According to Angara (2020)One of the game-changing effects of the Covid-19 global pandemic,

according to a recent piece in The Economist, is the necessity to automate government services.
Government services must be provided in the virtual world because the pandemic has effectively shut
down physical engagement. This is especially essential when it comes to delivering government
incentives that will aid Filipinos in surviving the pandemic’s economic effects. Many good—and not-so-
good—examples of how digital payment systems are employed may be found in the article. The high
amount of unemployment insurance applications in Florida prompted the state’s website to go down for
many days. For assistance, people had to travel to government offices. The same thing happened in
Italy, where the social security website received 300,000 applications every day. Worse, the claims were
submitted by hackers. Some countries, on the other hand, had few issues as a result of how they
adopted digital services. Estonia, for example, has a system that connects bank accounts to a citizen’s
registered information, making it relatively simple to identify persons in need and offer them rewards.
Taiwan took a different approach: they used their health-care system to fund a small-business stimulus
program. People could use their insurance cards to reclaim cash spent on eligible goods and services,
such as meals, using an ATM. Mexico saved over $1.27 billion in distribution costs for pensions, social
assistance transactions, and salaries after implementing an effective system, according to a report by the
Better Than Cash Alliance. Digital payment mechanisms are desperately needed in the Philippines. In
reality, our country’s digital payment growth rate is between 27 to 30 percent, which is greater than the
25 percent average for growing Asian countries. Even still, this barely accounts for 1% of the 2.5 billion
payments made each month. Data from the Bangko Sentral ng Pilipinas sheds light on why internet
transactions appear to be so limited: There are no banking offices in 37% of cities and municipalities
across the country, while 81.3 percent of households in Metro Manila have no bank accounts. The
reality that these figures indicate is depressing—and, on some levels, dangerous. People must physically
queue for monetary assistance from social assistance programs, exposing both government staff and
recipients to infection. These physical transactions would not have happened if there had been a digital
payment mechanism in place. This is why Senate Bill 1764, the Use of Digital Payments Act of 2020, was
introduced. It is a companion bill to Representative Jose Enrique Garcia III of Bataan’s bill. Senate Bill
1764 intends to promote the widespread adoption of secure and efficient digital payments for
government and public-sector financial operations. All national government agencies, government-
owned and controlled enterprises, and local government units (LGUs) shall be required to implement
effective digital payment systems under the terms of this legislation. These will be used to collect taxes,
fees, tolls, and payments for products and services, among other things. Account-based disbursements
will be necessary for all of the aforementioned government institutions, allowing targeted recipients to
receive government payments directly through their bank or online accounts.The adoption of a national
Quick Response code standard by the Bangko Sentral ng Pilipinas will speed up the procedure. This will
be used to standardize QR-based payment services, allowing merchants and customers to have fewer
accounts to manage. Local governments will further encourage this trend by forcing local retailers to use
compatible and interoperable digital payment systems as a condition of obtaining business permits.
Finally, the Departments of Science and Technology, as well as the Department of Information and
Communications Technology, will take steps to reduce the cost and availability of Internet access. This
will not only help government programs and services transition to digital payment systems, but it will
also encourage the general population to do so. Not only for government services, but also for the
economy as a whole, Filipinos require dependable, secure, and easily available digital payment
solutions. They will be crucial tools in our adaptation to the new normal since they will increase social
distancing efforts and welfare support. We must create them now, not later, in order to avoid
unnecessary hardship and lay the groundwork for our country’s digital future.

Reference:

Angara (2020) https://businessmirror.com.ph/2020/09/10/digital-payment-safety-efficiency-in-the-next-

