NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE 
S. No.
of tif? ftriri
*22 JUL 13 A10 :18
RECEIVED BV;
Introduced by SENATOR JINGGOY EJERCITO ESTRADA
AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS THROUGH 
CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
EXPLANATORY NOTE
The 2019 Financial Inclusion Survey published by the Bangko Sentral ng 
Pilipinas (BSP) noted a significant improvement in the engagement of Filipinos in 
formal bank accounts which reflects a positive development in financial inclusion in 
the country's economy. The ownership of a formal account increased from 22.6% in 
2017 to 28.6% in 2019 which means that additional 5.1 million Filipinos opened an 
account within the said period. The most significant increase is recorded among e- 
money accounts which rose from 1.3% in 2017 to 8% in 2019.
However, the same report also revealed that there are still challenges in our 
efforts to fully achieve an inclusive financial industry, particularly in the banking sector. 
One is the significant gap in account penetration which is seen in socio-economic class 
and employment status. This means that those In the lowest economic class as well 
as those who are unemployed are still not yet involved in the formal banking sector. 
Some of their concerns are lack of money, perceived lack of need for an account, and 
lack of awareness on the basic deposit account (BDA) which Is designed to make 
banking simple and accessible. Because of these reasons, 51.2 million Filipino adults 
are still unbanked as of 2019.


The ''Bangkosa Baryo Act"seQVs to create an enabling regulatory environment 
for innovations and allow banks to be more accessible to the people, especially those 
who are in remote area. This will be done through establishment of cash agents under 
the regulation of the BSP particularly In low-income and rural areas.
To sustain the benefits of the proposed law, Investment incentives will be 
extended to cash agents and the local government units are mandate to support their 
operations.
In this light, the immediate passage of this bill is highly recommended.
JINGGOY EJERCJTO ESTRADA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
SENATE
471
of flip ;; f}-jj-p
’22 JUL 13 A10;18
Rb'CEfVEOSV;
S. No.
Introduced by SENATOR JINGGOY EJERCITO ESTRADA
AN ACT
ENABLING BANKS TO EXPAND SERVICE DELIVERY CHANNELS THROUGH 
CASH AGENTS AND PROVIDING GUIDELINES THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Tide. - This Act shall be known as the 'Bangko sa Baryo Act."
2 
Sec. 2. Declaration of Policy. - The State recognizes the vital role of banks In
3 
providing an environment conducive to the sustained development of the national
4 
economy. Towards this end, the State shall create an enabling regulatory environment
5 
for innovations and allow banks to exponentially expand reach through cash agents
6 
and serve a wider client base, particularly In the low-income and rural areas.
7 
Sec. 3. Definition of Terms. - As used in this Act:
8 
a) Cash Agent- refers to any person with a retail outlet such as but not limited
9 
to convenience stores, pharmacies, and other highly accessible retail outlets
10 
that deliver bank services provided in Section 7 of this Act;
11 
b) Contracting Bank- refers to any bank requesting authority from the Bangko
12 
Sentral ng Pilipinas (BSP) to expand service delivery channels through cash
13 
agents;
14 
c) Remote area - refers to an area that either is a long distance from highly
15 
population settlement or lacks transportation links that are typical in more
16 
populated areas duly-identified by the concerned Local Government Unit
17 
(LGU) In coordination with the BSP;


1 
d) Person - refers to a natural or juridical person.
2 
The Monetary Board may, by regulation, further define or clarify terms used in
3 
this Act consistent with the declared State policies above.
4 
Sec. 4. Eligibility Requirements for Cash Agents. - A Cash Agent may file an
5 
application with a Contracting Bank provided that the following requirements are met:
6 
a) It is a duly-registered business in the Philippines;
7 
b) It has engaged in commercial activity for at least three (3) months;
8 
c) It has conducted its commercial activities continuously in a place and area
9 
that is known to the public, and possesses sufficient capacity to properly
10 
operate electronic devices; and
11 
d) It has the necessary infrastructure to undertake banking operations.
12 
Sec. 5. Preliminary Screening. - Upon submission of the eligibility requirements
13 
for a Cash Agent, the Contracting Bank shall conduct a preliminary screening of the
14 
documents ensuring that:
15 
a) The result of the preliminary screening shall be released within five (5)
16 
working days;
17 
b) In case a Cash Agent fails the preliminary screening, the Contracting Bank
18 
shall return the documents and notify the Cash Agent of the grounds for
19 
failure. The Cash Agent may re-submit the documentary requirements
20 
within thirty (30) days from denial; and
21 
c) In case a Cash Agent passes the preliminary screening, the Contracting
22 
Bank shall forward the application to the BSP;
23 
Provided, That the Contracting Bank shall have an electronic banking solution
24 
to implement Its cash agent operations and comply with the requirements of Part
25 
Seven of the Manual of Regulations for Banks (MORB), on the Guidelines on Electronic
26 
Banking Services and Operations. The bank shall deploy to its cash agents a device
27 
through which its customers can perform secure online, real-time deposit and
28 
withdrawal transactions on their own bank account, fund transfers, bills payment, and
29 
self-service transactions: Provided further, That the Board of Directors of the
30 
Contracting Bank shall adopt clearly-defined written policies, procedures, and controls
31 
for its Cash Agent operations, including Cash Agent selection, exercise of due
32 
diligence, and customer care arrangements.


