To help fast-track the adoption of digital payments for financial transactions of the government and all merchants, Sen. Sonny Angara has filed Senate Bill 1764 or the Use of Digital Payments Act of 2020.
A counterpart measure to the bill filed by Bataan Rep. Jose Enrique Garcia III, Senate Bill 1764 seeks to provide the enabling environment to accelerate the adoption of digital payments in the country.
Under the bill, all national government agencies (NGA), government owned and controlled corporations (GOCC) and local government units (LGU) will be required to “utilize safe and efficient digital payment” in the collection of taxes, fees, tolls, and other revenues and in the payment of goods, services and other disbursements.
To facilitate compliance, NGAs, GOCCs and LGUs are required to adopt account-based disbursements whereby target recipients directly receive government payments through their bank or digital accounts.
“Sa ganitong paraan ay mas mapapabilis ang paghatid ng serbisyo para sa ating mga kababayan, mababawasan ang mga pila at makakatipid pa ang pamahalaan ng daang milyon kada taon,” Angara said.
Angara took note of the growth of digital payments in the Philippines at a rate of 27% to 30%, which is higher than the 25% average of emerging Asian countries, but is still just one percent by volume of the estimated 2.5 billion payments made per month.
Data from the Bangko Sentral ng Pilipinas (BSP) suggest that the low volume of digital payments is due to the absence of banking offices in parts of the country and the high percentage of households that do not own bank accounts.
The BSP noted that 37% of the 1,634 cities and municipalities across the country do not have banking offices and that 81.3% of households in Metro Manila have no bank accounts at all.
“Our experience with the Covid-19 pandemic has highlighted the need to institute digital payment systems and to have every Filipino benefit from cashless transactions. We saw thousands of people lining up for the distribution of cash aid under the social amelioration program, which was not only inefficient, but unnecessarily exposed the beneficiaries and the people paying out the money to possible infection to the virus,” Angara said.
According to the Better Than Cash Alliance, whose members consists of national governments, global brands, UN agencies and humanitarian NGOs, a lot of time and resources are wasted in making and receiving inefficient cash payments.
It cited the case of Mexico, which saved nearly $1.27 billion on costs to distribute wages, pensions and social welfare when it digitized and centralized payments.
Under the proposed law, the BSP shall accelerate the adoption by all payment system providers of a 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.
LGUs, through the issuance of their respective ordinances, shall require merchants within their localities to establish and/or outsource arrangements and/or mechanisms to 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.
The toll expressway operators are among those who have started transitioning to fully cashless transactions in compliance with the order of the Department of Transportation for its attached agencies to implement contactless and cashless systems for transactions.