Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
NINETHENTH CONGRESS
First Regular Session
HousEL|L£No.5073
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Introduced by Representative Ivan Howard A. Guintu
EXPLANATORY NOTE
The COVID-19 pandemic and its ensuing quarantine arrangements has led to two key
market effects. First is increase in online transactions where people started gaining confidence
in purchasing without having to go physically to the stores. Second is the increase in digital
payment transactions.
As concerns in the spread of the COVID-19 grew, many of our countrymen turned to
digital payments as a means to send value without fomite-mediated virus transmission using
paper cash and coins.
According to the 2021  Visa Consumer Payments Attitudes  Study,  60 percent of the
1,000 respondents from Manila, Cebu. Cavite, Rizal, and Bulacan, carried less cash in their
wallets  and  84  percent tried  going  cashless.  Respondents  prefer  using  mobile  wallets,  64
percent; card payment online, 52 percent; card payment at physical merchants, 44 percent; and
quick response (QR) payments, 31 percent.1
According  Visa Country Manager for the  Philippines  and  Guam  Dan  Wolbert  said
importance of cashless transactions and digital payments was appreciated during the pandemic,
following the movement restrictions imposed to address the spread of coronavirus disease 2019
(Covid-19). "While cash is still commonplace in the Philippines, the preference for cashless
payments is clearly gaining momentum. Our study showed more Filipinos are confident to get
by without cash and for longer periods of time --with more than half feeling confident to get
by for a week or longer, as cashless payment options grow," he added.2
i Villanueva, Joan. Philippine News Agency. 29 March 2022. Dz.gzta/papJme7t/s growf# see# fo rcJ#az.# robwsf
pos/-pa#c7e7#z.c.  Retrieved from: https://www.pna.gov.ph/articles/1170948
2 Ibid


Patuloy po ang paglaki ng tiwala ng marami mating kababayan sa tinatawag na digital
payments gaya po ng credit cards at e-wallet.  Sa katunayan po, may mga LGU po tayo na
nakapagbibigay ng ayuda gamit ang e-wallet. Bagama't pangunahin pa rim ang pag-gamit ng
pananalapi,  marapat  na po  natin  tanggapin  na magiging permanenteng bahagi  po  ng ating
komersyo ang digital payments.
This bill mandates government offices to adopt digital transaction  systems to allow
them to pay and receive digital currency. It likewise mandates various government agencies to
work together to promote digital payment transactions.
In doing so, we hope that we will help in stimulating our economy by facilitating faster
and more secure transactions using online platforms.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
First Regular Session
HoUSE B`ILf No.  5073
Introduced by Representative Ivan Howard A. Guintu
ANACT
PROMOTING THE ADOPTION 0F DIGITAL PAYMHNTS FOR FINANCIAL
TRANSACTIONS 0F THE GOVERNMHNT 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. S#orf r!.*le -This Act shall be known as the "Use of Digital Payments
Act."
SEC. 2. DecJ¢r¢#.o# a/Po/j.ey. -The State recognizes the vital role of information and
communications technology particularly technology, towards fmancial inclusion advancement
and nation-building. The State also recognizes the need of promoting ease of doing business
and efficient delivery of goods and services to the general public. Towards this end, the State
shall promote financial inclusion through the use of safe, secure, and efficient digital payments.
In  various  transactions  of the  government  and  the  public  -  particularly  for  payments  to
government, and government disbursements to the public, which includes but is not limited to
payments to or by private institutions, merchants, and beneficiaries, the State shall optimize
the use of financial technologies and irmovative payment systems for financial transactions and
to  strengthen  financial  inclusion.  In  so  doing,  the  State  shall  encourage  and  facilitate  the
adoption of digital payments  in a technology-neutral manner,  where one technology  is not
unreasonably favored or given undue advantage over another.
SEC.  3.  0£ject.vet  -  This  Act  aims  to  facilitate  transactions,  arrangements,  or
exchanges  of goods  and  services  by  promoting  the  universal  use  of safe,  affordable  and
efficient digital payments in financial transactions of the government and the general public.
SEC. 4. De/«z.fro7f a/Te7.ms. -As used in this Act, the following terms shall mean:
i.           Access czevz.ce refers to any card, plate, code, account number, electronic serial


