OUi). -’• .■v'i-<i>'P
NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
72 JUL19 P 6 33
lUXclV'OL;
SEN AJ JE
L B. NO. 762
Introduced by Senator SONNY ANGARA
AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
With the launch of mobile money in 2001, the Philippines became one of the 
first countries to pioneer digital payments. Despite tnis development, the Philippines 
still had one of the highest percentages of people in Southeast Asia who were 
unbanked, who mostly transacted In cash, and who effectively remained disconnected 
from the formal financial system.
This started to change as the COVID-19 pandemic unfolded. Many Filipinos 
started transitioning to digital modes of payment such as with mobile wallets like 
GCash and what was then known as Paymaya. Given curbs to mobility, health 
protocols, and social distancing measures, it became more convenient (and 
preferential) to transact online or via smartphone applications. By the end of 2020, 
digital payments constituted a little more than 20 percent of total financiei transactions 
in the Philippines, up from 14 percent inf 2019 and 1 percent in 2013.
Recognizing this momentum towards a cashless society, we filed during the 
previous 18th Congress an earlier version of this Use of Digital Payments Act in 
collaboration with then Rep. Jose Enrique "Joet" S. Garcia III of the 2nd District of 
Bataan Province. By providing an enabling environment to accelerate the adoption of 
digital payments, the measure was envisioned to serve as an impetus for a more


widespread shift to digital and cashless payments, thereby reaping much more fully 
the benefits of digitization.
Some of these benefits include more cost savings and more widespread uptake 
of formal transaction accounts. For instance, as argued by the Better Than Cash 
Alliance in 2019, fully digitizing social payments could save the government up to 
US$100 million annually and could result in 11 million additional accounts registered 
with the formal banking sector. Business could also save US$20 to US$45 billion 
annually by digitizing supplier payments alone.
The Use of Digital Payments Act was initially heard by a sub-committee which 
we headed, under the Senate Cor-^.mittee on Banks and Financial Institi.’tions. Several 
meetings were then conducted by a technical working group constituted by 
stakeholders from both the public and private sector. Then on May 2022, President 
Roa Duterte issued Executive Order No. 170 on May 2022, mandating all government 
agencies and instrumentalities to utilize digital modes of payment for both 
disbursements and collections.
Before the 18th Congress formally adjourned sine die, the sub-committee then 
filed a committee report that aligned closely with EO No. 170. Building on the 
provisions inspired by the executive order, the committee report also mandated the 
establishment of a governr^ent payment gateway to promote more efficient, effective, 
and affordable transactions with government agencies. It also called for a multi-year 
roadmap for digital payment adoption across the government, as well as enabled local 
government units (LGUs) to, by ordinance, encourage and grant monetary and non­
monetary incentives for merchants within their localities to use digital modes of 
payment. These same provisions and more are included in the foregoing measure.
Hopefully, with the election of a new administration, the Philippines' journey 
toward becoming a cash-lite economy would continue, and reach even more 
touchstones. In view of the foregoing, the passage of this bill is earnestly sought.
SONNY ANGARA
r


(CP of 
ri>
NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
■22 JUL19 P6 33
fcct:'
SENATE
!. B. No. 7G2
Introduced by Senator SONNY ANGARA
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AN ACT
PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title. - This Act shall be known as the "Use of Digital 
Payments Act"
SEC. 2. Declaration of Policy. - The State recognizes the vital role of 
information and communications technology particularly financial technology, towards 
financial ind ision advancement and nation-building. The State also 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 financial inclusion 
through the use of safe, secure, and efficient digital payments. In various transactions 
of the government and the public—particularly for payments to government, and 
government disbursements to the public, which includes but is not limitec to payments 
to or by private institutions, merchants, and beneficiaries, the state shall 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 
facilitate the adoption of dioital payments in a technology-neutral manner, where one 
technology is not unreasonably favored or given undue advantage over another.
SEC. 3. Objective. — This Act aims to facilitate transactions, arrangements, 
or exchanges of goods and services by promoting the universal use of safe, affordable.


