NextGen Day

MANILA – President Rodrigo R. Duterte has signed an executive order (EO) requiring government departments and agencies to use digital payments for government payments.

The Covid-19 pandemic has emphasized the benefits of using digital payment systems across multiple sectors, as it offered a fast, convenient, secure, and transparent way of delivering government services and doing business, according to EO 170, signed by Duterte on May 12.

“The adoption of digital payments for government disbursements will facilitate the expedient distribution of financial assistance to beneficiaries, thereby providing a catalyst for financial inclusion for the most vulnerable sectors of society, contributing to the achievement of the country’s long-term vision under Ambisyon Natin 2040, and supporting our country’s development trajectory toward an inclusive, resilient, and future-ready economy,” according to the EO.

“All government departments, agencies, and instrumentalities, including state universities and colleges, government-owned or -controlled corporations, and local government units (LGUs) are directed, and local government units (LGUs) are enjoined to adopt digital payments for their respective disbursements and collections,” according to the EO.

In the payment of products, services, and other disbursements, including the distribution of financial aid, as well as the payment of salaries, wages, allowances, and other remuneration to employees, all covered agencies must use secure and efficient digital disbursement.

All covered government agencies must provide a digital method of collecting payments for taxes, fees, tolls, and other charges and impositions. This Order is understood to allow for the receipt of cash and other traditional payment methods.

In 90 days, IRR

EO 170 also permits the formation of a Technical Working Group (TWG) to provide recommendations and encourage cost-effectiveness and transparency in covered agencies’ procurement of digital payment solutions.

The TWG must include representatives from the Departments of Finance (DOF), Budget and Management (DBM), Bureaus of Treasury (BTr), Internal Revenue (BIR), and the Technical Support Office of the Government Procurement Policy Board.

The TWG will supervise covered agencies’ acquisition of digital payment solutions to ensure compliance with existing laws, rules, and regulations.

Within 90 days of the Order’s effective date, the DOF must issue the required implementing rules and regulations (IRR) in collaboration with the Bangko Sentral ng Pilipinas, Commission on Audit, DBM, BTr, BIR, and other relevant government agencies. Under Section 7 of this order, the IRR must provide tiering rules for the adoption of digital collections, among other things.

Transition

Concerned authorities should develop programs to train their employees on novel technologies, payment systems, and cybersecurity and data privacy protection measures, as well as increase public awareness of digital financial services.

The government’s push to create an inclusive digital finance ecosystem, as outlined in the Digital Payments Transformation Roadmap 2020-2023 and the National Strategy for Financial Inclusion 2022-2028, will complement existing efforts to make formal financial services more accessible to vulnerable and underserved groups.

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