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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
1st Regular Session 
House Bill No. ________ 
Introduced by Representatives PAOLO Z. DUTERTE, ERIC G. YAP, 
EDVIC G. YAP, and JEFFREY SORIANO 
EXPLANATORY NOTE 
The 1987 Constitution guarantees the promotion in the ease of doing business and 
efficient delivery of goods and services to the general public, which necessitates the 
development of safe and efficient modes of conveying payment for financial 
transactions. 
The onset of the COVID-19 pandemic results to the burgeoning resort to digital mode 
of payment—a wise alternative in exhibiting safety health protocols. In fact, the 
Bangko Sentral ng Pilipinas (BSP) has been heeding the institutionalization of digital 
payments pointing to the said surge in electronic transactions which accounts for 
20.1% of the total financial transactions in 2021.
In response to this call, this bill seeks to promote the universal use of safe and efficient 
digital payments in financial transactions of the government and the general public.  
By allowing the digital platform of payment as a pre-requisite for the approval or 
renewal of their business permits, merchants are now mandated to further digital 
transactions in their every operation. Meanwhile, the government is also duty-bound 
to utilize safe and efficient electronic or digital means of receiving payment for taxes, 
fees, tolls, imposts and other revenues and for the payment of goods, services and 
other disbursements. 
August 17, 2022
11:56 am
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Apart from the speedy and efficient transactions that would prosper, this proposed 
measure would also showcase the transparency of digital transactions due to an 
increase in effective monitoring, tracking, and securing that the innovation would 
ensue.  
 
In view of the foregoing, approval of this bill is earnestly sought. 
 
 
PAOLO Z. DUTERTE  
 
 
 
ERIC G. YAP 
 
 
 
 
        EDVIC G. YAP 
 
   
           JEFFREY SORIANO 
 
 
 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
1st Regular Session 
House Bill No. ________ 
Introduced by Representatives PAOLO Z. DUTERTE, ERIC G. YAP, 
EDVIC G. YAP, and JEFFREY SORIANO 
AN ACT 
PROMOTING THE USE OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. This Act shall be known as the "Promotion of Digital 
Payments Act." 
SEC. 2. Declaration of Policy. - The State recognizes the vital role of 
information and communications technology in 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, and for developing safe and efficient modes 
for conveying payment for financial transactions. Towards this end, the State shall 
promote financial inclusion, optimize the use of technology and innovative payment 
systems for financial transactions, and promote the electronic conveyance of payment 
for various transactions with the government, to and among business entities and 
merchants, and among the general public. 
SEC. 3. Objective. - This Act aims to 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. 
SEC. 4. Definition of Terms. - As used in this Act: 
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 thing
of value or to initiate a transfer of funds other than a transfer originated
solely by paper instrument;
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b. Digital Payments refer to monetary payment transactions between two (2) 
parties through a digital payment instrument in which both the payer and 
the payee use an electronic channel; 
c. Merchant refers to a person or entity engaged in buying and selling 
merchandise, purchasing goods and services, skills, or expertise, and 
leasing of goods and services. It also includes credit-granting entities, 
lending institutions, pawnshops, remittance companies and other money 
service business, except financial institutions supervised by the Bangko 
Sentral ng Pilipinas (BSP), which shall be governed by specific BS 
regulations and requirements on digital services; 
d. Payment system 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. 11127, otherwise known as "The National Payment 
System Act”; and 
e. Payment Service Provider (PSP) refers to an entity that provides payment 
services to end-users, such as consumers, merchants, and billers, including 
government institutions. 
 
SEC. 5. Use of Digital Payments. - All national government agencies (NGAs), 
government-owned and -controlled corporations (GOCCs), and local government 
units (LGUs) are hereby mandated to utilize safe and efficient electronic or digital 
means of receiving payment for taxes, fees, tolls, imposts and other revenues and for 
the payment of goods, services and other disbursements. To this end, government 
entities may be allowed to include in their respective budgets the amounts that will 
cover the cost of establishing and maintaining the infrastructure, system and process 
adjustments as well as transaction fees that they may shoulder in connection with the 
implementation of digital payments, including merchant discount rate, processing 
fees, cash out fees, administration fees: Provided, That the release of said budget may 
be conditioned on the actual adoption of digital payments by the concerned 
government entities. 
 
To facilitate compliance with this Act, NGAs, GOCCs, and LGUs must adopt 
account-based disbursements whereby target recipients directly receive government 
payments into their transaction accounts. These government entities may create their 
respective digital payment technical support and maintenance service units which 
shall be responsible for troubleshooting and in maintaining coordination with the PSP 
partner for technical and other concerns within the agency. They shall also be 
responsible for ensuring the proper transition of their respective agency's payments 
and disbursement procedures and policies on digital payments. The creation of the 
technical support and maintenance service units shall be without prejudice to any 
technical support arrangement between the agency and the PSP partner pursuant to a 
contract or agreement: Provided, That, the contract or agreement shall be subject to 
the applicable regulations of the BSP. 
 
The BSP shall accelerate the adoption by all PSPs of the national quick response 
(QR) code standard to hasten the interoperability of QR-driven payment services and 
eliminate the need for merchants and clients to maintain several accounts.  


 
 
 
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The Government Procurement Policy Board shall, in coordination with the BSP, 
issue guidelines to be observed when procuring the services of a PSP that provide 
digital payment: Provided, That, government entities shall avail only of interoperable 
digital payment solutions. 
 
 Notwithstanding any law to the contrary, a partner PSP of a government entity 
shall not be limited to government financial institutions. 
 
SEC. 6. Digital Payment Capability of Merchants. - To accelerate the adoption 
of digital payment, LGUs shall, by ordinance, require merchants within their localities 
to establish or outsource arrangements or mechanisms that would enable them to 
receive payments from clients and make payments to creditors and suppliers in digital 
form 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 shows 
to the satisfaction of the LGU that a functional digital payment system accessible by 
mobile phone or other access devices is installed or provided by a duly registered PSP 
in the merchant partner's place of business. 
 
The LGUs shall ensure that merchants in their jurisdictions have access to 
appropriate digital payment solutions and have the capacity to effectively use the 
same, with due consideration to small and micro-merchants, including 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), Department of the Interior and Local 
Government (DILG), and the Department of Information and Communications 
Technology (DICT) shall also facilitate measures to provide capacity building for the 
NGAs, GOCCs, LGUs, and merchants on the use of digital payments. 
 
SEC. 7. Promotion of Digital Payment Transactions. - To optimize the benefits 
of this technological innovation, scale up financial inclusion, and promote 
sustainability, NGAs, GOCCs, and LGUs shall prioritize the use of safe and efficient 
digital payment in their financial transactions  
 
All NGAs, GOCCs, and LGUs shall also explore the feasibility of adopting a 
comprehensive incentive framework for selected financial transactions to encourage 
the availment of digital payments. Moreover, LGUs may impose reduced fees or grant 
other incentives for merchants providing efficient digital payment systems. 
 
The BSP shall, in coordination with relevant stakeholders, promote measures 
on financial and digital literacy, and consumer protection to strengthen the public's 
trust in digital payment transactions. 
 
The Department of Science and Technology and the DICT shall implement 
measures to further enhance the availability and cost of internet connection to support 
the government's program on the digitalization of financial transactions. 
 


 
 
 
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SEC. 8. Implementing Rules and Regulations. - The BSP shall, in coordination 
with the Department of Budget and Management, DTI, DICT, and DILG, 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 a newspaper of national circulation. 
 
Approved,