Government adopts digital payments

PRESIDENT Rodrigo Duterte has ordered all government offices to adopt digital payments for their respective disbursements and collections.

Duterte, in an executive order signed by Secretary Salvador Medialdea on May 12, 2022, made the order to facilitate the distribution of financial assistance to beneficiaries.

Under Executive Order (EO) 170, all departments, agencies, and instrumentalities of the government, including state universities and colleges and state-owned or -controlled corporations, are directed to allow digital payments for their respective disbursements and collections.

This includes the payment of goods, services and other disbursements, such as the distribution of financial assistance, as well as the payment of salaries, wages, allowances and other compensation to its employees.

Duterte said this will promote efficient delivery of government services, expedite transactions, boost revenue and reduce the risk of graft and corruption.

Agencies covered by the order are no longer required to have a special arrangement with financial institutions in order to disburse funds directly to the transaction accounts of recipients or beneficiaries, whether held in government or private financial institutions.

They should also adopt a business continuity plan to prepare for calamities and other emergencies where payments through digital means may not be affected.

“For this purpose, covered agencies may use facilities of government servicing banks such as Advice to Debit Account or interoperable Electronic Fund Transfers,” the EO reads.

“Further, covered agencies shall be responsible for preparing payment instructions with all necessary details, including the name of the beneficiary, details of the transaction account, and amount involved,” it added.

While a transition takes place, covered agencies should ensure the continuous delivery of public services, particularly the acceptance of non-digital modes of payment.

The technical working group, which includes the Departments of Finance and Budget and Management (DBM), Bureaus of Treasury (BTr) and Internal Revenue (BIR) and the Government Procurement Policy Board Technical Support Office, will be created to provide guidance and promote cost-efficiency and transparency in the procurement of digital payment solutions by the covered agencies.

The Finance department, in coordination with the Bangko Sentral ng Pilipinas, Commission on Audit, DBM, BTr, BIR and other relevant government agencies, will come up with the EO’s implementing rules and regulations.

It also ordered the Department of Information and Communications Technology to ensure adequate internet connectivity to support the digitalization of payments.