BGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
SENATE 
S. No. 1682
'is? RECEIVED
t5o e-filed
IS
iCP T* J:5° p.m.
INDEX.
Introduced by Senator Grace Poe
AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS THROUGH 
CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
Explanatory Note
Financial inclusion has been a challenge in the Philippines. According to the Bangko 
Sentral ng Pilipinas (BSP) data, around 60% of the country's adult population (aged 
15 above) remains unbanked as of 2017. Only 15% save money while 10% borrow 
money from formal financial Institutions. Accessibility and cost have been the primary 
obstacles towards financial inclusion, with around 33% of cities and municipalities 
having no banking presence1.
Financial inclusion has become an important policy objective of the national 
government. 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, BSP, through its Monetary Board, issued guidelines in 2017 for new bank service 
channels and eased existing regulations on deposits by taking services outside banks3. 
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 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.
http://www.bsp.gov.ph/downIoads/Publications/2018/FIDashboard_lQ2018.pdf 
http://www.bsp.gov.ph/downloads/pubiications/2015/PhilippinesNSFIBookiet.pdf 
1 http://www.bsp.gov.ph/publications/mediaasp?id=4274&yr=2017


Bangko sa Baiyo Act of 2020 seeks to incorporate this new BSP guideline while 
enhancing and expanding the role of cash agents in banking. The bill stressed that 
the contracting bank remains ultimately liable for agent actions thus they should 
ensure that cash agents pass eligibility requirements and BSP evaluation procedures, 
follow standard bank protocols, and exercise due diligence when dealing with clients. 
The bills also provides investment and tax incentives to cash agents who will establish 
business in remote areas.
If enacted into law, the Bangko sa Baryo Act of 2020 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.
* g GRACE POE


BGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
SENATE 
S. No. 1682
S DATE I July 13 2020 
(/> 
-------- 1:50 p.m.
E-FiLED
time:
Introduced by Senator Grace Poe
AN 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 known as the "Bangko sa Baryo Act
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of 2020".
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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 shall create an enabling regulatory environment
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for innovations and allow banks to exponentially expand reach through cash agents
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and serve a wider client base, particularly in the low-income and rural areas.
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Sec. 3. Definition of Terms. — For purposes of this Act, the following definitions
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shall apply to the following terms:
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a. Cash Agent refers to 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 Ac;
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b. Contracting Bank refers to 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 refers to an area that either is a long distance from highly
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populated settlements or lacks transportation links that are typical in mote
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populated areas duly-identified by the concerned Local Government Unit in
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coordination with the BSP;


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d. Person refers to a natural or juridical person.
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The Monetary Board may, by regulation, further define or clarify terms used in
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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 with a Contracting Bank provided that the foliowing requirements are met:
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a. It is a duly-registered business in the Philippines;
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b. It has engaged in commercial activity existing for at least three (3) months;
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c. It has conducted Its commercial activities continuously in a place and area that
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is known to the public, and possesses sufficient capacity to properly operate
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electronic devices; and
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d. It has the necessary infrastructure to undertake banking operations.
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Sec. 5. Preliminary Screening. 
— Upon submission 
of the eligibility
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requirements for a Cash Agent, the Contracting Bank shall conduct a preliminary
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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) working
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days;
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b. In case Cash Agent fails the preliminary screening, the Contracting Bank shall
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return the documents and notify Cash Agent of the grounds of failure. The Cash
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Agent may re-submit documents within thirty (30) days 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 Bangko Sentral ng Pilipinas (BSP).
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Provided, the Contracting Bank shail have an electronic banking solution to
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implement its cash agent operations and comply with the requirements of Part Seven
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of the Manual of Regulations for Banks (MORB), on the Guidelines on Electronic
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Banking Services and Operations. The bank shall deploy to its cash agents a device
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through which its customers can perform secure online, real-time deposit and
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withdrawal transactions for his/her own bank account, fund transfers, bills payment,
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and self-service transactions: Provided, further, That the Board of Directors of the
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Contracting Bank shall adopt clearly-defined written policies, procedures, and controls
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for its Cash Agent operations, including but not limited to. Cash Agent selection and
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due diligence, and customer care arrangements.


