILL No, __ 6716

Introduced by Representative Ferdinand L. Hernandez

AN ACT PROMOTING THE ADOPTION OF ELECTRONIC MONEY AS A
MEDIUMOF EXCHANGE FOR FINANCIAL TRANSACTIONS OF THE
GOVERNMENT AND ALL MERCHANTS AND FOR OTHER PURPOSES

EXPLANATORY NOTE

In 2018, the Bangko Sentral ng Pilipinas (BSP) reported that cash still accounted for
99% of local transactions". From January to September 2019, digital payments surged by 33
percent.* While still far from the target of 20 percent electronic payments by 2020, the
significant increase in volume of electronic money transactions holds promise. One of the
perceived hindrances, however, is the shortage of facilities and resources that can
acknowledge cashless payments.

As part of our move to transition into the “new normal” in the midst of the current
global pandemic, electronic payments of essential goods and services is a crucial element in
flattening the COVID-19 curve since handling of cash itself is a potential transmitter of the
Virus. Furthermore, electronic money transactions will no longer require the ordinary
Filipino, specially the elderly who are classified as high-risk, to leave the safety of their
homes to buy goods, pay utility bills, remit money, or address other household needs, which
may all be done online.

Similarly, the Philippine government may use electronic payment channels to
transfer cash subsidies to the targeted beneficiaries of its social amelioration program,
minimizing mass gatherings and long lines at disbursement centers.

accessed on 04 May 2020.

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This bill seeks to provide an enabling environment to accelerate the adoption of
electronic money as one of the medium of exchanges across the country. Switching
to digital and cashless payments helps in flattening the COVID-19 curve, as well
as, brings convenience, ensures transparency and safety, saves time, and offers speedy
value transfers. The use of electronic money also affords more efficient service delivery
and at the same time entails lower operating costs. It likewise increases financial
inclusion to support broad-based economic development that can contribute to inclusive
growth in the country.

In view of the foregoing, the passage of this bill is earnestly sought.



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No.__6716

Introduced by Representative Ferdinand L. Hernandez

AN ACT
PROMOTING THE ADOPTION OF ELECTRONIC MONEY AS A
MEDIUM OF EXCHANGE 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:

SECTION 1. Short Title. This Act shall be known and cited as the “Us of
Electronic Money Act of 2020.”

SEC. 2. Declaration of Policy - The State recognizes the vital role of
information and communications technology in nation-building. The State also
Fecognizes the need of promoting ease of doing business and efficient delivery of
Boods and services to the general public. Towards this end, the State shall promote
the use of electronic money or e-money as a medium of exchange to optimize the
use of technology and innovative payment system for financial transactions and to
strengthen financial inclusion.

SEC. 3. Objective. ~ This Act aims to facilitate transactions, arrangements,
or exchanges or goods and services by promoting the universal use of e-money as
a medium of exchange in financial transactions of the government and the general
public.

SEC. 4. Definition of Terms. — As used in this Act, the following terms sha
mean:

(a) “Access device” refers to any card, plate, code, account number,
electronic serial number, personal identification number, or _other
telecommunications service, equipment or instrumental identifier, or other means
of account access that can be used to obtain money, goods, services, or any other


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thing of value or to initiate a transfer of funds (other than a transfer originated
solely by paper instrument);

(b) “Electronic money” or “e-money” shall refer to monetary value as
represented by a claim on its issuer, that is (1) electronically stored in an
instrument or devise; (2) issued against receipt of funds of an amount not lesser in
value than the monetary value issued; (3) accepted as a means of payment by
Persons or entities other than the issuer; (4) withdrawable in case or cash
equivalent; and (5) issued in accordance with relevant Bangko Sentral ng Pilipinas
(BSP) regulations;

(6) “Electronic money issuer” or “EMI” refers to any entity authorized by the
BSP under Subsection X780.2 of MORB which provides money transfer or
remittance services using electronic stored money value system and similar digital
financial services;

(a) “Merchant” refers to a person or entity engaged in buying and selling
merchandise at a fixed place of business; and

(€) “Payment system” refers to the set of payment instruments, processes,
Procedures and participants that ensures the circulation of money or movement of
funds.

