The same Senator who filed the act of full digitization of services in the Philippines Government has filed a bill adopting digital payments in financial transactions of the government and merchants.
In a resolution in the joint congress, Sen. Sonny Angara has pushed forward the Senate Bill 1764 or the Use of Digital Payments Act of 2020.
Senate Bill 1764 sought to find an enabling environment to quicken the country’s adoption of digital payments. This, as well, is a countermeasure bill to Bataan Rep. Jose Enrique Garcia III.
The BSP shall also hurry the adoption by all payment system providers of a national Quick Response (QR) code standard to speed the interoperability of QR-driven payment services and lessen the need for merchants and clients to maintain several accounts.
To facilitate compliance, NGAs, GOCCs, and LGUs must adopt account-based disbursements whereby target recipients directly receive government payments through their bank or digital accounts.
The rationale behind this, Angara took note of the growth of digital payments in the Philippines, ranging at a rate of 27% to 30%. This is higher than the 25% average of emerging Asian countries.
Moreover, this is also backed up by the data from the Bangko Sentral ng Pilipinas (BSP), noting that the low volume of digital payments because of the absence of banking offices in parts of the country and the high percentage of households that do not have bank accounts.
As well, the Central Bank noted that 37% of the 1,634 cities and municipalities across the country lack in banking office while 81.3% of households in Metro Manila have do not have any bank 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 the possible infection to the virus,” the Angara quipped in an interview.
In return, the LGUs, through the issuance of their respective ordinances, shall necessitate merchants within their localities to create and outsource arrangements and mechanisms to enable them to obtain payments from clients.
The first sector to implement this is the toll expressway operators who have started transitioning to entirely cashless transactions in submission with the Department of Transportation order.