Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE 
EXPLANATORY NOTE 
The Philippine government has made significant strides toward digital transformation, 
particularly in enhancing transparency, efficiency, and financial inclusion through electronic 
payments. Recognizing these advancements, the Bangko Sentral ng Pilipinas (BSP) has 
committed to shifting at least 50% of total retail transactions to digital and increasing financial 
account ownership among Filipino adults to 70% by 2023, as outlined in its Digital Payments 
Transformation Roadmap 2020–2023.1  According to BSP reports, the share of digital payment 
transactions in the country reached 52.8% in 2023, surpassing the target. Merchant payments 
accounted for the largest share of monthly digital payment volume, followed by person-to-
person transfers, and business-to-business supplier payments.2 This upward trend continued 
in 2024, with digital payments comprising 57.4% of transaction volume, exceeding the 
Philippine Development Plan 2023–2028 target of 52–54%.3 The BSP is targeting to achieve 
a 60-70% share of digital payments over the total retail payment volume by 2028. 
Despite encouraging developments, challenges remain in the adoption of digital 
payment systems across the country such as expanding access to reliable digital 
infrastructure, improving internet connectivity especially in remote areas, lowering the cost of 
digital payment fees, and promoting the widespread acceptance of digital payments.4 
To address these challenges, this legislative measure seeks to institutionalize and 
accelerate the use of safe, interoperable, and efficient digital payments in all financial 
transactions involving all national government agencies, government-owned or -controlled 
corporations, and local government units. Here are some of the key provisions of the proposed 
measure: 
•
It mandates the use of digital payment platforms for collecting taxes, fees, tolls,
imposts, other revenues, purchases, and public disbursements, as well as account-
based disbursements that credit government payments directly to recipients’ accounts.
•
It authorizes government entities implementing digital payments to establish technical
support units to coordinate with payment service providers, adopt and implement a
comprehensive incentive framework for financial transactions, and allocate funds to
cover compliance costs.
1 Trinidad, Chester Carlo. 11 November 2024. BSP promotes financial inclusion for vulnerable sectors through digitalization 
initiative. Philippine Information Agency (PIA). https://www.bworldonline.com/special-features/2023/07/03/531895/bsps-drive-
towards-digitalized-payments/ 
2 Bangko Sentral ng Pilipinas (BSP). 23 July 2024.  Philippines hits target of digitalizing 50 percent of retail payments. 
https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.aspx?ItemId=7182 
3 Business World Online. 8 July 2025. Digital payments post steady increase. https://www.bworldonline.com/top-
stories/2025/07/08/683728/digital-payments-post-steady-increase/ 
4 Business World Online. 30 October 2024. BSP sees some gaps in digital payment use. https://www.bworldonline.com/top-
stories/2024/10/30/631527/bsp-sees-some-gaps-in-digital-payment-use/ 
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•
It mandates the BSP to expedite adoption of the national QR code standard to enable
interoperable QR-based payments and remove the need for multiple merchant and
client accounts.
•
It mandates LGUs to enact ordinances requiring merchants to install a functional digital
payment system at their place of business and to extend assistance to small and micro-
merchants to facilitate their adoption of digital transaction capability.
•
It empowers the BSP, the Department of Trade and Industry, the Department of the
Interior and Local Government, and the Department of Information and
Communications Technology (DICT) to implement capacity-building initiatives.
•
It directs the Department of Science and Technology and the DICT to improve access
to and affordability of digital infrastructure, which are both crucial for the long-term
sustainability of a fully digitized financial ecosystem.
The measure builds upon the legal framework established by Republic Act No. 11127,
or the “National Payment Systems Act,” which provides the BSP with the authority to supervise 
and regulate payment systems in the country. It also aligns with RA No. 11032, or the “Ease 
of Doing Business and Efficient Government Service Delivery Act of 2018” by streamlining 
government services and expanding access to digital financial tools. 
By accelerating the adoption of digital payments, this measure aims to enhance fiscal 
transparency, reduce transaction costs, broaden financial inclusion, and strengthen the digital 
economy, thereby ensuring that technological innovations serve not only the economy but also 
the everyday needs of Filipino citizens. 
In view of the foregoing, the immediate passage of this measure is earnestly sought. 
HON. MIGUEL LUIS R. VILLAFUERTE 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE 
AN ACT PROMOTING THE ADOPTION OF DIGITAL PAYMENTS FOR FINANCIAL 
TRANSACTIONS OF THE GOVERNMENT AND ALL MERCHANTS 
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 and cited as the "Promotion of Digital 
Payments Act." 
SECTION 2. Declaration of Policy. —  The State recognizes the vital role of information and 
communications technology in 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, optimize the use of 
technology and innovative payment systems for financial transactions, and promote the 
electronic conveyance of payment for various transactions with the government, to and among 
business entities and merchants, and among the general public. 
SECTION 3. Objective. —  This Act aims to facilitate transactions, arrangements, or 
exchanges of goods and services by promoting the universal use of safe and efficient digital 
payments 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;
(b) Digital Payments refers to the monetary payment transaction between two parties
through a digital payment instrument in which both the payer and the payee use an
electronic channel;
(c) Merchant refers to a person or entity engaged in buying and selling merchandise,
purchasing goods and services, skills, or expertise, and leasing of goods and services.
It also includes credit-granting entities, lending institutions, pawnshops, remittance
companies and other money service business, except financial institutions supervised
by the Bangko Sentral ng Pilipinas (BSP), which shall be governed by specific BSP
regulations and requirements on digital services;
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(d) Payment system refers to the set of payment instruments, processes, procedures and 
participants that ensures the circulation of money or movement of funds which comply 
with the requirements set forth under Republic Act No. 11127, otherwise known as “The 
National Payment Systems Act”; and 
 