SEC. 4. Use of E-Money. ~ All national government agencies (NGAs),
Bovernment-owned and controlled corporations (GOCCs), and local government
units (LGUs) are hereby mandated to utilize emoney among the medium of
exchanges in the collection of taxes, fees, tolls, imposts and other revenues and in
the payment of goods, services and other disbursements. For this purpose, they
are hereby authorized to partner with any duly authorized e-money issuer (EMI) to
enable them to process e-money transactions.

To ensure seamless and continued service of the e-money payment
system, NGAs, GOCCs, and LGUs may create their respective e-money technical
support and maintenance service. The support service shall be responsible for
troubleshooting and in maintaining coordination with the EMI partner for technical
and other concerns within the agency. The creation of the technical support and
maintenance service shall be without prejudice to any technical support
arrangement between the agency and the EMI partner pursuant to a contract or
agreement.

The selection of an EMI partner shall not be subject to the rules of
Procurement prescribed under Republic Act No. 9184: Provided, That only EMIs
duly authorized by the BSP and accredited by the Department of Budget and
Management (DBM), Department of Information and Communications Technology
(PICT) and Department of the Interior and Local Government (DILG) may be
engaged by agencies to service their e-money transactions.


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The DBM, DICT, and DILG shall jointly accredit EMIs based on technical
capability, financial resources, network coverage, adequacy of merchant partners,
and such other factors as they may deem appropriate and decisive in determining
the overall capability of EMIs to provide the service. Recognizing that the
adequacy, sufficiency, and quality of information technology infrastructure vary in
different localities, the accreditation of EMIs may be grouped by region or such
other geographical consideration as the DBM, DICT, and DILG consider
appropriate and convenient. The DBM, DICT, and DILG shall promulgate the list of
accredited EMIs simultaneous with the promulgation of the rules and regulations
implementing the provisions of this Act. The list of accredited EMIs may be
revised, supplemented, or reduced as the DBM, DICT, and DILG deem necessary.

SEC. 5. E-Money Capability of Merchants. - To accelerate the adoption of
e-money as a medium of exchange, LGUs shall, by ordinance, require merchants
within their localities to obtain and maintain e-money payment system capability in
carrying on their businesses as a pre-requisite for the approval or renewal of their
business permits. No new or renewal of business permit shall be approved unless
the merchant concerned show to the satisfaction of the LGU that a functional e-
money payment system accessible by mobile phone or other access devices is
installed or provided by a duly registered EMI in the merchant partner's place of
business.

The LGUs shall extend assistance to the merchants to facilitate their
adoption of e-money transaction capability.

SEC. 6. Promotion of E-Money Transactions. ~ Utilizing e-money in
financial transactions provides clients with convenient, transparent, _safe,
expeditious, and efficient mode of transacting business. To optimize the benefits of
this technological innovation, scale. up financial inclusion, and __ promote
sustainability, NGAs, GOCCs, and LGUs shall prioritize the use of e-money as the
medium of exchange in their financial transactions.

NGAs, GOCCs, and LGUs shall also explore the feasibility of prescribing
discounted rates for selected financial transactions to encourage the availment of
money payments. LGUs may, likewise, impose reduced fees or grant other
incentives for merchants providing efficient e-money payment system.

SEC. 7. Appropriation. ~ The amount necessary for the implementation of
the provisions of this Act shall be taken from the current year’s budgets of the
NGAs, GOCCs, and LGUs. Thereafter, such sums as may be necessary for the
continued implementation of the Act shall be incorporated in the annual General
Appropriations Act, corporate operating budget, or appropriation ordinance, as the
case may be.


SEC. 8. Implementing Rules and Regulations. - The DBM, DICT, and DILG
shall promulgate the rules and regulations implementing the provisions of this Act
within ninety (90) days from its effectivity.

SEC. 9. Separability Clause. —If for any reason, any part or provision of this
Act is declared invalid or unconstitutional, the remaining parts or provisions not
affected shall remain in full force and effect.

SEC. 10. Repealing Clause. - All laws, presidential decrees, executive
orders, rules and regulations contrary to or inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.

SEC. 11. Effectivity This Act shall take effect fifteen (15) days after its
Publication in the Official Gazette or in anewspaper of national circulation.

Approved.