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and efficient digital payments in financial transactions of the government and the 
general public.
SEC. 4. Definition of Terms. - As used in this Act, the following terms shall
mean:
i. "Access device''refers to any card, plate, code, account number, electronic 
serial number, personal identification number, mobile device, or 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 value, or to initiate 
a ti ansfer of funds in electronic form;
ii. 'Account-based disbursement"refers to the disbursement of 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 rSuperv'ised entity as chosen and specified by the intended 
recipient;
iii. "Basic deposit account (BDA)"refers to the deposit product offered by banks 
as defined under the BSP Manual of Regulations for Banks and its 
implementing guidelines;
iv. "Diiitai collection" refers to a mode of payment wherein businesses and 
citizens make payments to the government, including but not limited to 
taxes, fees, and tolls, using a digital device such as mobile phone, point of 
sale, or computer. Payments can be made with bank transfers, electronic 
money, and payment cards including credit debit, prepaid, or stored-value 
cards, ainong others;
V. "Digital disbursement"refers to a mode of payment whereby disbursement 
of money or equivalent electronic representations of legal tender, for 
purposes of paying government expenditures, is made by crediting the target 
recipient's transaction account through ad/ice tc debit or electronic fund 
transfer facilitated by any government agency or instrumentality through 
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 the 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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traiisaction accounts in the same or different BSP-supervised financial
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Institutions which are Initiated and received using electronic devices and
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channels to transmit payment instructions;
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viii. "Electronic money fe-money)"refers to electronically-stored monetary value
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which is issued Iri 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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lx. "Financial inclusion ''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 Sen/icing Payment Service Provider (PSP)" refers to bank and
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non-bank PSPs auchorized 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 defined by Department of Finance
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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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ana secure the confidentiality, integrity, availability, authenticity, and non-
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repudiation of information and the data 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 buying and selling
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merchandise, purcnasing of services, skills, or expertise, and leasing 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 end-users,
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such as consumers, merchants, and billers, including 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 the requirements set forth under
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Reoublic Act No. 11127 or the National Pay ment Svstem 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 institution that can
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be used to store, send, and receive funds.
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SEC. 5. Adoption of Digital Payments for Go vernment Disbursements.
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—Ail government entities, includi ig but not limited lo national government agencies
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(NGAs), foreign-based government agencies, all government corporations, local
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government units (LCDs), State Universities and Colleges (SUCs), and local universities
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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, allowances, 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 finarciai institutions. For this purpose,
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said government entities may use the automatic debit 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 t' le recipient's or beneficiar/'s identity. Uses of government
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funds through direct crediting shall remain transparent to state auditors.
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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 authorization in
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accordance with established accounting and auditing rules and regulations.
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The government servicing PSP shall carry out the payment instruction and
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submit the verified list of successful and failed fund transfers and other relevant details
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to the government entity disbursing the fund. Subject to agreement with the


