Promotion of Digital Payments

The “Promotion of Digital Payments” Act aims to promote the use of safe digital payments in financial transactions of both the government and the general public. This measure mandates public entities, including local government units, to offer safe and efficient modes of digital payments in financial transactions such as taxes, fees, and tolls, among others.

The House has approved and released its version of the measure in 2023, while the Senate version remains pending at the committee level. President Ferdinand Marcos Jr. reiterated the importance of digital payments and its trajectory in his second State of the Nation Address in July 2023. The President highlighted that 42 percent of all retail payments in 2022 were digital payments from businesses or the government. With such robust digital transformation, President Marcos Jr. ordered all government offices to “ensure that their vital services are digitalized immediately.”

The committee-approved bill, HB 8262, was released on May 23, 2023. The bill was originally approved as an unnumbered substitute bill on February 14 which consolidated all existing bills filed for the measure. The bill promotes the adoption of national quick response (QR) codes to accelerate payment services between merchants and consumers. An important provision of the bill is the pre-requisite of having a digital form of payment made available to customers by businesses. Otherwise, LGUs will not issue or renew business permits to a business that does not offer a digital mode of payment.

Meanwhile, Senate bills on the measure remain pending at the committee level. In contrast to the House version, the Senate versions mandate LGUs to use monetary or non-monetary incentives instead to encourage merchants to adopt digital modes of payment.

The measure promoting digital payments is listed among the Joint Foreign Chambers of Commerce’s list of priority bills. It is one of the legislative measures that the Bangko Sentral ng Pilipinas (BSP) is vouching for. However, the Marcos administration or Congress has not identified this bill as a priority measure.

In related developments, BSP Deputy Governor Mamerto Tangonan stated during a forum in early October 2023 that the Philippines is on track to achieve its goal of 50 percent of payments being digital within the year. The official noted that the share of retail payments value attributed to digital transactions increased to 42 percent in 2022 from 31 percent in 2021. According to Deputy Governor Tangonan, “This remarkable momentum, driven by the unwavering efforts of our nation’s businesses and financial institutions, instills confidence that we are well on track to achieve our wishes forward and the digital payments transformation roadmap–which is to convert 50 percent of retail payments into digital form by 2023.”

Forging on the exponential growth of digital economies, notable payment-processing firms and digital banking companies are eyeing more seamless payment schemes between merchants and consumers to broaden digitalization efforts. To maintain the upward trajectory of online payments, BSP is reportedly in talks with banks and digital transaction platforms “to lower or waive transaction fees for small transactions under PHP 1,000 (USD ~18).“