Law Summary
Purpose and Policy Declaration
- Aim to promote efficient government services, accelerate transactions, boost revenue, and reduce graft and corruption risks.
- Enable fast, convenient, secure, and transparent digital payments for government services.
- Facilitate transparent financial assistance distribution.
- Build an inclusive digital finance ecosystem accessible to vulnerable sectors.
- Develop human resources skilled in ICT.
- Bridge digital infrastructure gaps ensuring network security and neutrality.
Coverage
- Applies to all Executive Branch departments, agencies, state universities, government-owned or controlled corporations (GOCCs), and Local Government Units (LGUs).
- Philippine Embassies and Consulates under the Department of Foreign Affairs are included.
Definitions
- Defines key terms including Advise to Debit Account (ADA), Authorized Government Depository Bank (AGDB), digital collection and disbursement, digital payment, Electronic Fund Transfer (EFT), electronic money and issuers, Government Servicing Bank (GSB), Merchant Discount Rate, National Retail Payment System (NRPS), Payment Service Provider (PSP), and transaction account.
Digital Payments for Government Disbursements
- Covered Agencies must use safe, efficient digital disbursement methods for payments including salaries and financial assistance.
- Agencies must verify account details, ensure payment accuracy, provide public assistance mechanisms, and allow small top-ups for beneficiaries to cover cash-out fees.
- Government Servicing Banks must execute payment instructions timely, report successful/failed transfers, and notify agencies/public of service disruptions.
- Recipients have rights to choose transaction accounts, rectify errors, and access information.
- Agencies must have contingency plans for calamities, including non-digital payout options.
- Compliance with the Data Privacy Act of 2012 is mandatory.
Digital Payments for Government Collections
- All Covered Agencies shall offer digital modes of payment for taxes, fees, and other charges, without removing traditional payment options.
- Agencies may engage Payment Service Providers (PSPs) compliant with the National Retail Payment System.
- PSPs must issue receipts, ensure data privacy, remit collections promptly, and provide real-time reporting to government agencies.
- Agencies must ensure availability and accessibility of payment channels, promote digital usage, and comply with electronic collection regulations.
Technical Working Group (TWG)
- Composed of representatives from DOF, DBM, BTr, BIR, and Government Procurement Policy Board Technical Support Office.
- Designated senior officials oversee implementation and coordination.
- Functions include strategizing procurement of digital payment services, setting service standards, monitoring compliance, resolving issues, developing guidelines, communication plans, and enforcing compliance.
- Chaired by BTr; Secretariat services provided by BTr with support from BSP and others.
- Has an Advisory Body consisting of COA, DICT, DILG, and Philippine Payments Management, Inc.
- Meetings held quarterly or as needed; quorum requires majority representation.
Transition Period
- Agencies must transition to digital disbursement within 6 months.
- Digital collections transition may take up to 3 years, based on operational readiness.
- Agencies must assign senior officials to lead payment digitalization teams and submit detailed transition plans within 60 days.
Funding
- Initial and subsequent implementation funding comes from existing agency appropriations or corporate funds.
- Budget proposals must include costs related to digital payment infrastructure, transaction fees, and other related expenses.
Digitalization Support
- DICT, DTI, and DILG assist with capacity building for digital payment adoption.
- DICT ensures adequate internet connectivity to support digital financial transactions.
Monitoring and Evaluation
- Agencies must submit bi-annual reports to the TWG and COA detailing progress, key performance indicators, problems, and recommendations.
- DILG grants favorable consideration to LGUs complying with digital payment provisions in their Seal of Good Local Governance assessments.
Final Provisions
- Provisions found invalid shall not affect the rest of the IRR.
- All inconsistent issuances are repealed or amended accordingly.
- IRR takes effect immediately upon publication in the Official Gazette or a general circulation newspaper.