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

EIGHTEENTH CONGRESS
Second Regular Session

House Bit no, 7130

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Introduced by ANG PROBINSYANO
Party-List Representative Alfred Delos Santos

EXPLANATORY NOTE

With the onset and progress of technology, it is inevitable that there is a
surge of contactless electronic transactions in the financial market. In addition,
the threat of COVID-19 has made it necessary for several establishments to
adopt electronic transactions in payment and delivery since it reduces the risk
of transmission of the virus.

In a study! conducted by Visa Philippines, it was shown that seven (7) out
of ten (10) Filipinos are “already using contactless payment methods more often
than they did two years ago. Three (3) out of four (4) Filipinos have experienced
going cashless ang relied mainly on electronic transactions. E-commerce has
also taken over twenty-five percent (25%) of all transactions in the country, fifty
percent (50%) of which are cashless. Only one (1) out of three (3) are done by
cash-on-delivery. Filipinos mostly use cashless payments when paying for
utilities, and forty-nine percent (49%) of those surveyed preferred using cashless
transactions for their grocery shopping and forty-five (45%) preferred the same
for fast food. In addition, cashless transactions have contributed a lot to the ease
of doing business, and in giving the consumers options in the means and
methods of spending their money.

With the inevitability that comes with this development is the need to pass
legislation to keep up with the times and ensure that Philippine society is fully
equipped to support electronic transactions. Safeguards must be put in place in
order to protect our populace from the risks involved, and guidelines must be
set so that this technology may be further maximized. It is with this legislation
that public health guidelines on COVID-19 may also be maintained by
minimizing contact between people involved in the transaction. With this policy,
the government will actually be hitting two birds with one stone—ensuring

* https://business.inquirer.net/296510/visa-philippines-study-shows-filipinos-are-ready-to-go-cashless

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minimal contact in light of the pandemic and making proper preparation and
adaptation with the evolution of technology and convenience.

It is for the foregoing premises that the approval of this Bill is earnestly

sought.

ALFRED C. DELOS SANTOS
Representative, Ang Probinsyano Party-List


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

EIGHTEENTH CONGRESS
Second Regular Session

House Bit no. 7130

Introduced by ANG PROBINSYANO
Party-List Representative Alfred Delos Santos

AN ACT
PROMOTING THE ADOPTION OF ELECTRONIC MONEY AS A MEDIUM OF
EXCHANGE FOR FINANCIAL TRANSACTIONS OF THE GOVERNMENT AND ALL
MERCHANTS AND FOR OTHER PURPOSES

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 “E-Money Act of 2020.”

SECTION 2. Declaration of Policy. - It is hereby declared as a policy of the State to
recognize the vital role of communication and information in nation-building. The State
also recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments. With this, the State
recognizes the need of promoting ease of doing business and efficient delivery of goods
and services to the general public. Towards this end, the State shall promote the use of
electronic money or e-money as a medium of exchange to optimize the use of technology
and innovative payment system for financial transactions and to strengthen financial
inclusion.

SECTION 3. Objective. - This Act aims to speed up and facilitate a more efficient
mode of transactions, arrangements, or exchanges of goods and services by promoting
the enhanced and strengthened use of e-money as a medium of exchange and legal
tender in financial transactions of the government and the general public.

SECTION 4. Definition of Terms. - As used in this Act, the following terms shall
mean:

(a) “Access device” refers to any card, plate, code, account number, electronic
serial number, personal identification number, or other telecommunications
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 value or to initiate a transfer of funds (other than a transfer originated solely
by paper instrument);


