EIGHTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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Third Regular Session 
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SENATE
f1^^ f r, /\}
.. .. .
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VB-eLL
SENATE BILL NO. 2524
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Prepared and submitted by the Committees on Banks, Financial Im citutions and 
Currencies [upon the recommendation of the Subcommittee on Digiti! Payments Act 
(Senate Bill No. 1764, and House Bill No. 8992)] and Finance with Senators Angara,
Poe, Gatchaiian and Cayetano as authors
ACT
PROI^OTING THE ADOPTION OF DIGITAL PAYMENTS FOU FI J/NCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and House of Rc^eesentatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title.
Payments Act”
This Act shall be known as the "Use of Digital
SEC. 2. Declaration of Policy. - The State recognizes tl ie vit al role of 
information and communications technology particularly financial tech: lology, towards 
financial inclusion advancement and nation-building. The State also recognizes the 
need of promoting ease of doing business and effir;ent delivery of goods and services 
to the general public. Towards this end, the State shall promote firanciai inclusion 
through the use of safe, secure, and efficient digital payments. In varir us transactions 
of the government and the public—particularly for payments to g( vernmcrnt, and 
government disbursements to the public, which includes but is not limit ed to payments 
to or by private institutions, merchants, and beneticiaries, the state st all optimize the 
use of financial technologies and innovative payment systems for financial transactions 
and to strengthen financial inclusion. In so doing, the State shall encourage and


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facilitate the adoption of digital payments in a technology-neutral mani .er, where one 
technology is not unreasonably favored or given undue advantage over anorher.
SEC. 3. Objective. - This Act aims to facilitate transactions, arrangements, 
or exchanges of goods and services by promoting the universal use of sr ife, affordable, 
and efficient digital payments in financial transactions of the goverr mem: and the 
general public.
mean:
SEC. 4. Definition of Terms. - As used in this Act, the following terms shall
i. "Access device" refers to any card, plate, code, account nun ber, electronic 
serial number, personal identification number, mobile de/ice, oi 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 valuf;, or ro initiate 
a transfer of funds in electronic form;
ii. 'Account-based disbursement"refers to the disbursement or 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 ch ren and specified I y the iirtended 
recipient;
iii. "Basic deposit account (BDA)"xe.fe.rs to the deposit product oi fereci by banks 
as defined under the BSP Manual of Regulations for Banks and its 
implementing guidelines;
iv. "Digitai coiiection" refers to a mode of payment wherein ibusinesses and 
citizens make payments to the government, including but not imited to 
taxes, fees, and tolls, using a digital device such as mobile shone, ooint 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. "Digitai disbursement"refers to a mode of payment wherebv dislsui sement 
of money or equivalent electronic representations of legal tender, for


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purposes of paying government expenditures, is made by crediting the. target
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recipient's transaction account through advice to debit or electronic fund
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transfer facilitated by any government agency or instrumentality through
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their respective servicing bank;
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vi. "Digital Payments" refers to monetary payment transactions between two
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parties through a digital payment instrument in which both [he payer and
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the payee use an electronic channel;
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vii. "Electronic fund transfer" refers to a transfer of funds between two
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transaction accounts in the same or different BSP-super.'ised financial
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institutions which are initiated and received using electron s devices and
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channels to transmit payment instructions-
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viii. "Electronic money (e-money)"refers to electronically-stored r: lonei ary value
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which is issued in accordance with the BSP Manual of Regulations for Banks
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and the manual of regulations for non-bank financial institutions;
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ix. "Financialinclusion"refers to the state wherein there is effective access to a
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wide range of financial products and services for all Filipinos;
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X. "Government Servicing Payment Service Provider (PSP)" refers to bank and
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non-bank PSPs authorized to accept government funds and perform payment
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services on behalf of government entities. This includes authorized
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government depository banks (AGDBS) as ue.fined by Departn lent c.f I ;inance
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(DOF) regulations;
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xi. "Information security standards" refers to standards which aim to protect
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and secure the confidentiality, integrity, availability, authenticity, and non-
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repudiation of information and 
the dat 
privacy of users of any digital
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payment platforms and other parties 
involved therein;
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xii. "Merchant" refers to a person or entity engaged in buyi-ig and selling
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merchandise, purchasing of services, skills, or expertise, and k. asing of goods
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and services;
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xiii. "Micro-payment transactions" refers to low-value payments including but
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not limited to payments to sari-sari store owners, wet market vendors, as
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well as tricycle and jeepney drivers, the actual thresholds of which shall be
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determined by the BSP, pursuant to the objectives of this Act;


