ceP RE.

Republic of the Philippines 7 RECEIVED
House of Representatives ) DATE: MAY_0 4 2080
Quezon City ig "piibaw,

EIGHTEENTH CONGRESS

First Regular Session

House Bill No. 6652

Introduced by Representative Jose Enrique S. Garcia III

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

EXPLANATORY NOTE

The Philippines has one of the highest percentages of people in Southeast
Asia who do not have bank accounts and who transact in cash.’ Statistics from the
Bangko Sentral ng Pilipinas (BSP) show that while this could be attributed to the
condition that only 37% of the 1,634 cities and municipalities across the country do
not have banking offices, it is equally astonishing that 81.3% of households in
Metro Manila do not own bank accounts.’

Among Filipino consumers today, only 3% are carded; 25% have bank
accounts but are underserved; and 75% (equivalent to 86% of households) are
fully unbanked. Without a banking account, Filipino consumers are mostly dealing
with cash in their financial transactions.

That most Filipinos are not carded, underserved, or unbanked is
conveniently blamed for the sluggish adoption of cashless technology in the
country. This is exacerbated by the fact that access to the internet remains to be
among the slowest and more expensive in the region while Filipinos still entertain
lack of trust over digital systems.

Despite the above perceived hindrances, there is actually no shortage of
electronic payment patrons in the Philippines. A survey conducted in 2016 showed
that majority of Filipinos are ready to go cashless. Six out of 10 Filipinos prefer
cashless payment. There is, however, a shortage of facilities and resources that

" https:/ww.grab.com/phipress/others/grab-receives-approval-from-bangko-sentral-ng-pilipinas-
to-rapidly-expand-grabpay-services/; last accessed on 28 April 2020
https://grit,ph/cashless/; last accessed on 28 April 2020.



can acknowledge cashless payments. This in turn limits the availability of cashless
payments in the country.®

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 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 entail lower operating costs. It likewise increases financial inclusion to support
broad-based economic development that can contribute to inclusive growth in the
country.

‘Support for this bill is therefore earnestly sought from my colleagues.
anne
REP. JOSE ENRIQUE S. GARCIA III
Seognd District, Bataan

Sid.


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Republic of the Philippines
House of Representatives
Quezon City
EIGHTEENTH CONGRESS
First Regular Session

House Bill No.__ 6692

Introduced by Representative Jose Enrique S. Garcia Ill

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 “Use 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
recognizes the need of promoting ease of doing business and efficient delivery of
good 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 shall
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;

(c) ‘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;

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

(e) ‘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),
government-owned and controlled corporations (GOCCs), and local government
units (LGUs) are hereby mandated to utilize e-money 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
(DICT) 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 EMls 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
e-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.


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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 a newspaper of national circulation.

Approved.