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Sec. 6. Evaluation Process. — BSP shall create an online evaluation process for
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a Cash Agent application while ensuring that:
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a. Cash Agent demonstrates good reputation and credit history, has no previous
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civil and criminal record, and has a deposit account with the Contracting Bank
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against which all bank transactions will be conducted;
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b. The result of the application shall be released within seven (7) working days
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upon the application from Contracting Bank;
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c. In case an application shall be rejected, the applicant shall be given a
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registered, written notification that indicates and explains the ground/s for
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rejection;
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d. In case an application shall be approved, BSP shall Issue an Authority to Utilize
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as Cash Agent to Contracting Bank vaiid for two (2) years.
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The Authority to Utilize as Cash Agent shall be displayed conspicuously in the
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Cash Agent's retail outlet.
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Sec. 7. Revocation of Authorization. — BSP shall revoke the Authority to Utilize
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as Cash Agents if a Cash Agent no longer meets the standards set to qualify for the
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requirements under this Act.
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Sec. 8. Bank Transactions and/or Services. — A duly-authorized Cash Agent
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may perform any or all of the following bank transactions/services:
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a. Accept and disburse cash on the bank's behalf in connection with the following
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self-service transactions of customers:
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i. 
Deposit and withdrawal transactions performed by the customer on
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one's bank account;
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ii. 
Fund transfers performed by the customer;
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iil. 
Bills payment; and
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iv. 
Payments due to government institutions, such as contributions 
to the
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Social Security System and premiums payable to the Philippine Health
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Insurance Corporation, PAG-IBIG and others;
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b. Collect and forward applications for opening a savings account;
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c. Forward loan application documents to Contracting Bank;
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d. Perform Initial Customer Identity Verification:


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I. Conduct Customer Due Diligence (CDD) investifations in opening low 
transactional and low risk accounts or accounts subject to deposit and 
transactional limits;
ii. Prevent Anti-Money Laundering and countering financing of terrorism 
activities;
e. Other transactions
i. 
Payment (including loan repayments) using credit and debit cards, 
checks, and cash;
ii. 
Transfers between bank accounts including those to be remitted to other 
banks;
iii. 
Balance inquiries; and
iv. 
Check encashment.
Sec. 9. Investment Incentives. — A Cash Agent that establishes operations in 
a remote area shall be entitled to the following incentives:
a. Free training of Cash Agent personnel on various bank processes conducted by
the BSP;
b. Expedited processing of permits and certificates that are requisites to business
registration and operation; and
c. Expedited processing of local government permits and other related
documents.
The Department of Trade and Industry (DTI) shall require Securities and 
Exchange Commission (SEC) and the local government unit (LGU) involved to create 
mechanism for expedited processing from application to approval.
Sec. 10. Role of LGUs. — The concerned LGU shall encourage and provide 
incentives to a Cash Agent in relation to the purpose of this Act pursuant to Republic 
Act No. 7160, otherwise known as the Local Government Code of 1991.
The concerned LGU shall conduct training programs in the barangay on 
financial literacy and capacity-building to increase understanding of different financial 
service and products.
Sec. 11. Subcontracting Agents. — A Cash agents cannot subcontract its 
operations or businesses to third parties.


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Sec. 12. Agent Exclusivity. — BSP may permit temporary agent exclusivity for
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a period not exceeding two (2) years. Otherwise, the Cash Agent shall enter into an
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agreement with another Contracting Bank.
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Sec. 13. Fees. — A Cash agents may set customerfees and charge customers
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directly: Provided, That the Contracting Bank and the Department of Trade and
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Industry shall monitor such pricing for signs of exploitation or customer confusion.
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Sec. 14. Principal Liability for Agents. — The Contracting Bank is liable for all
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actions and/or omissions of the Cash Agent, provided such act is within the bounds of
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the agency.
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The Contracting Bank shall exercise due diligence to ensure its Cash Agents
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comply with applicable rules, regulations, and policies on anti-money laundering,
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consumer protection, bank secrecy and customer data confidentiality.
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Sec. 15. Implementing Rules and Regulations. — BSP in coordination with the
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Anti-Money Laundering Council (AMLC), Insurance Commission, a representative from
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the Union of Local Authorities of the Philippines (ULAP) and DTT shall promulgate, not
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later than thirty (30) days upon the effectivity of this Act, the necessary rules and
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regulations for its effective implementation.
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Sec. 16. Separability Clause. — If any section or part of this Act is held
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unconstitutional or invalid, the other sections or provisions not otherwise affected shall
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remain in full force and effect.
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Sec. 17. Repealing Clause. — All laws, decrees, executive orders, rules and
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regulations, issuances or any part thereof inconsistent with the provisions of this AcL
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are hereby repealed, amended or modified accordingly.
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Sec. 18. Effectivity. — This Act shall take effect fifteen (15) days after its
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publication either in the Official Gazette or in at least two (2) national newspapers of
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general circulation.
Appmvedf