President Rodrigo Duterte on Monday allowed the adoption of digital payments for government disbursements and collections.
This developed after he issued Executive Order 170 which covers all departments, agencies, and instrumentalities of the government, including state universities and colleges, government-owned or -controlled corporations and local government units (LGUs).
EO 170 mandates these agencies to utilize safe and efficient digital disbursement in the payment of goods, services and other disbursements, including in the distribution of financial assistance, as well as in the payment of salaries, wages, allowances and other compensation to employees.
Likewise, EO 170 allows covered agencies to disburse funds directly into the transaction accounts of recipients or beneficiaries, whether held in government or private financial institutions, without need of a special arrangement from the financial institution concerned.
For this purpose, they can use the facilities of Government Servicing Banks such as Advice to Debit Account or interoperable Electronic Fund Transfers (EFT).
“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 attainment of the country’s long-term vision under Ambisyon Natin 2040 and supporting our country’s development trajectory towards an inclusive, resilient and future-ready economy,” EO 170 read.
“The COVID-19 pandemic has [also] highlighted the benefits of utilizing digital payment services across various sectors, as it enabled a fast, convenient, secure and transparent mode of delivering government services and transacting business,” it added.
The covered government agencies will also be responsible for preparing payment instructions, with all necessary details, including the name of the beneficiary, details of the transaction account, and amount involved.
The Government Servicing Bank will then carry out payment instructions and submit to the government entity disbursing the fund a verified list of successful or failed fund transfers, together with all relevant details. Subject to agreements between the Government Servicing Banks and government agencies, the former will be allowed to collect fees from the latter for EFT services.
EO 170 also mandates agencies to adopt a Business Continuity Plan to prepare for calamities and other emergencies where payments through digital means may not be effected to ensure continuity of the delivery of payment services.
In these cases, non-digital payout channels may be considered by government agencies in the exigency of service.
Subject to existing laws, rules and regulations, the partner Payment Service Providers of government agencies will not be limited to Government Servicing Banks.
A Technical Working Group on the Adoption of Digital Payments will provide guidance and promote cost-efficiency and transparency in the procurement of digital payment solutions and will be composed of the following agencies
Department of Finance (DOF); Department of Budget and Management (DBM); Bureau of the Treasury (BTr); Bureau of Internal Revenue (BIR); and Government Procurement Policy Board (GPPB) Technical Support Office
All departments, agencies, bureaus, offices or instrumentalities of the government with mandates relating to the adoption of digital payments are directed to render full assistance and cooperation to the TWG, as may be required to carry out its functions under EO 170.
The DICT, for its part, is mandated to take appropriate measures to ensure adequate internet connectivity to support government programs and policies on the digitalization of financial transactions. — Llanesca T. Panti/RSJ, GMA News