NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
S. No. Dot)
of tl)f ^
72 JUL13 P4 33
RmsVPn BY:
Introduced by Senator Grace Poe
AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS THROUGH 
CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
EXPLANATORY NOTE
According to the Bangko Sentral ng Pilipinas (BSP), financial inclusion refers 
to the "state in which everyone, especially the vulnerable sectors, has effective 
access to a wide range of financial services. Effective access means not only the 
availability of financial products and services, but that these products and services 
are appropriately designed, of good quality, and responsive to the varied needs of 
Individuals and businesses.../<L. Financial inclusion is an essential foundation for a 
sustainable and equitable national development.
Considering the adverse impact of the COVID-19 pandemic to our economic 
sector, the pursuit for financial inclusion has become more crucial and urgent now 
more than ever. In working for greater inclusion, in 2015, BSP launched the National 
Strategy for Financial Inclusion2 which emphasized the importance of financial 
inclusion as an element for financial empowerment, broad-based development and 
inclusive growth among Filipinos. The strategy identified four pillars in support of 
this vision: a) policy, regulation and supervision; b) financial education and 
consumer protection; c) advocacy programs; and d) data and measurement.
Moreover, in efforts to reach and serve more Filipinos especially those in far- 
flung areas, in 2017, BSP, through its Monetary Board, issued guidelines for new 
bank service channels and eased existing regulations on deposits by taking services 
outside banks5. Under this regulation, banks are now allowed to serve clients 
through cash agents contracted by banks to accept and withdraw cash without prior 
BSP authorization. The services include withdrawals and fund transfers, online self- 
service deposits, bills payment, collection and forwarding of application documents
1 https://www.bsp.gov.ph/Pages/InclusiveFinance/NSFI-2022-2028.pdf
2 http://www.bsp.gov.ph/downIoads/publications/2015/PhilippinesNSFlBooklet.pdf 
5 http://www.bsp.gov.ph/pubIications/media.asp?id=4274&yr=2017


for loan and account opening, among others. Cash agents may also perform Know- 
Your-Customer procedures, as well as sell and service insurance as authorized by 
the Insurance Commission.
According to BSP Goveriior Benjamin Diokno, at present, there are stiil more 
than 41 million or 53% of the country's adult population (aged 15 above) who 
remains unbanked6. While lack of money, documentary requirements or need for an 
account are cited as reasons why these Filipinos do not own bank accounts, 
accessibility can also be considered a factor. In 2021, BSP estimated that 15.5% of 
cities and municipalities in the country still has no banking presence7.
BSP is aiming to achieve its goal to have 70% of the adult population be part 
of the formal financial system by 2023. This measure seeks to complement the 
government efforts by enhancing and expanding the role of cash agents in banking 
while providing safeguards such as stringent eligibility and evaluation requirements 
for these cash agents, and ensuring that standard bank protocols and due diligence 
are observed when they are dealing with clients. This bill also encourages cash 
agents to establish business in remote areas by providing investment and tax 
incentives.
If enacted into law, the Bangko sa Baryo Act would create an enabling 
regulatory environment for innovations and allow banks to exponentially expand 
reach through cash agents and serve a wider client base, particularly in the low- 
income and rural areas.
Thus, approval of this measure is eagerly sought.
6 https://www.pna.gov.ph/articles/1167923
7https://www.bsp.gov.ph/Meclia_And_Research/Financlal%20lnclusion%20Dashboard/2021/FIDashboard_2
Q2021.pdf
i 2


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
SENATE
s. No. _5_3_5_
72 M. 13 P4 33
.Rl-CEIVEO BY:
Introduced by Senator Grace Poe
AM ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS THROUGH 
CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Title. — This Act shall be knov'/n as the "Bangko sa Baryo
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Act".
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Sec. 2. Declaration of Policy. — The State recognizes the vital role of banks in
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providing an environment conducive to the sustained development of the national
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economy. Towards this end, the State she!! create an enabling regulatory
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environment for innovations and allow banks to exponentially expand reach through
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cash agents and serve a wider client base, particularly in the low-income and rural
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areas.
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Sec. 3. Definition of Terms. — As used in this Act:
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a. Cash Agent means any person with a retail outlet such as but not limited to
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convenience stores, pharmacies and other highly accessible retail outlets that
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deliver bank services provided in Section 7 of this Act.
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b. Contracting Bank means any bank requesting authority from the Bangko
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Sentral ng Pilipinas (BSP) to expand service delivery channels through cash
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agents.
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c. Remote area means an area that either is a long distance from highly
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populated settlements or lacks transportation links that are typical in more
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populated areas duly-identified by the concerned Local Government Unit
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(LGU) in coordination with the BSP.
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d. Person means natural or juridical person.
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The Monetary Board may, by regulation, further define or clarify terms used
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in this Act consistent with the declared state policies above.
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Sec. 4. Eligibility Requirements for Cash Agents. — A Cash Agent may file an
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application to a Contracting Bank provided that the following requirements are met:
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a. It is a duly-registered business In the Philippines;
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b. It has a well-established commercial activity existing for at least three (3)
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months;
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c. It has a permanent establishment and sufficient capacity to properly operate
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electronic devices; 
and
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d. It has the necessary Infrastructure to possess banking operations.
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Sec. 5. Preliminary Screening. —• Upon satisfying submission of the eligibility
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requirements for a cash agent, the Contracting Bank shall conduct a pretminary
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screening of the documents ensuring that:
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a. The result of the preliminary screening shall be released within five (5)
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working days;
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b. In case Cash Agent falls the preliminary screening, the Contracting Bank shall
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return the documents and notify Cash Agent of the grounds of failure. The
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Cash Agent may re-submit documentary requirements within thirty (30) days
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from denial; and
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c. In case Cash Agent passes the preliminary screening, the Contracting Bank
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shall forward the application to the BSP.
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Provided, That, the Confracting Bank shall have an electronic banking solution
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to implement its cash agent operations and comply with the requirements of Part
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Seven of the Manual of Regulations for Banks (MORB), on the Guidelines on
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Electronic Banking Services and Operations. The bank shall deploy to its cash agents
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a device through which its customers can perform secure online, real-time deposit
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and withdrawal transactions for his/her own bank account, fund transfers and bills
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payment (self-service transactions).
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Provided, Further, that the Board of Directors of the Contracting Bank shall
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adopt clearly-defined written policies, procedures, and controls for its Cash Agent