1 (b) “Consume?” refers to a natural or juridical person who is a purchaser, lessce,
2 recipient, or prospective purchaser, lessor, or recipient of consumer products,
3 services, credit, technology, advertising, or promotion, and other items in
4 eCommerce;
5
6 (c) “Electronic commerce” or “eCommerce” refers to the production, distribution,
7 marketing, sale, or delivery of goods and services by electronic means;
8
9 (d) “Electronic money” or “e-money” shall refer to monetary value as represented
10 by a claim on its issuer, that is (1) electronically stored in an instrument or
ete device; (2) issued against receipt of funds of an amount not lesser in value
R than the monetary value issued; (3) accepted as a means of payment by
3B persons or entities other than the issuer; (4) withdrawable in case or cash
14 equivalent; and (5) issued in accordance with relevant Bangko Sentral ng
15 Pilipinas (BSP) regulations;
16
v7 (e) “Electronic money issuer’ or “EMI” refers to any entity authorized by the BSP
18 under Subsection X780.2 of MORB which provides money transfer or
19 remittance services using electronic stored money value system and similar
20 digital financial services;
21
2 () “Merchant” refers to a person or entity engaged in buying and selling
23 merchandise at a fixed place of business;
24
25 (g) “Online merchant’ refers to any natural or juridical person, irrespective of
26 whether privately or publicly owned, that directly sells, manufactures goods,
27 or offers for sale, any goods and services, in the ordinary course of business
28 over the internet, through a website, an online marketplace, a social media
29 website, or application, or through other similar means;
30
31 (h) “Online eCommerce Platform” refers to a natural or juridical person that
32 solicits the purchase of digital products through digital platforms and
33 marketplaces whose business is to connect online buyers and online sellers,
34 facilitating sales of products, goods, or services through the internet with the
35, presence and use of monetary transaction;
36
37 (i) “Payment system” refers to the set of payment instruments, processes,
38 procedures, and participants that ensured the circulation of money or
39 movement of funds.
40
a SECTION 5. Scope and Coverage. - This Act applies to the sale or exchange of

42. goods, products and services, whether physical or digital, including, but not limited to:

a4 (a) Retail of consumer goods;

45

46 (b) Travel services, covering the purchase of flights, hotel accommodations, and
a7 vacation rental spaces;

48

49 (c) Digital media providers, including advertising, gaming, music subscription,

50 and video on demand;


(d) Ride hailing services for personal transport, delivery of food and merchandise;
and

{e) Financial services offered through both physical and online platforms, such
as payments, remittances, lending, investment, and insurance services.

SECTION 6. Use of E-Money. - All national government agencies (NGAs),
government-owned and controlled corporations (GOCCs), and local government units
(LGUs) are hereby mandated to utilize and strengthen the use of e-money among the
medium of exchanges in the collection of taxes, fees, tolls, imposts, and other revenues
and in the payment of goods, services, and other disbursements, among others. For this
purpose, the NGAs, GOCCs, and LGUs are hereby authorized and highly encouraged to
partner with any duly authorized e-money issuer (EMI) to enable them to facilitate
cashless electronic transactions.

To ensure the efficient, sustainable, and continued use of the e-money payment
system, NGAs, GOCCs, and LGUs are mandated to create their respective e-money
technical support and maintenance service. The support service shall be responsible for
all technical troubleshooting and maintenance, in coordination with the EMI partner for
technical and other concerns within the agency. The creation of the technical support
and maintenance service shall be without prejudice to any technical support
arrangement between the agency and the EMI partner pursuant to a contract or
arrangement.

The selection of an EMI partner shall not be subject to the rules of procurement
prescribed under Republic Act No. 9184: Provided, That only EMIs duly authorized by
the BSP and accredited by the Department of Budget and Management (DBM),
Department of Information and Communications Technology (DICT) and Department of
Interior and Local Government (DILG) may be engaged by agencies to service their e-
money transactions.

The Congress shall jointly, as House of Representatives and the Senate, accredit
EMIs based on technical capability, financial resources, network coverage, adequacy of
merchant partners, and such other factors as they may deem appropriate and decisive
in determining the overall capability of EMIs to provide the service. Since these factors
may vary depending on the area serviced, the accreditation of EMIs may be grouped by
region or such other geographical consideration as the Congress may consider
appropriate and sustainable. The Congress shall promulgate the list of accredited EMIs.
simultaneous with the promulgation of the rules and regulations implementing the
provisions of this Act. The list of accredited EMIs may be revised, supplemented, or
reduced regularly as the concerned agencies may deem necessary.