number, personal  identification number,  mobile  device,  or other information
and communications technology service, equipment or Instrumental Identifier,
or other means  of account access that can be used to  obtain money,  goods,
services, or any other thing of value, or to initiate a transfer of funds in electronic
form;
4ccow77f-bczsed  dz.sb#rse"e72f  refers  to  the  disbursement  of  funds  such  as
salaries, wages, allowances, and social benefits, among others, directly into the
transaction account of the  intended recipient held  in any Bangko  Sentral ng
Pilipinas  (BSP)-supervised  entity  as  chosen  and  specified  by  the  intended
recipient;
iii.        Bczsi.c cJeposz'r czcco"#f ¢D4/ refers to the deposit product offered by banks as
defined under the ESP Manual of Regulations for Banks and its implementing
guidelines;
1v.         Dz.gz./cz/ co//ecfz.o7! refers to a mode of payment wherein businesses and citizens
make payments to the government, including but not limited to, taxes, fees, and
tolls, using a digital device such as mobile phone, point of 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;
v.          D!.gz.Jcz/ c7z.sbcfrseme#f refers  to  a mode  of payment whereby  disbursement of
money or equivalent electronic representations of legal tender, for puxposes of
paying  government expenditures,  is  made by crediting the  target recipient's
transactions   account  through  advice   to   debit  or   electronic   fund  transfer
facilitated   by   any   government   agency   or   instrunentality   through   their
respective servicing bank;
vi.         Dj.gz.fcr/ Pap;7"e72ts 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;
vii.       E/ec/ro#z.c/##d /rczus/er 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
p ayment instructions ;
viii.      E/ecfro#g.c  mo#e};  /e-7„o#eyJ  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;
ix.         Fz'#o#cj.cz/ ].77c/cisz.o# refers to the state wherein there is effective access to a wide
range of financial products and services for all Filipinos;


X.
Government Servicing Payment Service Provider asp) re;furs to bandf a;nd "on-
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;
xi.         J#/orm¢fz.o# sec#rrty sfcz#dclrds  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;
xii.        A4ercfecz;€f   refers   to   a   person   or   entity   engaged   in   buying   and   selling
merchandise, purchasing of services, skills or expertise, and leasing of goods
and services;
xiii.      114lz.cro-pcz);"e#/ /rcI#sczcfz.our  refers  to  low-value payments  including  but  not
limited to payments to sari-sari store owners, wet market vendors, as well as
tricycle and jeepney drivers, the actual thresholds of which shall be determined
by the BSP, pursuant to the objectives of this Act;
xiv.      Pcz)/"e#f servz.ce provz.der /PSPJ  refers to an entity, such as bank or non-bank
electronic money issuer, that provides payment services to end-users, such as
consumers, merchants, and billers, including government institutions;
xv.       Pcz);"e#f sys/e" refers to the set of payment instruments, processes, procedures
and participants that ensures the circulation of money or movement of funds,
which comply with the requirements set forth under Republic Act No. I 1 127 or
the National Payment System Act;
xvi.       rrc!#sczc/I.o# 4ccow#/ refers to an account, such as but not limited to a BDA, or
e-money account held with a BSP-supervised financial institution that can be
used to store, send, and receive funds.
SrfLC.  5.  Adoption  Of  Digital  Payments  fior  Government  Disbursements.  -  A;Il
government  entities,  including  but  not  limited  to  national  government  agencies  (NGAs),
foreign-based  government  agencies,  all  government  corporations,  local  government  units
(LGUs), State Universities and Colleges (SUCs), and local universities and colleges (LUCs),
are hereby mandated to utilize safe, and efficient digital disbursement in the payment of goods,
services, and other disbursements including but not linited to cash assistance and payments of
salaries, wages, allowances, and honoraria of its employees, whatever nature of appointment.
Government  entities  shall  be  allowed  to  disburse  funds  directly  into  the  recipient's  or
beneficiary's transaction account held in government or private financial institutions without
the need for special arrangement with each of these financial institutions. For this purpose, said