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government entity, the government servicing PSP may collect fees from the 
government entity for the electronic fund transfer services.
In case of unsuccessful digital disbursement, there shall be 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 channels may be explored.
SEC. 6. Adoption of Digital Payments for Government Collections. - All 
government entities, including but not limited to national government agencies 
(NGAs), foreign based government agencies, all government corporations, local 
government units (LGUs), 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 government 
entities may engage the services of established PSPs: Provided, That government 
entities shall avail only of interoperable digital payment solutions. Notwithstanding any 
law to the contrary, pariner PSP of a government entity shall not be limited to 
government servicing banks.
SEC. 7. Adoption of Interoperable Digital Payment Solutions. - The
BSP shall implement initiatives that aim to accelerate the adoption by all PSPs of 
interoperable digital payment technologies and appropriate standards thereof, such 
as but not limited to the National Quick Response (QR) Code Standard meant to hasten 
the interoperability of QR-driven payment services and eliminate the need for 
merchants and clients to maintain several accounts.
In addition, NGAs, government corporations, SUCs, LGUs and merchants shall 
undertake measures to p. omote the adoption of the Open Finance Framework in 
accordance with the guidelines set forth under the applicable BSP rules and regulations 
which will enable sharing of customer-permissioned financial data and foster 
adherence to data security and privacy standards.
The digital payment solutions adopted by government entities shall allow for 
real-time receipt of funds by the ecipient 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 the objectives of this Act. To ensure
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that these digital payment solutions adhere to applicable international standards on
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information security, data privacy, and electronic data interchange between 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 Framework.
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Existing agreements between government entities and PSPs shall 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 implement amendments
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to such agreements with intention to remove provisions detrimental to public 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 disadvantageous to the
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government, shall be discontinued.
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There shall be a technical working group (TWG) composed of the 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 Revenue (BIR), the
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Government Procurement Policy Board, and other relevant agencies that will provide
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guidance ar,d promote cost-effiaency and transparency in procuremient of digital
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payment solutions by government entities. Consistent with the respective mandates
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of the member-agencies, and in coordination with the COA, the TWG shall have the
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following powers and functions:
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a) Oversee and monitor the procurement of digital payment solutions by
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government entities and ensure that the same is in accordance with existing
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laws, rules and regulations;
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b) Consider the formulation of standard terms and conditions 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 engagement 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 resolving 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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efrective implementation of this Act;, and.


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e) Perform such other function pursuant to the fulfillment of the objectives of
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this Act.
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SEC. 8. Establishment of a Government Payment Gateway. - The BSP,
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in consultation with the DOF, DBM, COA, Department of Information and
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Communications Technology (DICT), BIR, BUREAU OF CUSTOMS (BOC), 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 establishment of a
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government payment gateway through which ail government entities may process
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digital payments made to them through PSPs, websites, mobile phone applications, 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 to payors, regular audit reports,
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interoperability between digital payment technologies, and other technical features
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that will aid in the fulfillment of the objectives of this Act. Said gateway shall adhere
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to relevant international standards on information security, data privacy, 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 creaitors and supplier-' using digital
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channels.
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LGUs shall ensure that merchants in their jurisdictions have access to appropriate
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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, tric/cle operators and food stalls. The LGU shall extend assistance to small
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and micro merchants to facilitate their adoption of digital transaction capability. The
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BSP, Department of Trade and Industry (DTI), DILG, AND DICT shall provide capacity
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building for the NGAs, government corporations, SUCs, LGUs, and merchants on the
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use of digital payments.


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SEC. 10. Promotion of Digital Payment Transactions. — To optimize the
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benefits of digital payments, scale up financial inclusion, and promote sustainability,
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ail government entities shall prioritize the use of safe and efficient digital payment 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 the use of digital
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payments. LGUs shall, likewise, grant relevant incentives for merchants providing
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efficient digi .al 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 the public's trust
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in digital payment transactions.
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To enable the general public to adopt digital payments, micro-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 payment system
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management body.
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The DICT snail implement measures to fuither enhance the availability,
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accessibility, reliability, and cost-efficiency of Internet services to support the
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Government's program on the digitalization of financial transactions.
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SEC. 11. Muiti- Year Roadmap for Digital Payment Adoption - The BSP, in
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collaboration with relevant government entities, shall prepare and regularly update a
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multi-year roadmap on aigital payments to ensure the timely implementation and
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optimal realization of the objectives of this Act.
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This Multi-year Roadmap shall be aligned with the e-government masterplan
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formulated by the DICT in consultation with other key government agencies, and shall,
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among others, set targets and outcomes, such as but not limited to the widespread
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adoption of digital payments by merchants, for a minimum period of five (5) years,
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and include strategic public and private interventions and possible government
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programs and projects. The roadmap shall be subject to annual review.
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SEC. 12. Transitory Provision. - Government entities shall be responsible for
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ensuring prcper transition of the:r respective agency's di:Dbursement and collection
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procedures and policies to digital payments.