SECTION 7. E-Money Capability of Merchants .- LGUs shall, by ordinance, require
merchants within their jurisdiction to obtain and maintain an e-money payment system
capability in carrying on their businesses as a pre-requisite for the approval or renewal
of their business permits. No new or renewal of business permit shall be approved
unless the merchant concerned show to the satisfaction of the LGU that a functional e-
money payment system accessible by mobile phone or other access devices is installed
or provided by a duly registered EMI in the merchant partner’s place of business.


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‘The LGUs shall extend the necessary assistance and support to the merchants
within their jurisdiction to facilitate their adoption of e-money transaction capability.

SECTION 7. Promotion of E-Money Transactions. -To optimize the benefits of this
technological innovation, scale up financial inclusion, and promote sustainability,
NGAs, GOCCs, and LGUs shall prioritize the use of e-money as the medium of exchange
in their financial transactions.

NGAs, GOCCs, and LGUs shall also explore the feasibility of prescribing
discounted rates for selected financial transactions to encourage the availment of e-
money payments. LGUs may, likewise, imposed reduced fees or grant other incentives
for merchants providing efficient e-money payment system.

SECTION 8. Security Provisions. - All concerned agencies will hereby establish the
necessary security features and guidelines as may be needed to prevent phishing and
digital fraud. The right to privacy of the consumer shall be of utmost importance.

The LGAs, GOCCs, and LGUs shall periodically report to the DICT as regards
their compliance to the required security features and those added security features
that they have adopted over time. In addition, the compliance of merchants under the
jurisdiction of a specific LGU shall also be the subject of this report, and will be included
in the periodical report of the LGU to the DICT.

‘SECTION 9. Joint and Solidary Liability. - EMI shall share solidary liability with
an merchant, whether physical or online, under the following circumstances:

(a) If the merchant or EMI fails to exercise extraordinary diligence to prevent any
loss or damage to the consumer;

(b) If the identity of the merchant and the EMI is the same;

(c) If the merchant knows or should have known that the digital products sold to
not comply with law, or otherwise infringes on intellectual property rights,
and fails to take necessary measures;

(d) If the merchant or EMI fails to publish details of its merchant;

(c) If the merchant fails to examine its products related to food, drugs, and
cosmetics, or otherwise relates to the life or health of consumers;

(9 If merchant is not duly registered with the appropriate regulatory agencies;

SECTION 10. Digital Payments. - The merchants and EMIs shall, issue paper or
electronic invoices or receipts for all sales. An electronic invoice or receipt shall have the
same legal effect as a physical invoice or receipt.

Within sixty (60) days from the effectivity of this Act, the Bureau of Internal
Revenue shall, in coordination with the Bureau of Customs, issue rules and regulations
that modemize and streamline the regulatory framework and encourage the adoption of


electronic payment systems by the citizenry. The Department of Trade and Industry and
the Bangko Sentral ng Pilipinas shall also develop guidelines to protect merchants and
consumers covering the various digital payment solutions.

SECTION 11. Appropriation. - The amount necessary for the implementation of
the provisions of this Act shall be taken from the current year’s budgets of the NGAs,
GOCCs, and LGUs. Thereafter, such sums as may be necessary for the 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

SECTION 12. Implementing Rules and Regulations. - The DBM, DICT, and DILG
shall promulgate the rules and regulations implementing the provisions of this Act
within ninety (90) days from its effectivity.

SECTION 13. Separability Clause. - If for any reason, any part or provision of this
Act is declared invalid or unconstitutional, the remaining parts or provisions not affected
shall remain in full force and effect

SECTION 14. 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 15. 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,