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xiv. "Payment Service Provider (PSP)"refers to an entity, such as bank or non-
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bank electronic money issuer, that provides payment services 
to encl-users,
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such as consumers, 
merchants, and billers, 
includinq government
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institutions;
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XV. "Payment system" refers to the set of payment instruments, processes,
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procedures and participants that ensures the circulation of money or
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movement of funds, which comply with .ne requirements sat foitt; under
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Republic Act No. 11127 or the National Payment System Act;
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xvi. "Transaction Account"refers to an account, such as but not limited to a BDA,
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or e-money account held with a BSP-supervised financial insticutiori tnat can
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be used to store, send, and receive fund:
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SEC. 5, Adoption of Digital Payments for Government Di bursements.
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-All government entities, including but not limited to national government agencies
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(NGAs), foreign-based government agencies, al1 government corporations, local
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government units (LCDs), State Universities and Colleges (SUCs), and local u: ilversities
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and colleges (LUCs), are hereby mandated to utilize safe, and 'efficient digital
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disbursement in the payment of goods, services, and other disbursements including
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but not limited to cash assistance and payments of salaries, wages, a lowances, and
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honoraria of its employees, whatever nature of appointment. Government entities
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shall be allowed to disburse funds directly into the recipient's or beneficiary's
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transaction account held in government or private financial institutions without the
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need for special arrangement with each of these financial institutions. For thin purpose,
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said government entities may use the automatic aebit arrangement, interoperable
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electronic fund transfer or any other appropriate facility of its government servicing
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PSP.
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Accountable officers of the government entities shall observe due diligence in
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ensuring the accuracy of the recipient's or benefic; y's identity. Uses of government
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funds through direct crediting shall remain transparent to state auditois.
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Government entities shall be responsible for preparing the payment instruction
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with the necessary details, including the recipient's or beneficiary's name, transaction


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account details, and amount, among others, only after proper authorijiatJon in 
accordance with established accounting and auditir ' 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 government entity disbursing the fund. Subject to agreement with the 
government entity, the government servicing PSP may collect fees rrom the 
government entity for the electronic fund transfer services.
In case of unsuccessful digital disbursement, there shall tje a recovery 
mechanism that will ensure the continuity of delivery of payment services: Provided, 
That in cases of calamities or other emergencies, where payments through digital 
means may be affected, non-digital payout channel-, may be explored.
SEC. 6. Adoption of Digital Payments for Government Coiections. - All
government entities, including but not limited to national governr lent agencies 
(NGAs), foreign-based government agencies, a!! government corp iraticns, local 
government units (LCDs), 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 govei nment 
entities may engage the services of established PSPs: Provided, That govei nment 
entities shall avail only of interoperable digital payment solutions. Notwithstanding any 
law to the contrary, partner PSP of a government entity shall not be lim.ited to 
government servicing banks.


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SEC. 7. Adoption of Interoperable Digital Payment Soi stious. - The
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BSP shall implement initiatives that aim to accet ate the adoption oy ali PSPs of
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interoperable digital payment technologies and appropriate standards thereof, such
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as but not limited to the National Quick Response (QR) Code Standard n leant to hasten
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the interoperability of QR-driven payment services and eliminate the need for
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merchants and clients to maintain several accounts
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In addition, NGAs, government corporations, SUCs, LGUs and merchants shall
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undertake measures to promote the adoption of the Open Finance Framiework in
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accordance with the guidelines set forth under the applicable BSP rules and re gulations
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which will enable sharing of customer-permissioned financial daia and foster
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adherence to data security and privacy standards.
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The digital payment solutions adopted by government entities shall ailow for
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real-time receipt of funds by the recipient government entity, immediate issuance of
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electronic invoices and/or official receipts to payors, regular audit reports, and other
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technical features that will aid in the fulfillment of ti le objectives of this Act. '.T ensure
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that these digital payment solutions adhere to applicable internationEJ standards on
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information security, data privacy, and electronic data interchange berween financial
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institutions, among others, government entities shall avail of digital payment solutions
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under the BSP's National Retail Payment System Fi imework.
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Existing agreements between government entities and PSPs st all be.' honored
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until the respective terms thereof expire: Provided, That parties concerned shall
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endeavor, within one year from the effectivity of this Act, to implemerit amendments
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to such agreements with intention to remove provirions detrimental to publi: interest.
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In all instances, collection and payment schemes that prevent transparency and
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accountability over public funds, as well as arrangements disadvaniageous to the
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government, shall be discontinued.
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There shall be a technical working group (TWG) composed of toe Commission
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on Audit (COA), Department of Budget and Management (DBM), Department of
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Finance (DOF), Bureau of the Treasury (BTr), Bureau of Internal Revemue 'BIR), the
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Gover nment Procurement Policy Board, and other relevant agencies t.iat will provide
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guidance and promote cost-efficiency and transparency in procurement or digital
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payment solutions by government entities. Consis .ent with the respective mandates


