Gov’t drafts rules on digital payments

GOVERNMENT AGENCIES may be given six months to less than three years to transition to digital disbursement and collection, according to the draft rules on the government’s adoption of digital payments.

The Finance department, along with other government agencies, drafted the implementing rules and regulations (IRR) of Executive Order (EO) No. 170, which mandates the adoption of digital payments for government disbursements and collections.

Under the draft rules, all covered agencies will have to fully implement digital disbursements within six months of the effectivity date.

“For the implementation of digital collections, a tiered transition period not exceeding three (3) years shall apply,” the rules stated.

The transition period would depend on the agency’s operational readiness and capability.

If the covered agency is already offering a digital mode of collecting payments through a gateway system or a collection agreement with financial institutions, it should implement digital disbursements within one year from the effectivity date of the IRR.

The transition period for an agency not yet offering digital collection will be more than one year, but less than three years.

The payments digitalization team of the covered agencies will be required to submit a transition plan that includes timelines to fully implement digital payments, strategies for capacity development, and key performance indicators and targets.

“The transition plan shall be officially transmitted by the head of agency to the TWG (technical working group), through the Secretariat, within 60 days after the effectivity of this IRR,” the draft rules stated.

The draft rules also proposed the creation of a TWG on the adoption of digital payments, composed of representatives from the departments of Finance and Budget and Management, Bureau of the Treasury, Bureau of Internal Revenue, and the Government Procurement Policy Board Technical Support Office.

The TWG will determine which agencies are capable of adopting digital payments within a shorter or longer period.

“The transition plan will be used as part of the basis for monitoring compliance of the Covered Agencies. Whenever necessary, the TWG may recommend adjustments in the transition plan in line with the requirements and objectives of EO No. 170,” the draft rules stated.

The IRR of EO No. 170 is in line with the government’s effort to develop an inclusive digital financial ecosystem.

Stakeholders are given until Aug. 24 to give their feedback on the draft rules.

In May, then-President Rodrigo R. Duterte signed the EO No. 170 to ensure “safe and efficient” digital disbursement, including distribution of financial assistance and payment of salaries, wages and allowances to employees. — KBT