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operations, including but not limited to. Cash Agent selection and due diligence, and 
customer care arrangements.
Sec. 6. Evaluation Process. — BSP shall be tasked to create an online 
evaluation process for Cash Agent application while ensuring that:
a. Cash Agent demonstrates good reputation and credit history, including lack of 
previous civil and criminal record, and has a deposit account with the 
Contracting Bank against which all bank transactions will be conducted.
b. The result of the application shall be released within seven (7) working days 
upon the application from Contracting Bank.
c. In case an application shall be rejected, the applicant shall be given a 
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 Cash Agent to Contracting Bank valid for two (2) years.
The Authority to Utilize Cash Agent shall be displayed conspicuously in the 
Cash Agent's retail outlet.
Sec. 7. Revocation of Authorization. — BSP shall revoke the Authority to 
Utilize Cash Agents if a Cash Agent no longer meets the standards set to qualify for 
the requirements under this Act prior to its expiration.
Sec. 8. Bank Transactions and/or Services. — A duly-authorized Cash Agent 
may perform any or all of the following bank transactions/services:
a. Accept and 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 
his/her bank account;
Fund transfers performed by the customer;
Bills payment; and
Payments due to government institutions, i.e., members' contributions 
to the Social Security System and premiums payable to the Philippine 
Health Insurance Corporation.
Collect and forward applications for opening a savings account.
II.
iii.
iv.


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c. Forward loan application documents.
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d. Perform Initial Customer Identity Verification: (i) conduct Customer Due
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Diligence (CDD) in opening low transactional and low risk accounts or
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accounts subject to deposit and transactional limits; (ii) prevent Anti-Money
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Laundering and Countering Financing of Terrorism.
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e. Others: Payment (including loan repayments) using credit and debit cards,
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checks, and cash; (ii) transfers between bank accounts including of other
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banks, (iii) balance inquiries, and (iv) check cashing.
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Sec. 9. Investment Incentives. — Any Cash Agent that establishes business in
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a Remote Area shall be entitled to the following incentives:
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a. Free training of Cash Agent personnel on various bank processes conducted
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by the BSP;
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b. Expedited processing of permits and certificates that are requisites to
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business registration and operation; and
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c. Expedited processing of local government permits and other related
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documents.
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The Department of Trade and Industry (DTI) shall require the Securities and
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Exchange Comm.ission (SEC) and the LGU Involved to crerte mechanism for
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expedited processing resulting in a timeline from application to approval.
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Sec. 10. Tax Benefits. — A Cash Agent in a Remote Area shall be exempt
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from income tax arising from the operation of the enterprise for a period of one (1)
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year.
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Sec. 11. Role of LGUs. - - The concerned LGU shall encourage and provide
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incentives to a Cash Agent in relation to the purpose of this Act pursuant to the
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Local Government Code. Further, the concerned LGD shall hold programs In the
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barrio/barangay on financial literacy and capability to increase understanding of
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different financial service and products.
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Sec. 12. Subcontracting Agents. — Cash agents cannot subcontract to third
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parties.
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Sec. 13. Agent Exclusivity. — BSP may permit temporary agent exclusivity for 
a period not exceeding two (2) years. Otherwise, the Cash Agent shall enter into an 
agreement with another Contracting Bank.
Sec. 14. Fees. — Cash agents may set customer fees and charge customers 
directly, provided that the Contracting Bank and the DTI shall monitor such pricing 
for signs of exploitation or customer confusion.
Sec. 15. Principal Liability for Agents. — The Contracting Bank is liable for all 
actions and/or omissions of the Cash Agent. This responsibility extends to actions of 
the Cash Agent even if not authorized In the contract so long as they relate to 
banking services or matters connected therewith.
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. 16. Implementing Rules and Regulations. — BSP in coordination with the 
Anti-Money Laundering Council (AMLC), Insurance Commission, a representative 
from the Union of Local Authorities of the Philippines (ULAP) and 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. 17. Separability Clause. — If any section or part of this Act is held 
unconstitutional or invalid, the other sections or provisions not otherwise affected 
shall remain In full force and effect.
Sec. 18. Repealing Clause. — 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. 19. Effectivity. — This Act shall take effect fifteen (15) days after its 
publication either In the Official Gazette or in a newspapers of general circulation.
Approved,