1 
Sec. 6. Evaluation Process. - The BSP shall create an online evaluation process
2 
for a Cash Agent application while ensuring that:
3 
a) Cash Agent demonstrates good reputation and credit history, has no
4 
previous civil and criminal record, and has 
a deposit account with the
5 
Contracting Bank against which ail bank transactions will be conducted;
6 
b) The result of the application shall be released within seven (7) working days
7 
upon the application by the Contracting Bank;
8 
c) In case an application shall be rejected, the applicant shall be given a
9 
registered, written notification that Indicates and explains the ground/s for
10 
rejection;
11 
d) In case an application shall be approved, BSP shall issue an Authority to
12 
Utilize As Cash Agent to Contracting Bank valid for two (2) years. The
13 
Authority to Utilize As Cash Agent shall be displayed conspicuously in the
14 
Cash Agent's retail outlet.
15 
Sec. 7. Revocation of Authorization. - The BSP shall revoke the Authority to
16 
Utilize as Cash Agent if a Cash Agent no longer meets the standards set to qualify for
17 
the requirements under this Act.
18 
Sec. 8. Bank Transactions and Services. - A duly-authorized Cash Agent may
19 
perform any or ail of the following bank transactions/sei'vices:
20 
a) Accept and disburse cash on the bank's behalf in connection with the
21 
following self-service transactions of customers:
22 
i) Deposit and withdrawal transaction performed by the customer on one's
23 
bank account;
24 
ii) Fund transfers performed by the customer;
25 
ili) Bills payment; and
26 
iv) Payments due to government Institutions, such as contributions to the
27 
Social Security System and premiums payable to the Philippine Health
28 
Insurance Corporation, Pag-IBIG, and others;
29 
b) Collect and forward applications for opening a savings account;
30 
c) Forward loan application documents to Contracting Bank;
31 
d) Perform Initial Customer Identity Verifications:


1 
i) Conduct customer due diligence (CDD) investigations in opening low
2 
transactional and low risk account or accounts subject to deposit and
3 
transactional limits;
4 
ii) Prevent anti-money laundering and countering financing of terrorism
5 
activities;
6 
e) Other transactions:
7 
i) Payment (including loan repayments) using credit and debit cards,
8 
checks, and cash;
9 
ii) Transfer between bank accounts including those to be remitted to other
10 
banks;
11 
ill) Balance Inquiries; and
12 
Iv) Check encashment.
13 
Sec. 9. Investment Incentives. - A Cash Agent that establishes operations in a
14 
remote area shall be entitled to the following incentives:
15 
a) Free training of Cash Agent personnel on various bank processes conducted
16 
by the BSP;
17 
b) Free training and capacity-building seminars conducted by the Department
18 
of Trade and Industry (DTI) and its attached agencies;
19 
c) Expedited processing of permits and certificates that are requisites to
20 
business registration and operation; and
21 
d) Expedited processing of local government permits and other related
22 
documents.
23 
The Department of Trade and Industry (DTI) shall require the Securities and
24 
Exchange Commission (SEC) and the local government unit (LCD) involved to create
25 
mechanism for expedited processing from application to approval.
26 
Sec. 10. Role of LGUs. - The concerned LCD shall encourage and provide
27 
incentives to a Cash Agent in relation to the purpose of this Act pursuant to Republic
28 
Act No. 7160, otherwise known as the Local Government Code of 1991.
29 
The concerned LGU shall conduct training programs in the barangay on
30 
financial literacy and capacity-building to increase understanding of different financial
31 
services and products.


1 
Sec. 11. Subcontracting Agents. - A Cash Agent cannot subcontract its
2 
operations or business to third parties.
3 
Sec. 12. Agent Exclusivity. - BSP may permit temporary agent exclusivity for a
4 
period not exceeding two (2) years. Otherwise, the Cash Agent shall enter Into an
5 
agreement with another Contracting Bank.
6 
Sec. 13. Fees. - A Cash Agent may set customer fees and charge customers
7 
directly: Provided, That the Contracting Bank and the Department of Trade and
8 
Industry shall monitor such pricing for signs of exploitation or customer confusion.
9 
Sec. 14. Principal Liability for Agents. - The Contracting Bank is liable for all
10 
actions and omissions of the Cash Agent, provided such act is within the bounds of
11 
the agency.
12 
The Contracting Bank shall exercise due diligence to ensure its Cash Agents
13 
comply with applicable rules, regulations, and policies on anti-money laundering,
14 
consumer protection, bank secrecy, and customer data confidentiality.
15 
Sec. 15. Transparency and Consumer Protection. - Banks shall ensure that
16 
customers are adequately informed and protected when transacting with their cash
17 
agents, and should provide mechanisms for their customers to verify accredited agents
18 
and to lodge complaints for agent-related transactions.
19 
In all advertising and marketing materials, terms and conditions on the use of
20 
agents, and other forms of communications. It must be clearly stated that the banking
21 
products and services are products and services of the bank.
22 
The bank shall publish on its website or In any available media platforms, an
23 
updated list of its accredited cash agents, including their complete registered business
24 
name, contact numbers, locations and authorized activities and services.
25 
The bank shall also establish mechanism for handling complaints on cash agent
26 
related transactions including the committed turn-around time to respond to its clients.
27 
Sec. 16. Implementing Rules and Regulations.- The BSP, in coordination with
28 
the Anti-Money Laundering Council, Insurance Commission, a representative from the
29 
Union of Local Authorities of the Philippines and the Dn, shall promulgate, not later
30 
than thirty (30) days upon the effectivity of this Act, the necessary rules and
31 
regulations for its effective implementation.


Sec. 17. Separability Clause. - If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision or part not otherwise 
affected shall remain valid and subsisting.
Sec. 18. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule, or regulation contrary to or 
inconsistent with the provisions of this Act are hereby repealed, modified, or amended 
accordingly.
Sec. 19. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.
Approvedf