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of the member-agencies, and in coordination with the COA, the TWG shall nave the
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following powers and functions:
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a) Oversee and monitor the procurement of digital paymeni: solutions by
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government entities and ensure that the same is in accordance witn existing
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laws, rules and regulations;
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b) Consider the formulation of standard i:( i ms and condition. for PSPs, in
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consultation with the BSP and COA. Pursuant to its mandate, the GPPB may
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also issue specific procurement guidelines for the engagemeiit of PSPs;
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c) Resolve issues relative to the implementation of this Act, without prejudice
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to the individual member-agencies resolvi ig such concerns pursuant to their
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respective mandates;
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d) Call on any department, agency or office under the Executive Branch for the
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effective implementation of this Act; and,
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e) Perform such other function pursuant to the fulfillment of th e objectives of
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this Act.
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SEC. 8. Establishment of a Government Payment Gateway. - Tlie BSP,
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in consultation with the DOF, DBM, COA, Department of Inrormation and
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Communications Technology (DICT), BIR, BUREAU OF CUSTOMS (Bi)C), Bureau of
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the Treasury (BTR), digital banking experts, academe, and other appropriate public
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sector and banking industry stakeholders, may cause the estab ishment of a
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government payment gateway through which all government entities may process
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digital payments made to them through PSPs, web:, tes, mobile phone applic at'ons, or
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other access devices.
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The government payment gateway shall allow for real-time settlement of
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accounts and receipt of funds by the recipient government entity, immediate: issuance
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of electronic invoices and/or official receipts t~ payors, regular audii leports,
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interoperability between digital payment technologies, and other tecnnical matures
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that V7ill aid in the fulfillment of the objectives of this Act. Said gatew ay sh all adhere
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to relevant international standards on information security, datr pri\acy, and
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electronic data interchange between financial institutions.
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SEC. 9. Digital Payment Capability of ’Merchants. - To accelerate the
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adoption of digital payment, LGUs shall, by ordinance, encourage and grant monetary
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and non-monetary incentives to merchants within their localities to establish and/or
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outsource arrangements and/or mechanisms that would enable them to receive
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payments from clients and make payments to creditors and suppliers usiiiq digital
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channels.
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LGUs shall ensure that merchants in their jurisdictions have access to a[ propriate
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digital payment solutions and have the capacity to effectively use the same, with due
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consideration to small and micro-merchants, including, but not limited to, market
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vendors, tricycle operators and food stalls. The Lf. i shall extend assistance to small
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and micro merchants to facilitate their adoption of digital transaction :apa!)ility. The
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BSP, Department of Trade and Industry (DTI), DILG, AND DICT shall pi ovide capacity
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building for the NGAs, government corporations, SUCs, LGUs, and me rchar ts on the
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use of digital payments.
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SEC, 10. Promotion of Digital Payment Transactions. — To oplirr ize the
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benefits of digital payments, scale up financial inclusion, and promote sustainability,
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all government entities shall prioritize the use of safe and efficient dig.tal payinent in
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their financial transactions.
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All government entities covered by this Act shall also adopt a comprehensive
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incentive framework for selected financial transactions to encourage ti e ust: of digital
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payments. LGUs shall, likewise, grant relevant incentives for merchants providing
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efficient digital payment systems.
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The BSP, in coordination with relevant stakeholders, shall promote measures on
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financial and digital literacy, and consumer protection to strengthen tl ie puoli :'s trust
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in digital payment transactions.
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To enable the general public to adopt gital payments, mien -payment
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transactions shall be subject to graduated pricing or be rendered free of any service
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charge as determined by the BSP in consultation with the merchants and the payment
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services industry, as may be represented by the BSP-accredited p syment system
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management body.


