President Orders the Adoption of Digital Payments for Government Entities

On 16 May 2022, Executive Order No. 170 (EO 170) was issued enjoining all departments, agencies, and instrumentalities, government owned and controlled corporations (GOCCs), and local government units (LGUs), to adopt digital payments for their respective disbursements and collections. 

EO 170 defines government disbursements to include the payment of goods and services, the distribution of financial assistance, the payment of salaries, wages, allowances, and other kinds of compensation to employees, and other disbursements. 

On the other hand, government collections include the payment of taxes, fees, tolls, and other charges and impositions. The EO does not, however, preclude the acceptance of cash and other traditional modes of payment. 

EO 170 mandates agencies to ensure that various digital payment methods are accepted. They are encouraged to engage the services of established Payment Service Providers, provided that they offer interoperable payment solutions that are compliant with the National Retail Payment System Framework.  

To guarantee an efficient and seamless transition to digital payments, the EO allows for such funds to be disbursed directly into the transaction accounts of recipients or beneficiaries, whether in government or private financial institutions, without the need of a prior special arrangement with the financial institution concerned. 

Government entities are also mandated to adopt a Business Continuity Plan where non-digital payout channels are used in case of emergencies and/or calamities.

Finally, government entities are enjoined to fully implement digital disbursements and collections within six (6) months from the issuance of the Implementing Rules and Regulations.