Friday, May 31, 2024

Gov’t to launch digital-only OFBank in June, e-invoicing project in Q3

The Department of Finance (DOF) announced on Friday, May 22, that it will launch this year two digital-based programs aimed at improving tax compliance and expanding financial inclusion, especially among Filipino migrant workers.

DOF secretary Carlos Dominguez III said one of these initiatives — the Electronic Receipt and Invoicing, and Electronic Sales Reporting System or E-Invoicing — will be possibly launched by the third quarter of this year to provide better and faster services to taxpayers.

Aside from the e-invoicing system, Dominguez said the Land Bank of the Philippines has also made good on its commitment to him to have the country’s first Filipino-owned digital-only, branchless bank up and running by the end of June this year.

“The biggest (digitalization) program we’re working on now is e-invoicing. Once we get that e-invoicing program set up, that will mean a big step in e-governance already,” said Dominguez during a recent online hearing of the economic stimulus cluster of the Defeat Covid-19 Committee (DCC) of the House of Representatives.

“We have been working on that for the last year or so, and we should come to a conclusion, a good program by the middle of, or maybe the third quarter of this year,” he added.

His statement was in response to a recommendation by House deputy speaker Luis Raymund Villafuerte during the online DCC hearing for the government to strengthen and expand its digital-based programs for frontline services.

The Overseas Filipino (OF) Bank, which will primarily benefit the country’s migrant workers, will utilize digital technology and smartphone apps to provide banking and other financial services, Dominguez said.

“We set up this OFBank a couple of years ago. We’ve had problems with the technology but I think with Cecile’s leadership, we are almost ready to launch,” Dominguez said during the DCC meeting, referring to Landbank president and CEO Cecilia Borromeo.

Borromeo confirmed this during the DCC meeting, and thanked the Bangko Sentral ng Pilipinas (BSP) for clearing the way to the remote opening of accounts in the OFBank.

“So we are on our way, Secretary Dominguez, to making OF Bank a fully digital bank by end of June as promised to you,” Borromeo said.

Borromeo earlier reported to Dominguez that the BSP already granted last Jan. 30 a “No Objection” Clearance to the OF Bank on its use and implementation of a Digital Onboarding System (DOBS) with artificial intelligence (AI) facilitating an electronic Know-Your-Customer (KYC) process.

A joint initiative of the DOF under Dominguez and the Landbank, the OFBank is the fulfillment of a 2016 presidential campaign promise of then-Davao City mayor Rodrigo Duterte to overseas Filipino workers (OFWs) to put up their own bank when he becomes president.

In September 2017, Duterte signed Executive Order (EO) No. 44 authorizing Landbank to acquire the Philippine Postal Savings Bank (Postbank) so it could be converted into the OFBank. The OFBank is classified as a savings bank of Landbank.

Borromeo said that overseas Filipinos with Postbank accounts who migrated to OFBank were issued EMV-enabled Visa debit cards they could use for ATM withdrawals, fund transfers, bills payments and online purchases, among others.

Dominguez has envisioned the OFBank to be a digital-only facility to make it easy for overseas Filipinos to access a wide array of financial and investment products.

Through the OFBank, overseas Filipinos would be able to invest in their own country that they have helped transform into one of the fastest-growing economies in the region, Dominguez said, adding the OFBank could be the ideal vehicle for the Philippines to “leapfrog” to the digital economy.

The e-invoicing program, meanwhile, is part of the efforts of the Bureau of Internal Revenue (BIR) to digitalize its tax administration and collection system. The Republic of Korea has extended a grant through the Korea International Cooperation Agency (KOICA) to fund the pilot stage of the bureau’s e-invoicing system.

Dominguez said the e-invoicing system will complement the Duterte administration’s Comprehensive Tax Reform Program (CTRP) to make the tax system simpler, fairer and more efficient. The e-invoicing system will also translate into more convenient, reliable and transparent services for taxpayers, and set the stage for world-class tax administration in the country, he added.


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