government entities may use the automatic debit arrangement interoperable electronic  fund
transfer or any other appropriate facility of its government servicing PSP.
Accountable officers of the government entities shall observe due diligence in ensuring
the accuracy of the recipient's or beneficiary's identity. Uses of government funds through
direct crediting shall remain transparent to state auditors.
Government entities shall be responsible for preparing the payment instruction with the
necessary details, including the recipient's or beneficiary's name, transaction account details,
and  amount,  among  others,  only  after proper authorization  in  accordance  with established
accounting and auditing rules and regulations.
The government servicing PSP shall carry out the payment instruction and submit the
verified list of successful and failed fund transfers and other relevant details to the goverrment
entity  disbursing  the  fund.   Subject  to  the  agreement  with  the  government  entity,  the
government servicing PSP may collect fees from the government entity for the electronic fund
transfer services.
In case of unsuccessful digital disbursement, there shall be a recovery mechanism that
will ensure the continuity of delivery of payment services: P7.ow.dec7, That in cases of calamities
or  other  emergencies,  where payments  through  digital  means may  be  affected,  non-digital
payout charmels may be explores.
S;E,C. 6. Adoption Of Digital Payments f or Government Collections. -A:Il govem"erfu
entities,  including  but not  limited to national  government agencies  (NGAs),  foreign-based
government  agencies,  all  government  corporations,  local  government  units  (LGUs),  State
Universities  and  Colleges  (SUCs),  and  local  universities  and  colleges  (LUCs),  shall  offer
digital collection as a mode, in addition to acceptance of cash payment, for the collection of
taxes, fees, tolls, imposts and other revenues, including non-income collections and receipts.
Government  entities  shall  utilize  secure  payment  processing  solutions  to  ensure
acceptance of various digital payment methods. For this purpose, said government entities may
engage the services of established PSPs: Prov!.dec7, That government entities shall avail only
of interoperable digital payment solutions. Notwithstanding any law to the contrary, partner
PSP of a government entity shall not be limited to government servicing banks.
SE:C.1. Adoption  Of Interoperable  Digital  Payment  Solutions.  -The BSP  stroll
implement initiatives that aim to accelerate the adoption by all PSPs of interoperable digital
payment technologies and appropriate standards thereof, such as but not limited to the National
Quick  Response  (QR)  Code  Standard  meant  to  hasten  the  interoperability  of QR-driven
payment services and eliminate the need for merchants and clients to maintain several accounts.
In  addition,  NGAs,  government  corporations,  SUCs,  LGUs,  and  merchants  shall
undertake measures to promote the adoption of the Open Finance Framework in accordance


with the guidelines set forth under the applicable BSP rules and regulations which will enable
sharing  of customer-permissioned  financial  data  and  foster adherence  to  data  security  and
privacy standards.
The digital payment solutions adopted by government entities shall allow for real-time
receipt of funds by the recipient government entity, immediate issuance of electronic invoices
and/or official receipts to payors, regular audit reports, and other technical features that will
aid in the fulfillment of the objectives of this Act. To ensure that these digital payment solutions
adhere  to  applicable  international  standards  on  information  security,  data  privacy,  and
electronic data interchange between financial institutions, among others, government entities
shall  avail  of digital  payment  solutions  under the  BSP's National  Retail  Payment  System
Framework.
Existing agreements between government entities and PSPs shall be honored until the
respective terms thereof expire: P7tovz.c7ed, That parties concerned shall endeavor, within one
year  from the  effectivity  of this Act,  to  implement  amendments to  such  agreements  with
intention to remove provisions detrimental to public interest. In all instances, collection and
payment schemes that prevent transparency and accountability over public funds, as well as
arrangements disadvantageous to the government, shall be discontinued.
There  shall be  a technical working group  (TWG)  composed of the Commission on
Audit (COA), Department of Budget and Management (DBM), Department of Finance (DOF),
Bureau of the Treasury (BTr), Bureau of Internal Revenue (BIR), the Government Procurement
Policy  Board,  and  other  relevant  agencies  that  will  provide  guidance  and  promote  cost-
efficiency  and  transparency  in  procurement  of digital  payment  solutions  by  government
entities. Consistent with the respective mandates of the member-agencies, and in coordination
with the COA, the TWG shall have the following powers and functions:
a)   Oversee and monitor the procurement of digital payment solutions by government
entities and ensure that the  same  is  in accordance with existing laws,  rules and
regulations;
b)   Consider the formulation of standard terms and condition for PSPs, in consultation
with the BSP and COA. Pursuant to its mandate, the GPPB may also issue specific
procurement guidelines for the engagement of psps;
c)   Resolve issues relative to the implementation of this Act, without prejudice to the
individual member-agencies resolving such concerns pursuant to their respective
mandates;
d)   Call  on  any  department,  agency  or  office  under  the  Executive  Branch  for  the
effective implementation of this Act; and
e)   Perform such other function pursuant to the fulfillment of the objectives of this Act.


