LGU cashless transaction part of ‘new normal’ – DILG

INSTEAD of an option, digital transaction has now become a “necessity” for local government units (LGUs) as they brace for the” new normal,” according to the Department of the Interior and Local Government (DILG).

DILG spokesman and Undersecretary Jonathan Malaya, in a webinar titled “Efficient Delivery of Government Aid through Digital Disbursement,” on Thursday said the lingering pandemic made digital transformation for the LGUs already on the cards.

Malaya added that the coronavirus disease 2019 (Covid-19) pandemic had pushed the LGUs toward cashless transaction, and they should be prepared for it.

“If there is a silver lining, it is to prod and expedite the digitization of the LGUs under the new normal,” he said.

Particularly, Malaya added, the digital disbursement would make delivery of

government aid effective through cash cards and financial service providers (FSPs) such as the Paymaya and GCash.

Prior to the pandemic, 64 percent of the payments made by the government were digital in 2018, based on the DILG’s recent data.

The challenge for the LGUs, however, is to keep up with the private sector, Malaya pointed out.

Another stark challenge is the reach of internet connection, with remote areas having no access to online transaction through phones, he said.

Malaya added that the LGUs should speed up strengthening

their ICT infrastructure and to beefing up manpower to unshackle themselves from restraints of poor internet connection.

“You can see the difference between manual payment and digital payment,” he pointed out.

Malaya said the digital transaction in the government would reduce red tape and cost of doing business.

Jeremiah Belgica, director general of Anti-Red Tape Authority, put it that the pandemic highlighted the importance of digital services for the LGUs.

Amid the pandemic, one of the reported challenges faced by the LGUs was the distribution of the Social Amelioration Program (SAP) cash aid to their constituents.

According to Vicente Catudio Jr., digital finance adviser, United States

Agency for International Development /Philippines E-Project, the inefficiency in the distribution of the SAP cash aid was exposed by manual disbursement in the first tranche.

Manual disbursement is not “transparent,” may result in misappropriation and requires massive deployment of resources, Catudio said.

He added that queuing may expose beneficiaries to infection and undermines public health safety.

In digital disbursement, the beneficiaries do not need to line up all day to receive the assistance, Catudio said.

Marvin Santos, enterprise head for the public sector of Paymaya, and Gov. Carlo Dakila Cua of the Union of Local Authorities of the Philippines are rallying behind a national ID system to help in the efficient and faster way of digital disbursement.

According to Santos, FSPs such as the Paymaya will make government transactions efficient with e-wallet payments through LGU websites.

Moreover, Manila Mayor Francisco “Isko Moreno” Domagoso recognized the importance of the digital transaction in his city not just in the distribution of aid to his constituents, but also for creation of database and for policy formulation.

“‘ Pag manually binibigay ang pera, mas malaki ang tsansa na mapariwara ang salapi ng taumbayan (If the money is given manually, there is a bigger chance that the money of the people would be misused),” he said.

Digitizing is the direction of the City of Manila, Domagoso added.