(e) Payment service providers (PSP) refers to an entity that provides payment services to 
end-users, such as consumers, merchants, and billers, including government 
institutions. 
 
SECTION 5. Use of Digital Payments. —  All national government agencies (NGAs), 
government-owned or -controlled corporations (GOCCs), and local government units (LGUs) 
are hereby mandated to utilize safe and efficient electronic or digital means of receiving 
payment for taxes, fees, tolls, imposts, and  other  revenues  and  for  the  payment  of  goods,  
services,  and  other disbursements. To this end, government entities may be allowed to 
include in their respective budgets the amounts that will cover the cost of establishing and 
maintaining the infrastructure, system and process adjustments as well as transaction fees 
that they may shoulder in connection with the implementation of digital payments, including 
merchant discount rate, processing fees, cash out fees, administration fees: Provided, That 
the release of said budget may be conditioned on the actual adoption of digital payments by 
the concerned government entities. 
 
 
To facilitate compliance with this Act, NGAs, GOCCs, and LGUs shall adopt account-
based disbursements whereby target recipients directly receive government payments into 
their transaction accounts. These government entities may create their respective digital 
payment technical support and maintenance service units which shall be responsible for 
troubleshooting and maintaining coordination with the PSP partner for technical and other 
concerns within the agency. They shall also be responsible for ensuring the proper transition 
of their respective agency’s payments and disbursement procedures and policies to digital 
payments. The creation of the technical support and maintenance service units shall be 
without prejudice to any technical support arrangement between the agency and the PSP 
partner pursuant to a contract or agreement: Provided, That, the contract or agreement shall 
be subject to the applicable regulations of the BSP. 
 
 
The BSP shall accelerate the adoption by all PSPs of the national quick response (QR) 
code standard  to  hasten  the  interoperability  of  QR-driven payment services and eliminate 
the need for merchants and clients to maintain several accounts. 
 
 
The Government Procurement Policy Board shall, in coordination with the BSP, issue 
guidelines to be observed when procuring the services of a PSP that provide digital payment: 
Provided, That, government entities shall avail only of interoperable digital payment solutions. 
 
 
Notwithstanding any law to the contrary, a partner PSP of a government entity shall 
not be limited to government financial institutions. 
 
SECTION 6. Digital Payment Capability of Merchants. —  To accelerate the adoption of 
digital payment, LGUs shall, by ordinance, require merchants within their localities to establish 
or outsource arrangements or mechanisms that would enable them to receive payments from 
clients and make payments to creditors and suppliers in digital form 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 
digital payment system accessible by mobile phone or other access devices is installed or 
provided by a duly registered PSP in the merchant partner’s place of business. 
 
 
The LGUs shall ensure that merchants in their jurisdictions have access to appropriate 
digital payment solutions and have the capacity to effectively use the same, with due 


consideration to small and micro-merchants, including market vendors, tricycle operators and 
food stalls. The LGU shall extend assistance to small and micro-merchants to facilitate their 
adoption of digital transaction capability. The BSP, Department of Trade and Industry (DTI), 
Department of Interior and Local Government (DILG), and the Department of Information and 
Communications Technology (DICT) shall also facilitate measures to provide capacity building 
for the NGAs, GOCCs, LGUs, and merchants on the use of digital payments. 
 
SECTION 7. Promotion of Digital Payment 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 safe and efficient digital payment in their financial 
transactions. 
 
 
The NGAs, GOCCs, and LGUs shall also explore the feasibility of adopting a 
comprehensive incentive framework for selected financial transactions to encourage the 
availment of digital payments. Moreover, LGUs may impose reduced fees or grant other 
incentives for merchants providing efficient digital payment systems. 
 
 
The BSP shall, in coordination with relevant stakeholders, promote measures on 
financial and digital literacy, and consumer protection to strengthen the public’s trust in digital 
payment transactions. 
 
 
The Department of Science and Technology  and  the  DICT  shall implement measures 
to further enhance the availability and cost of internet connection  to  support  the  
government’s  program  on  the  digitalization  of financial transactions. 
 
SECTION 8. Implementing Rules and Regulations. —  The BSP shall, in coordination with 
the Department of Budget and Management, DTI, DICT, and DILG, promulgate the rules and 
regulations implementing the provisions of this Act within ninety (90) days from its effectivity. 
 
SECTION 9. 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 10. 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. 
 
SECTION 11. Effectivity. —  This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of national circulation. 
 
 
Approved,