SE;C.  8.  Establishment  Of  a  Government  Payment  Gateway.  -  The  ESP,  .in
consultation with the DOF, DBM,  COA, Department of Information and Communications
Technology (DICT), BIR, Bureau of Customs (BoC), Bureau of the Treasury (BTr), digital
banking   experts,   academe,   and   other   appropriate   public   sector  and  banking   industry
stakeholders, may cause the establishment of a government payment getaway through which
all government entities may process digital payments made to them through PSPs, websites,
mobile phone applications, or other access devices.
The government payment getaway shall allow for real-time settlement of accounts and
receipt of funds by the recipient government entity, immediate issuance of electronic invoices
and/or official receipts to payors,  regular audit reports,  interoperability between the  digital
payment  technologies,  and  other  technical  features  that  will  aid  in  the  fulfillment  of the
objectives  of this  Act.  Said  getaway  shall  adhere  to  relevant  international  standards  on
information   security,   data  privacy,   and   electronic   data   interchange   between   financial
institutions.
SEC.  9.  DJ.gr.fo/  C¢p¢bJ.Jrty  a/ A4lerch¢Hfs.  -  To  accelerate  the  adoption  of digital
payment,  LGUs  shall,  by  ordinance,  encourage  and  grant  monetary  and  non-monetary
incentives  to  merchants  within  their  localities  to  establish  and/or  outsource  arrangements
and/or  mechanisms  that  would  enable  them  to  receive  payments  from  clients  and  make
payments to creditors and suppliers using digital channels.
LGUs  shall  ensure  that merchants  in their jurisdictions  have  access  to  appropriate
digital payment solutions and have capacity to effectively use the same with due consideration
to small and micro-merchants, including, but not limited to, market vendors, tricycle operators
and food stalls. The LGU shall extend assistance to small and micro merchants to facilitate
their adoption of digital transaction capability. The BSP, Department of Trade and Industry
(DTI),   DILG,   and  DICT   shall  provide  capacity  building  for  the  NGAs,   government
corporations, SUCs, LGUs, and merchants on the use of digital payments.
SE:C. 10. Promotion Of Digital Payment Transactions. -To oprilwize the benefits of
digital payments,  scale  up  fmancial  institution,  and promote  sustainability,  all government
entities  shall  prioritize  the  use  of  safe  and  efficient  digital  payment  in  their  financial
transactions.
All government entities covered by this Act shall also adopt a comprehensive incentive
framework for selected financial transactions to encourage the use of digital payments. LGUs
shall,  likewise,  grant relevant incentives  for merchants providing  efficient digital payment
systems.
The  BSP,  in  coordination  with  relevant  stakeholders,  shall  promote  measures  on
financial and digital literacy, and consumer protection to strengthen the public's trust in digital
payment transactions.


To enable the general public to adopt digital payments, micro-payment transactions
shall be subject to graduated pricing or be rendered free of any service charge as determined
by the BSP in consultation with the merchants and the payment services industry, as may be
represented by the BSP-accredited payment system management body.
The DICT shall implement measures to further enhance the availability, accessibility,
reliability, and cost-efficiency of internet services to support the Govemment's program on the
digitalization of financial transactions.
SHC.  11.  Multi-Year  Roadmap  for  I)igital  Payment  Adoption.  -The  ESP,  .Tn
collaboration with relevant government entities, shall prepare and regularly update a multi-year
roadmap on digital payments to ensure the timely implementation and optimal realization of
the objectives of this Act.
The   Multi-year   Roadmap   shall   be   aligned   with   the   e-government   masteaplan
formulated by the DICT in consultation with other key government agencies, and shall, among
others, set targets and outcomes, such as but not limited to the widespread adoption of digital
payments by merchants, for a minimum period of five (5) years, and include strategic public
and private interventions and possible government programs and projects. The roadmap shall
be subject to annual review.
SEC. 12. rr¢#sltory Provr.sl.o#. -Government entities shall be responsible for ensuring
proper  transition  of their  respective  agency's  disbursement  and  collection  procedures  and
policies to digital payments.
Digital disbursement shall be implemented within six (6) months from the issuance of
the implementing rules and regulations (IRR) of this Act.
For the implementation of digital collections, a tiered transition period not exceeding
three (3) years from the issuance of the IRR shall apply. The tiering guidelines, to be established
by the TWG as part of the IRR, shall reflect differentiated transition time frames based on the
readiness and capability of the government entities. Government entities deemed capable and
ready based on defined criteria shall be required to implement digital collection within a shorter
transition period while others may be allowed a longer transition period but not to exceed three
(3) years.
SHC.   13.  J#/orm¢#.o#  Scc#r7.fy  ¢#d  D¢/o  I+!.roey.     All  data  information  and
information and communications technology systems and networks, used for digital payments
pursuant to the objectives of this Act shall be secured and protected at all times. The DICT and
the National Privacy Commission shall, in consultation with the ESP, defined and prescribe
the minimum information security standards or compliance of PSPs who are covered by this
Act and are not under the oversight and regulatory authority of the BSP.


