Camarines Sur (CamSur) Rep. Migz Villafuerte believes the Bangko Sentral ng Pilipinas (BSP) along with national government agencies (NGAs) and local government units (LGUs) should make a concerted effort to further accelerate the use of safe and interoperable online cash transactions in the government, as a way to outweigh assorted challenges that stand in the way of the Marcos administration’s digital transformation agenda.
“Such challenges to a speedy switch to online payments at this point include the inadequate access to reliable digital infrastructure, slow internet connectivity especially in remote areas, costly digital payment fees and limited acceptance of digital payments,” said Villafuerte in justifying the need for House Bill (HB) No. 3646, or the “Promotion of Digital Payments Act.”
To increase the use of digital payments, Villafuerte, who chairs the House committee on information and communications technology (ICT), said that HB 3646 provides for the following:
· Mandate 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;
· Mandate the BSP to expedite adoption of the national quick response (QR) code standard to enable interoperable QR-based payments and remove the need for multiple merchant and client accounts;
· Mandate LGUs to enact ordinances requiring merchants to install a functional digital payment systems at their place of business and to extend assistance to small and micro-merchants to facilitate their adoption of digital transaction capability;
· Authorize 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;
· Empower the BSP along with the Departments of Trade and Industry (DTI), of the Interior and Local Government (DILG) and of Information and Communications Technology (DICT) to implement capacity-building initiatives; and
· Direct the Department of Science and Technology (DOST) and 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.
Villafuerte noted that the BSP has committed to shifting at least half of total retail transactions to digital mode, as outlined in its Philippine Development Plan (PDP) 2023–2028, and has actually made strides with such online transactions in hitting a rate of 52.8% in 2023, and a higher 57.4% in 2024.
Merchant payments accounted for the largest share of monthly digital payment volume, followed by person-to-person transfers, and business-to-business supplier payments, he said.
However, he said, despite the encouraging developments, “challenges remain in the adoption of digital payment systems across the country … such challenges to a speedy switch to online payments include the inadequate access to reliable digital infrastructure, slow internet connectivity especially in remote areas, costly digital payment fees and limited acceptance of digital payments.”
This proposed law builds upon, he said, the legal framework established by Republic Act (RA) No. 11127, or the “National Payment Systems Act,” which provides the BSP with the authority to supervise and regulate payment systems in the country.
Villafuerte pointed out that by accelerating the adoption of digital payments, HB 3646 “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.”
It also aligns with RA No. 11032, or the “Ease of Doing Business (EODB) and Efficient Government Service Delivery Act of 2018,” by streamlining government services and expanding access to digital financial tools.
Under the bill, NGAs, LGUs and GOCCs may create their respective digital payment technical support and maintenance service units, which shall be responsible for troubleshooting and maintaining coordination with the partner-Payment Service Providers (PSPs) for technical and other concerns within the respective agencies.
Villafuerte, who was once CamSur governor, said that to accelerate the adoption of digital payments, HB 3646 requires LGUs to “issue their respective ordinances requiring 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 prerequisite 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 bill states.
It directs LGUs to “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, under the bill, extend assistance to small and micro-merchants to facilitate their adoption of digital transaction capability; while the BSP, DTI, DILG and DICT shall similarly facilitate measures to provide capacity building for the NGAs, GOCCs, LGUs and merchants on the use of digital payments.
LGUs may impose reduced fees or grant other incentives for merchants providing efficient digital payment systems.
Also, LGUs may impose reduced fees or grant other incentives for merchants providing efficient digital payment systems.
Migz Villafuerte has introduced a separate bill mandating the integration into the education curriculum of students in Grades 6 to 12 basic concepts of coding, digital literacy, responsible AI use, and algorithmic thinking; and the revision of the curriculum in tertiary education to include at least one AI-related subject across non-tech courses.
In HB 1699, or the “National Digital Skills and AI Readiness Act,” Villafuerte proposes the creation of a Youth Digital Work and AI Talent Acceleration Fund, which will be used to provide scholarships and subsidies to young people from low-income families and support AI events.
The Technical Education and Skills Development Authority (TESDA) is directed, meanwhile, by HB 1699 to establish Regional Future Skills Centers that shall offer free training programs in digital coding, digital marketing, data science, cloud computing, and AI tools, as well as government-subsidized certification programs on global tech platforms.
