Republic of the Pliilippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRHSS
Second Regular Session
HouseBE]]No.8614
Introduced by Representative Midy N. Cua
Lone District, Quirino
AN ACT
ENABLING BANKS TO I]XPAND SERVICE DELIVERY CHANNHLS THROUGH CASH
AGENTS AND PROVIDING GUIDELINES THEREFOR
EXPLANATORY NOTE
Financial inclusion is a situation in which all people have adequate access to a wide range of
financial  products  and  services:  savings,  credit,  payments,  insurance,  remittances, and  investments.
Financial inclusion has the potential to reduce poverty rates and income inequality, paving the way for
developmentL.
Many Filipinos prefer to save cash in their own homes as banks are perceived as trustworthy
but inaccessible2. Despite overall development in financial inclusion, only 29% of Filipino adults have
formal financial accounts3. Additionally, a significant number of municipalities in the country do not
have baliks  in their areasO  prompting residents  to travel to other areas to  access banks.  The  lack of
accessibility to banks serves as a challenge to financial inclusion. Although bayad centers, pawnshops,
and  ATMs  may  be  more  accessible  than  banks,  informal  methods  are  also  more  accessible  and
available to Filipinos in rural areas. Such informal solutions pose different risks to Filipinos and are
difficult to  regulate.  This  points towards the  inportance  of promoting  access to  and  utilization  of
formal financial services.
In  recognition  of the  vital  role  of banks  in  providing  an  environment  conducive  to  the
sustained development of the national economy and in consideration of the current state of fmancial
inclusion in the country, the "Bangko sa Baryo" Act is proposed to extend banking services th.rough
cash agents (convenience stores, pharmacies, and other highly accessible retail outlets). The bill  shall
ensure that agents, serving as extensions of the banking system can provide adequate financial service
to  Filipinos.  The  establishment  of businesses  in  remote  areas  of the  country  shall  be  incentivized
through free training of persomel;  expedited  processing of permits  and  certificates;  and  expedited
processing of local government permits.
Omar, Abdullah, and Kazuo lnaba. 2020. "Does financial inclusion reduce poverty and income inequality in
93svhe=EBNCo°`"h;=ref:PanAdpK&K=re\Td=.#oa:y\:.\£:oJm°ucra£#:oif%i::;#asgte#me:Sn9t:?n°.t%:#%:`g;res.win.win for
F#rerprl.ses &  W/ome# Emp/o};ees. Geneva: International Labour Organization.
Agence Frangalse De Developpement. 2021. "Improving financial inclusion: a priority in the Philippines`"
Agence F rancai se de D€vel oppement. https ://www. afd. fr/en/actual ites/i mprovi ng-fmanci al -incl usi on-pri or ity-
philippines.


Ill view of the foregoing, approval of this measure is earnestly sought.
District, Quirino
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Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
Second Regular Session
HouseBillNo.8814
Intrnduced by Representative Midy N. Cua
Lone District, Quirino
JEN ACT
ENABLING BANKs TO ExpAND SERVICE DELlvERy cHANNELs TlmouGH CASH
AGENTS ANT) PROVIDING GUIDELINES THEREFOR
Be it enacted by the Senate and House Of Representatives Of the Philippines in Congress assembled:
1       SECTION 1. Short rz.f/e. -This Act shall be known as the "Bagrto sc} Baryo 4c.f'.
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3        SEC.  2.  Dcc/czrofz.o#  a/ Po/z.ey  ~  The  State  reeognizes  the  vital  role  Of  banks  in  providing  an
4       environment conducive to the sustained 6 development of the national economy. Towards this end, the
5        State shall create an enabling regulatory environment for innovations and allow banks to exponentially
6       expand reach through cash agents and serve a wider client base, particularly in the low-income and
7       rural areas.