SEC. 14. Ob/J.gr#.o#§ a/P¢jme"f fysfem ProvJ.ders. -In line with the declared policy
in this Act, all PSPs shall have the following obligations:
a)   Integrate security and data privacy by design and by default in the development
stage of the payment systems;
b)   Process personal and sensitive personal  information in the system in accordance
with any of the criteria for lawful processing provided for under the relevant laws,
rules and regulations;
c)   Implement  reasonable  and  appropriate  organizational,  physical  and  technical
security measures for the protection of personal data and uphold the richts of data
subjects;
d)   Provide  reasonable  and  timely  assistance  to  NGAs,  government  corporations,
LGUs, SUCs, and/or merchants, in accordance with relevant rules and regulations,
to enable them to respond to a request from clients to exercise any of their rights
and any other correspondence, inquiry or complaint received from a client or other
third party in connection with the processing of the personal data in the payment
system;
e)   The  PSP  performing  the  function  of collection  of money  and/or  payment  of
transaction  on  behalf of the  government  agency  shall,  to  the  extent  necessary,
cooperate with the COA for the examination, audit, and settlement of all accounts
pertaining to the revenue and receipts,  and expenditures  or uses  of funds of all
NGAs, government corporations, SUCs, and LGUs. The PSP shall allow COA to
perform its audit procedures and to determine whether collections are complete, and
use of funds are authorized;
I)   Comply  with  the  requirements  indicated  in  the  standard  terms  of reference  or
standard minimum terms and conditions that may be issued by the TWG.
SEC. 15. Pe#¢/#.es ¢#d So#cfr.o#s. -Without prejudice to the penalties and sanctions
provided in Republic Act No. I 1127 or "The National Payment Systems Act" and other laws,
whenever any person or entity willfully violates this Act, rule or regulation, directives or orders
duly  promulgated by the  BSP pursuant hereto,  the person or persons  responsible  for such
violation  shall  be  punished  by  a  fine  of  not  less  than  Two  hundred  thousand  pesos
(P200,000.00) or more than Two million pesos (P2,000,000.00) or by imprisonment of not less
than two (2) years nor more than ten (10) years, or both, at the discretion of the court.
SHC.  16. JH/erpre/o/I.o#.  - Nothing  in this  Act  shall  be  construed to  exempt  any
government funds in the possession of private entities from the constitutional authority and
duty of the COA to examine, audit, and settle all accounts pertaining to the revenue and receipts
of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to,


the government. All digital payments involving government transactions under this Act shall
be subject to post-audit of the COA. Accordingly, the COA shall promulgate the pertinent rules
and regulations for all transactions covered by this Act.
SEC.  17. 4proprJ.¢fro#s. - Government entities may be allowed to include in their
respective budget amounts that will cover the reasonable costs of establishing and maintaining
the infrastructure, system and/or processes adjustments as well as transaction fees that they
may shoulder in connection with the implementation of digital payments, including but not
limited  to,  merchant  discount rate,  processing  fees,  cash-out  fees  and  administration  fees:
Provj.decJ, That the release of said budget may be conditioned on the actual adoption of digital
payments by the concerned government entities.
Government entities may also top-up cash assistance with a standard amount to cover
any  transaction  fees that  may  be  incurred by  recipients  or beneficiaries  when  claiming  or
withdrawing said cash assistance from their respective transaction accounts.
The amount necessary for the  implementation of the provisions of this Act shall be
taken from the current year's budget of the NGAs, government corporations, SUCs 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. 18. J"p/eme##.#g Rw/cs ¢#d jRegziJ¢fro#s. - 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. Separ¢bi./Jty CJo#sc. - 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. Repe¢/z.#g C/¢wsc. - 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. 21. Ejorect.vrty. -This Act shall take effect fifteen (15) days after its publication
in the O;orcz.cz/ Gaze#e or in a newspaper of national circulation.
Approved,