In a bid to address what he described as the "digital disconnect" among Filipinos when it comes to financial services, Camarines Sur 2nd district Rep. LRay Villafuerte has prodded his House colleagues to immediately approve his proposed “Bangko sa Baryo Act".
Embodied in House Bill (HB) No.273, the measure seeks the creation of an enabling regulatory environment for innovations and allow banks to exponentially reach and serve clients more efficiently at the soonest possible time through authorized cash agents (ACAs).
“It is imperative for us legislators to address this digital disconnect by passing HB No.273 in the House and a counterpart bill in the Senate to establish soon enough a banking presence all over the country,” said Villafuerte, president of the National Unity Party (NUP).
Villafuerte said the glaring disconnect is “borne out by the reality that despite the dramatic increase in online or e-payments, particularly in the last two years under the Covid-19 pandemic, an estimated low of almost 10 million to a high of over 34 million Filipinos have no bank accounts yet, apparently because of our leave-much-to-be-desired digital infrastructure coupled with the dearth of banks, especially in remote barrios across the country".
The measure remains pending before the House Committee on Banks and Financial Intermediaries.
It seeks to authorize the Bangko Sentral ng Pilipinas (BSP) to accredit cash agents with good reputation and credit history to set up shop in retail outlets such as convenience stores, pharmacies and other highly accessible places, and serve as “last mile" providers of financial services in faraway places with zero bank presence.
Villafuerte recalled that then-President Rodrigo Duterte issued Executive Order (EO) 170 or the “Adoption of Digital Payments for Government Disbursements and Collections" on May 12, 2022, which directed all national government (NG) agencies, local government units (LGUs), state universities and colleges (SUCs) and government-owned or -controlled corporations (GOCCs) to tap digital platforms in disbursing and collecting official payments.
To implement EO 170, government agencies led by the Department of Finance (DOF) issued last week its draft implementing rules and regulations (IRR) mandating all these covered government agencies to implement 1) digital disbursements in six months’ time, and 2) online collections within one to three years, depending on each agency’s operational readiness and capability to do so.
Meanwhile, President Ferdinand "Bongbong" Marcos Jr.--in his budget message to legislators for his proposed P5.268-trillion General Appropriations Act (GAA) for 2023--has stressed that digital migration and financial inclusion remain government priorities on his watch.
Villafuerte said the “Bangko sa Baryo Act” can—and will—make this happen because in January 2017, the BSP's Monetary Board (MB) already approved the guidelines for new bank service channels, “allowing banks, with prior BSP authorization to serve clients through cash agents contracted by banks to accept and disburse cash in its behalf, facilitating online self-service deposits, withdrawals and fund transfers, as well as bills payment".
“HB 273 incorporates such BSP guidelines and further enhance the concept of banking through cash agents or ACAs. It shall provide various incentives to any person (applies to both natural and legal) who shall establish its business in the remote areas of the country such as waiver of government fees, free training for personnels, tax benefits, among others," he said.
The other authors of the bill are Camarines Sur Reps. Miguel Luis Villafuerte, Tsuyoshi Horibata; and Bicol Saro Party-list Rep. Nicolas Enciso VIII.