Despite the spur of digitization during the pandemic, individuals who chose to pay for government transactions and fees are few and far between in 2021, the Bangko Sentral ng Pilipinas (BSP) said.
During a Senate Hearing last Tuesday, BSP Deputy Director of the Payment System Oversight Department (PSOD) Bridget Mesina-Romero said that as of end-2021, only 8.2 percent of the total person-to-government payments were made digitally.
This is in contrast to the total government disbursements during the year where almost 97 percent of all outlays by the government were already digitized.
Payments from businesses to the government, meanwhile, were at 34.8 percent digitized during the year. Mesina-Romero, who is also a lawyer, said she is “optimistic” that the recent executive order of the national government that encourages digital payments would spur more digitization in terms of collection in the next few years.
Before stepping down from office, former President Rodrigo Roa Duterte issued Executive Order (EO) 170 to urge the entire government to spur digitization efforts in the financial system.
The EO mandates all departments, agencies, and instrumentalities of the government, including state universities and colleges and government-owned or -controlled corporations, and enjoins local government units to utilize digital channels in the disbursement and collection of payments.
BSP Senior Assistant Governor and General Counsel Elmore Capule, meanwhile, said while the EO is a welcome initiative to their push for digitization, he urged legislators to legislate the mandate to establish funding and systems in place.
“We believe that this should be ‘hard-coated’ in a law because essentially it will require operations and budget for the creation of the system. And because of the mandate of the BSP on digital payments and digital access, we are going to support this bill,” Capule, also a lawyer, told the senators.
Following the issuance of EO 170, two state-run banks responded with boosts to their digital platforms.
In June this year, Development Bank of the Philippines announced that it has signed a memorandum of agreement with the Philippine Deposit Insurance Corp. to facilitate the payment of insurance claims to depositors of closed banks.
This collaboration, according to the bank, is an effort towards using digital channels in the delivery of the government’s services.
In the same month, Land Bank of the Philippines Inc. (Landbank) announced that it is rolling out a P1-billion initiative to support rural banks in their bid to digitize their operations to keep up with the demands of times.
In a statement, Landbank said their new program, which will be called “Digitalization of Countryside Financial Institutions Lending Program,” aims to help banks in the countryside onboard new clients, especially those who are unserved and underserved by the banking system.