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9       SEC. 3. De¢#z.fz.o# a/rer"s. -As used in this Act:
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(a)  Cash Agent refers to any person with a retail outlet such as but not limited to convenience
stores,  pharmacies  and  other  highly  accessible retail  outlets  that  deliver  bank  services
provided in Section 7 of this Act;
(b)  Contracting  Bank  refers  to  any  bank  requesting  authority  from the  Bangko  Sentral  ng
Filipinas asp) to expand service delivery channels through cash agents;
(c)  Remote  area  refers  to  an  area  that  either  is  a  long  distance  from  highly  populated
settlements  or  lacks transportation  links  that are typical  in  more populated areas  duly-
identified by the concerned Local Government Unit (LGU) in coordination with the BSP;
(d)  Person refers to a natural or juridical person.  The Monctary Board may,  by regulation,
further define or clarify terms used in this Act consistent with the declared State policies
above
The  Monetary  Board  may,  by  regulation,  further  define  or  clarify  terms  used  in  this  Act
27       consistent with the declared state policies above.
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29       SHC.  4. E/I-gz.bj./rty Jteg#z-reme#ts/or Casfe ,4ge#ts.  -A  Cash Agent  may file an application with a
30       Contracting Bank provided that the following requirements are met:
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(a)   Tt is a duly-registered business  in the Philippines;
(b)  It has engaged in commercial activity for at least ttrec (3) months;
(c)   It  has  conducted  its  commel.cial  activities  continuously  in  a  place  and  area  that  is
k]iown  to  the  public,   and  possesses  sufficient  capacity  to  properly  operate  electronic
devices; and
(d)  It has the necessary infrastructure to undertake banking operations.
SEC. 5. Prc/z.mz./tory Scrce#z.#g.  - Upon submission of the eligibility requirements  for a Cash Agent,
the Contracting Bank shall conduct a preliminary screening of the documents ensuring that:
(a)  The result of the preliminary screening shall be released within five (5) working days;
(b)  In case a Cash Agent fails the preliminary screening, the Contracting Bank shall return the
documents and notify the Cash Agent of the grounds for failure. The Cash Agent may re-
submit the documentary requirements within thirty (30) days from denial; and
(c)  In case a Cash Agent passes the preliminary sci.eening, the Contracting Bank shall forward
the application to the ESP:
Provided,  That, the Contracting Bank shall have an electronic banking solution to implement
its   cash   agent   operations   and   comply   with  the   requirements   of  Part   Seven   of  the   Manual   of
Regulations  for  Banks  (MORB),  on  the  Guidelines  on  Electronic  Banking  Services  and  Operations.
The  bank  shall  deploy  to  its  cash  agents  a  device  through  which  its  customers  can  perform  secure
online, real-time deposit and withdrawal transactions  on their own bank account,  fund transfers, bills
payment,   and   self-service   transactions:   Provided,   further,   That   the   Board   of  Directors   of  the
Contracting  Bank  shall  adopt  clearly-defined  written  policies,  procedures,  and  controls  for  its  Cash
Agent  operations,   including  Cash  Agent  selection,  exercise  of  due  diligence,  and  customer  care
an.angements.
SEC.  6.  Ev#/®f#/I.o#  ProceLfs,  - The  BSP  shall  create  an  online  evaluation  process  for a  Cash Agent:
application while ensuring that:
(a)  Cash  Agent  demonstrates  good  reputation  and  credit history,  has  no  previous  civil  and
criminal  record,  and  has  a  deposit  account with  the  Contracting  Bank  against  which  all
bank transactions will be condiicted;
(b)  The  result  of the  application  shall  be  1.eleased  within  seven  (7)  working  days  upon  the
application by the Contracting Bank;
(c)  In  case  an  application  shall  be  rejected,  the  applicant  shall  be  given  registered,  written
notification that indicates and explains the ground/s for rejection;
(d)  In case an application shall be approved, BSP shall issue an Authority to Utilize As Cash
Agent  to  Contracting  Bank  valid  for  two  (2)  years,  The  Authority  to  Utilize  As  Cash
Agent shall be displayed conspicuously in the Cash Agent's retail outlet.
