President Rodrigo Duterte signed last Thursday Executive Order (EO) No. 170 to insitutionalize use of digital payments for government transactions.

"The digitalization of payments is in line with the government's thrust to develop an inclusive digital finance ecosystem, in accordance with the Digital Payments Transformation Roadmap 2020-2023 and the National Strategy for Financial Inclussion 2022-2028, and will complement existing efforts to make formal financial services accessible to vulnerable and underserved sectors," Duterte said.

Government department, agencies, instrumentalities, including state universities and colleges, government-owned or controlled corporations under the executive department shall use "safe and efficient digital dibursement" for financial aid and payment of salaries and allowances to their employees and other activities involving releasing funds.

"For this purpose, Covered Agencies may use facilities of Government Servicing Banks (GSB) such as Advice to Debit Account or interoperable Electronic Fund Transfers (EFT)," Duterte said.

The GSB will be allowed to collect fees for the EFT services.

EO 170 said government offices under the executive department may still use non-digital payout channels in "exigency of service."

Government offices are required to digital modes for accepting payment.

"For this purpose, Covered Agencies may enage the services of established Payment Service Providers, provided that only interoperable digital payment solutions which are compliant with the National Retail Payment System Framework shall be availed," Duterte said.

A Technical Working Group (TWG) composed by the Department of Finance (DOF), Department of Budget and Management (DBM), Bureau of Treasury (BTr), Bureau of Internal Revenue (BIR) and the Government Procurement Policy Board (GPPB) Technical Support Office was tasked in setting the policies for government's digital payments.

The DOF, with other members of the TWG, will issue the implementing rules and regulations for EO 170 within 90 days from the effectivity of the Order.