Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
Second Regular Session

HousE BILL No, 1452

Introduced by ANG PROBINSYANO
Party-List Representative Alfred Delos Santos

EXPLANATORY NOTE

Despite the growing relevance of financial technology mechanisms in the
Philippines such as being pioneers in mobile banking, there remains a huge gap
in reaching financial inclusivity in our country, especially in rural areas.
Financial awareness and literacy remain to be a huge aspect of rolling out
financial technology and many Filipinos, even those who are engaged with such
technology, are unaware of digital options (BSP, 2017). Moreover, even if people
are aware of such options, Filipinos hesitate to share personal information with
such platforms due to cybersecurity issues that have been plaguing online
financial productivity and platforms. Other issues pose barriers to the inclusion
of Filipinos in digital finance such as access to basic financial products and
fragmented financial and business institutions.

The proposed bill addresses all of these problems. It is the responsibility of the
State to bring about financial inclusivity especially with those living in rural and
underdeveloped areas through mechanisms that ensure equitable access to
financial technology. It addresses issues on financial awareness, trust, inclusion,
and access. This bill aims to empower Filipinos to be more financially stable and
capable to pursue personal and economic development.

In view of the foregoing, immediate approval is highly recommended.

ALFRED C. ‘LOS SANTOS
Representative, Ang Probinsyano Partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 452

Introduced by ANG PROBINSYANO
Party-List Representative Alfred Delos Santos

AN ACT PROMOTING RURAL FINANCIAL INCLUSION AND LITERACY

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 as the “Rural Financial
Inclusion and Literacy Act.”

SECTION 2. Declaration of Policy. - In recognition of the importance of
bringing about financial inclusion and literacy, the State shall endeavor in
innovations that reduce financial vulnerabilities and promote financial
empowerment to citizens. The State shall also commit to taking proactive
measures in developing technology capabilities of various financial institutions
in rural areas to improve access to financial services.

Guided by the National Strategy for Financial Inclusion (NSFI) under the
Philippine Development Plan, the State shall ensure that programs shall
contribute in establishing a financial system that benefits all Filipinos,
regardless of socio-economic status, and thereby contribute to inclusive growth
and development, especially within rural and provincial areas.

SECTION 3. Financial Literacy. - In order to promote engagement with
financial services and institutions in rural areas, there shall be an established
proactive and sectoral financial and digital literacy program. The program shall
contain a basic understanding of concepts but will further allow for technical
application in partnership with financial institutions such as banks and lending
companies in order to acquire knowledge and develop skills to make well-
informed economic and financial decisions. Priority sectors shall include, but not
limited to, students, farmers, fisherfolk, micro, small, and medium enterprises
(MSMEs).


Further, it shall be implemented by the Bangko Sentral ng Pilipinas (BSP),
Department of Finance (DOF), Department of Education (DepEd), Department of
Agriculture (DA), Department of Trade and Industry (DTI), Cooperative
Development Authority (CDA). For a more inclusive implementation, non-
government organizations (NGOs) and civil society organizations (CSOs) shall be
also included in the implementation of financial literacy programs. Completion
of such a program may be used to comply with requirements of financial
institutions on various financial products such as, but not limited to, savings,
payment, credit, and insurance.

SECTION 4. Capacity Development for Rural Financial Institutions. —
Capacity-building programs to improve knowledge of financial technologies
within traditional banks, particularly rural banks shall be implemented such as,
but not limited to, mobile payments, online lending, blockchain applications for
the banking sector, and move data processing to the cloud through expanding
awareness of BSP instructions on approved approaches to data migration and
storage. It shall also include capacity development programs for staff and
operators to maximize the potential of financial technology application.

Further, the Bangko Sentral ng Pilipinas (BSP), together with FinTech
Philippines Association, shall facilitate the procurement process for rural banks
to engage with financial technology by establishing a trustworthy, third-party
accreditation for those engaged with the financial technology industry.

Further, to promote trust in the development and application of technology
to financial services, financial institutions shall prioritize and include
cybersecurity safeguards and planning in the earliest stages of project and policy
design.

SECTION 5. National Financial Inclusion Steering Committee. - To further
systematically accelerate financial inclusion, there shall be an established
National Financial Inclusion Steering Committee. It shall spearhead
collaborative efforts to address regulation and execute innovative modes of
implementation.

The Committee shall be composed of the Bangko Sentral ng Pilipinas (BSP)
as its chair and members include the heads of the Department of Finance,
Department of Education, Department of Trade and Industry, Department of
Social Welfare and Development, Department of Budget and Management,
National Economic and Development Authority, Insurance Commission,
Commission on Filipinos Overseas, Securities and Exchange Commission,
Philippine Statistics Authority, Philippine Deposit Insurance Corporation, and
Cooperative Development Authority. Heads of other government agencies may be
invited as FISC members as necessary.

Further, the National Financial Inclusion Steering Committee (NFISC),
together with other relevant government agencies, shall provide for mechanisms


that protect and boost financial activities especially within the provinces and
rural areas. The aforementioned government institutions and agencies shall
cooperate to implement the National Strategy for Financial Inclusion (NSFI)
under the Philippine Development Plan.

SECTION 6. Priority Implementation Points. ~ There shall be priority agenda
implementation points to establish a digital financial ecosystem that can support
the diverse needs of all users in a manner that is secure, sustainable, convenient,
and affordable, especially in provinces and rural areas. It may include, but not
limited to:

1. efficient retail payments system;

2. an expansive network of low-cost touchpoints and accredited cash
agents;

3. democratized access to a transaction account through the utilization
ofa national ID system as mandated by RA 11055, otherwise known
as the Philippine Identification System Act (PhilSys Act); and

4. collaboration with pawnshops and money service business

SECTION 6. Separability Clause. - If any provision or part of this Act is
held invalid or unconstitutional, the remaining provisions or parts unaffected
shall remain in full force and effect.

SECTION 7. Repealing Clause. - All laws, executive orders, presidential
decrees or issuances, letters of instruction, administrative orders, rules, and
regulations contrary to or inconsistent with the provisions of this Act are hereby
repealed, amended, or modified accordingly.

SECTION 8. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in a newspaper of general
circulation.

Approved,