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SHC. 7. jtei;oc4/fz.o#  a/.,4#//zorz.zofz.o#.  -The BSP shall revoke the Authority to Utilize As Cash Agent
if`aCashAgentnolongermeetsthestandardssettoqualifyfortherequirementsundei.thisAct.\
SEC.  8. B¢„fr fro;cL7clc.fl.o;75 ¢7cd Se7v!.CCS.  ~ A duly-authorized Cash Agent may perform any or all of
the following bank transactions/services:
(a)  Accept  aiid  disburse  cash  on  the  bank's  behalf in  connection  with  the  following  self-
service transactions of customers:
i. Deposit  and  withdrawal  transactions  performed  by  the  customer  on  one's  bank
account;
ii.Fund transfers performed by the customer;
ill.           Bills payment; and
iv.           Payments  due to  government institutions,  such as  contributions to the  Social
Security   System   and   premiums   payable   to    the   Philippine   Health   Insurance
Corporation, PAG-IBIG and others;
(b)  Collect and forward applications for opening a savings account;
(c)  Forward loan application documents to Contracting Bank;
(d)  Perform Initial Customer Identity Verification:
i.      Conduct    customer    due    diligence    (CDD)    investigations    in    opening    low
transactional    aiid    low    risk    accounts    or   accoimts    subject   to    deposit    and
transactional limits;
ii.    Prevent anti-money laundering and countering fmancing of terrorism activities;
(e)   Other transactions:
i.     Payment  (iiicluding  loan  repayments)  using  credit  and  debit  cards,  checks,  and
cash;
ii.    Transfers between bank accounts including those to be remitted to other banks;
iii.   Balance inquiries; and
iv.   Check encashment.
SEC.  9. J#veL`Tf77!e#f J#cc#fj.veg.  - A  Cash  Agent  that  establishes  operations  in  a  remote  area  shall be
entitled to the following incentives:
(a)  Free training of cash Agent personnel on various bank processes conducted by the BSI
(b)  Expedited processing of permits and certificates that are requisites to business registration
and operation; and
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(c)  Expedited processing of local government permits and other related documents.
The   Department  of  Trade   and  Industry  (DTI)   shall   require  the   SecLirities   and  Exchange
Commission (SEC) and the local goverrmerit unit (LGU) involved to create mechanism for expedited
processing from application to approval.
SEC.10.  jzo/e  o/£GU£.  ~  The  concerned  LGU  shall  encourage  and  provide  incentives  to  a  Cash
Agent in relation to the purpose  of this Act pursuant to Republic  Act No.  7160,  otherwise known as
the Local Government Code of 1991.
The concerned LGU shall conduct ti.ainjng programs in the barangay on financial literacy and
capacity-building to increase understanding of different financial services and products.
SEC.11.  S#bco#frczcfi.;zg ,4ge#ts.  -   A  Cash  Agent  cannot  subcontract  its  operations  or business  to
third parties.
SEC. 12. j4ge#J i?xcJwsJ.vJ.fy. -BSP may permit temporary agent exclusivity for a period not exceeding
two (2) years. Otheiwise, the Cash Agent shall enter into an agreement with another Contracting Bank.
SEC.  13. FeeLs'.  -A Cash Agent may set customer fees and charge customers directly: Provided, That
the Contracting Bank and the Department of Trade and Industry shall monitor such pricing for signs of
exploitation or customer confusion.
SEC.  14. Prz.77c/¢¢/ £z.¢bz.//.ty/or ,4ge#fLs.  -The Contracting Bank is liable for au actions and omissions
of the Cash Agent, provided such act is within the bounds of the agency.
The Contracting Bank shall exercise due diligence to ensure  its  Cash Agents  comply with applicable
rules,  regulations,  and  policies  on  anti-money  laundering,  consumer  protection,  bank  secrecy  and
customer data confidentiality.
SEC.  15.  J#tp/e#?e#/j.7?g  jiwJes  o7tcJ  J3eg%/¢fj.oJ!s'.  -  The  BSP,  in  coordination  with  the  Anti-Money
Laundering Council,  Insurance Commission,  a representative fi.om the Union of Local Authorities of
the Philippines and the DTI shall promulgate, not later than thirty (30) days upon the effectivity of this
Act, the necessary rules and regulations for its effective implementation.
SEC.  16. Scp¢;.¢bz./z.fy  C/¢wsc.   ~ If any section or part of this Act is held unconstitutional or invalid,
the other sections or pi.ovisions not otherwise affected shall remain in full force and effect.
SEC.  17. jiapccJ/j.#g C/¢wfe.  -All laws, decrees,  executive orders, rules and regulations,  issuances or
any part thereof inconsistent with the provisions of this Act, are hereby repealed, amended or modified
accordingly.
SEC.18. Ej#jpGc/jw.ty.  -This Act shall take effect flfteen (15) days after its publication in the Official
Gazette or in a newspaper of general circulatioii.
Approved,
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