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Digital disbursement shall be implemented within six (6) months from the issuance
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of the implementing rules and regulations (IRR) of this Act.
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For the implementation of digital collections, a tiered transition period not
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exceeding three (3) years from the issuance of the IRR shall apply. The tiering
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guidelines, to be established by the TWG as part of the IRR, shall reflect differentiated
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transition timeframes based on the readiness and capability of the government
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entities. Government entities deemed capable and ready based on defined criteria
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shall be required to implement digital collection within a shorter transition period while
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others may be allowed a longer transition period but not to exceed three (3) years.
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SEC. 13. Information Security and Data Privacy, - All data information and
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information and communications technology systems and networks, used for digital
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payments p jrsuant to the objecti'/es of this Act shall be secured and protected at all
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times. The DICT and the National Privacy Commission shall, in consultation with the
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BSP, define and prescribe the minimum information security standards for compliance
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of PSPs who are covered by this Act and are not under the oversight and regulatory
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authority of the BSP.
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SEC. 14. Obiigations of Payment Systems Providers. - In line with the
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declared policy in this Act, all PSPs shall have the following obligations:
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a) Integrate security and data privacy by design and by default in the development
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stage of the payment systems;
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b) Process personal and sensitive personal information in the system in
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accordance with any of the criteria for lawful processing provided for under
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relevant laws, rules and regulations;
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c) Implement reasonable and appropriate organizational, physical, and technical
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security measures for the protection of personal data and uphold the rights of
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data subjects;
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d) Provide reasonable and timely assistance to NGAs, government corporations,
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LGUs, SUCs, and/or merchants, in accordance with relevant rules and
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regulations, to enable them to respond to a request from clients to exercise
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any of their rights and any other correspondence, inquiry or complaint received
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from a client or other third party in connection with the processing of the
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personal data in the payment system;


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e) The PSP performing the function of collection of money and/or payment of
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transaction on behalf of the government agency shall, to the extent necessary,
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cooperate with the COA for the examination, audit, and settlement of all
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accounts pertaining to the revenue and receipts, and expenditures or uses of
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funds of all NGAs, government corporations, SUCs, and LGUs. The PSP shall
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allow COA to perform its audit procedures and to determine whether collections
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are complete and use of fi'nds are authorized;
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f) Comply with the requirements indicated in the standard terms of reference or
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standard minimum terms and conditions that may be issued by the TWG.
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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 v/illfully violates this Act, rule or
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regulation, directives or orders duly promulgated by the BSP pursuant hereto, the
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person or persons responsible for such violation shall be punished by a fine of 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 than 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 accounts pertaining to
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the revenue and receipts of, and expenditures or uses of funds and property, 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-audit 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 allowed to include in
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their respective budgets amounts that will cover the reasonable costs of establishing
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and maintaining the infrastructure, system and/or processes adjustments as well as
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transaction fees that they may shoulder in connection with the implementation of
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digital payments, includinc but not limited to, merchant disc ount 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 
government entities.
Government entities may also top-up cash assistance with a standard amount to 
cover any transaction fees that may be incurred by recipients or beneficiaries when 
claiming or withdrawing said cash assistance from their respective transaction 
accounts.
The amo int necessary for the implementation of the provisions of this Act shall be 
taken from the current year's budgets of the NGAs, government corporations, SUCs 
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.
SEC. 18. Implementing Rules and Regulations. - The BSP, in coordination 
with the DBM, COA, DOF, BTR, BIR, DICT, DOST, DILG, DTI, and other relevant 
agencies, shall promulgate the rules and regulations implementing the provisions of 
this Act within ninety (90) days from its effectivity.
SEC. 19.. 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.
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 or in a newspaper of national circulation.
Approved,
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