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The DICT shall implement measures to f ther enhance the availability, 
accessibility, reliability, and cost-efficiency of internet services tc support the 
Government's program on the digitalization of financial transactions.
Sec. 11. Multi-Year Roadmap for Digital Payment Adoptior -The 3SP, in 
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.
This Multi-year Roadmap shall be aligned with the e-government masterplan 
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 tne widespread 
adoption of digital payments by merchants, for a minimum period of five {5) years, 
and include strategic public and private interventions and possible go7ernment 
programs and projects. The roadmap shall be subj ctto annual review.
SEC. 12. Transitory Provision. - Government entities shall be -espcnsible for 
ensuring proper transition of their respective agency's disbursement and ccllection 
procedures and policies to digital payments.
Digital disbursement shall be implemented within six (6) months frcm 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 appl e Tne tiering 
guidelines, to be established by the TWG as part of the IRR, shall reflect differentiated 
transition timeframes 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 transit! m period while 
others may be allowed a longer transition period bat not to exceed thiee (a) /ears.
SEC. 13. Information Security and Data Privacy. - All data i iforn al ion and 
information and communications technology systems and networks, used for digital 
payments pursuant to the objectives of this Act s ill be secured and orotected at all 
times. The DICT and the National Privacy Commission shall, in consultation with the


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BSP, define and prescribe the minimum informatioi : security standards for com.pliance 
of PSPs who are covered by this Act and are not under the oversight and regulatory 
authority of the BSP.
SEC. 14. Obligations of Payment Syster : Providers. — Ir 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 t'le s/sfem in 
accordance with any of the criteria for lawful processing provided roi under 
relevant laws, rules and regulations;
c) Implement reasonable and appropriate organizational, physical and technical 
security measures for the protection of personal data and upheld the rights of 
data subjects;
d) Provide reasonable and timely assistance to MGAs, government corporations, 
LGUs, sues, and/or merchants, in accordance with relevunt i tiles and 
regulations, to enable them to respond to a request from dieiits to exercise 
any of their rights and any other correspondence, inquiry or coniplaint 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;0r payment of 
transaction on behalf of the government ao1 ncy shall, to the ex'.ent tiecessary, 
cooperate with the COA for the examination, audit, and sectlem.erit of all 
accounts pertaining to the revenue and receipts, and expendit .ires 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;
f) Comply with the requirements indicated in the standard terms of reverence or 
standard minimum terms and conditions that may be issued by the' AA G.
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SEC. 15. Penalties and Sanctions. - Without prejudice to the penalties and
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sanctions provided in Republic Act No. 11127 or "The National Payment Systems Act"
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and other laws, whenever any person or entity willfully violates this Act, rule or
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regulation, directives or orders duly promulgated 
by the BSP pursuant he reto, the
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person or persons responsible for such violation shtbe punished by a l ine a>f not less
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than Two hundred thousand pesos (P200,000.00) or more than Two million pesos
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(P2,000,000.00) or by imprisonment of not less than two (2) years nor more tinan ten
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(10) years, or both, at the discretion of the court.
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SEC. 16. Interpretation. - Nothing in this Act shall be construed to exempt any
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government funds in the possession of private entities from the constitutional
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authority and duty of the COA to examine, audit, and settle all accoun s pei raining to
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the revenue and receipts of, and expenditures or uses of funds and pi open y, owned
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or held in trust by, or pertaining to, the government. All digital payments involving
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government transactions under this Act shall be subject to post-aucit of the COA.
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Accordingly, the COA shall promulgate the pertinent rules and regulations for all
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transactions covered by this Act.
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SEC. 17. Appropriations. - Government entities may be allcwed ;o include
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in their respective budgets amounts that will cover the reasonable costs of estaolishing
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and maintaining the infrastructure, system and/or processes adjustments us well as
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transaction fees that they may shoulder in conn mtion with the implementation of
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digital payments, including but not limited to, merchant discount rate, processing fees,
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cash-out fees and administration fees: Provided, That the release of said budget may
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be conditioned on the actual adoption of digital payments by the concerned
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government entities.
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Government entities may also top-up cash assistance with a standaid amount
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to cover any transaction fees that may be incurred by recipients or benefici5 ries when
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claiming or withdrawing said cash assistance from their respective transaction
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accounts.
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The amount necessary for the implementation of the provisions of this Act shall
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be taken from the current year's budgets of the NGAs, government corooratioris, SUCs
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and LCDs. Thereafter, such sums as may be necessary for he 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. Implementing Rules and Regulations. - The BSP, in coorciination 
with the DBM, COA, DOF, BTR, BIR, DICT, DOST, DILG, DTI, and othei relevant 
agencies, shall promulgate the rules and regulations implementing tha previsions of 
this Act within ninety (90) days from its effectivity.
SEC. 19. Separability Clause. - If for any reason, any part or p ovisror, of this 
Act is declared invalid or unconstitutional, the remaining parts or provisions not 
affected shall remain in full force and effect.
SEC. 20. 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. 21. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette ov in a newspaper of national circulation.
Approved,
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