normal/
Pandemic accelerated PH consumers’ shift from cash to digital payments

According to Lucas (2020 )Eleven months ago due to the tremendous impact of the coronavirus
epidemic on their daily lives, particularly the constraints on physical travel imposed by the crisis, more
Filipinos are now adopting digital channels to perform transactions — even vital payments. More
crucially, due to public health concerns, as many as nine out of ten local users of electronic payment
systems now prefer conducting cashless transfers over cash payments. According to PayPal, a
multinational payments business, the majority of Filipinos preferred to transact in cash prior to the
Covid-19 epidemic for convenience and practicality rreasons “While cash remains the most popular
means of payment in the Philippines, the pandemic has forced digital payments to play a larger role in
Filipinos’ daily lives,” said PayPal senior director and Southeast Asian head of sales Rajkishore Agrawal.
According to the findings of the online poll, 87 percent of Filipinos increased their use of digital
payments during the epidemic, and 90% stated they preferred digital payments to cash during this time.
With 500 local respondents, the 2020 PayPal Consumer Insights Survey was undertaken with the goal of
determining the influence of COVID-19 on local payment behaviour. “As the pandemic spreads, health
and safety must be at the forefront of our daily decisions,” the official stated. “However, convenience
and security are also important considerations when it comes to continuous use of digital payments.”
The findings are consistent with a recent World Bank and National Economic Development Authority
study that found that digital technologies like digital payments, e-commerce, telemedicine, and online
education helped the Philippine economy cope with social-discrimination measures, business continuity,
and public service delivery. At the same time, the survey indicated that security was the most important
factor for 49 percent of respondents when deciding which digital payment services to utilize. More
crucially, respondents claimed the new mode of payment is here to stay, with a whopping 99 percent
stating they want to continue using it even when community quarantines are lifted. The majority of
Filipino respondents (44 percent) used digital payments to pay for bills and groceries, according to
PayPal (36 percent). Many residents have been introduced to the convenience of buying abroad as a
result of the digital change. “The use of digital payments allows Filipino shoppers to access global e-
commerce markets,” Agrawal said. “Once they’ve seen the benefits—most notably ease and security—it
opens up a world of buying possibilities for them.” Between May and August of this year, 61 percent of
survey participants indicated they made purchases from international merchants, with fashion (41
percent) and technology being the most popular categories (34 percent). Seven out of ten respondents
said they plan to continue buying from international merchants in the next three months, according to
the survey. When it comes to cross-border payment platforms, 77 percent of respondents said PayPal is
their favourite option. In over 200 regions throughout the world, the digital payments platform has an
estimated 361 million account holders. It’s also available in a variety of currencies, allowing consumers
unrivaled worldwide payment freedom.

Reference

According to Lucas (2020) https://www.google.com/amp/s/business.inquirer.net/311579/pandemic-

accelerated-ph-consumers-shift-from-cash-to-digital-payments/amp
Bill promoting digital payments hurdles 2nd reading in House

According to Cervantes (2021) On Monday, the House of Representatives approved a bill on second
reading that encourages the use of digital payments for all government and merchant financial
transactions. House Bill 8992, which requires all national government agencies (NGAs), government-
owned and controlled corporations (GOCCs), and local government units (LGUs) to use safe and efficient
digital or electronic mode of payments in the collection of taxes, fees, tolls, imposts, and other
revenues, as well as in the payment of goods, services, and other disbursements, was passed by voice
vote. Government entities that adopt digital payments will receive funding from the bill to cover the
costs of establishing and maintaining the infrastructure, system, and process adjustments, as well as
transaction fees incurred in connection with the implementation of digital payments, such as merchant
discount rates, processing fees, cash-out fees, and administrative fees. It aims to compel NGAs, GOCCs,
and local governments to implement account-based disbursements, in which recipients receive
government payments directly into their bank or digital accounts. The Bangko Sentral ng Pilipinas will be
required to speed up the implementation of the national rapid response (QR) code standard in order to
improve the interoperability of QR-driven payment systems and reduce the need for merchants and
customers to maintain multiple . should speed up the implementation of their digital payment systems
by enacting ordinances requiring merchants to install a functional digital payment system at their place
of business, either on their own or through outsourcing arrangements, as a condition of getting their
business permits approved or renewed. Small and micro-merchants could benefit from LGU assistance
to help them implement digital transaction capability. To maximize its benefits and promote financial
inclusion, the bill requires NGAs, GOCCs, and LGUs to prioritize the adoption of safe and efficient digital
payment in their financial activities. In order to assist the digitalization of financial transactions, the
Department of Information and Communications Technology will take steps to improve internet
connectivity across the country. (PNA)

Reference

https://www.pna.gov.ph/articles/1134472
Philippines: 5,000% surge in digital payments in the time of COVID-19

According to Hilotin (2011) Instapay peso net the number of PESONet transfers increased by 376
percent year over year to 15.3 million. Meanwhile, the value of PESONet transactions increased by 188
percent to P951.6 billion. During the same time period, InstaPay transactions increased by 459 percent,
to 86.7 million. PESONet is a new electronic fund transfer service that connects banks, e-money issuers,
and mobile money operators in the Philippines to allow customers to transfer payments in the local
peso currency to other customers of participating banks, e-money issuers, and mobile money operators.
THE SIGNATURE OF THE TIMES: A “sari-sari” business in the neighborhood, with COVID-19 safety marks
on the plastic lid and a QR code for loading mobile phone data credit. Payments at rural establishments
like this one (in the Philippines’ eastern provinces) are still primarily made in cash (it says “bring the
exact amount”). However, there is also the option of making a digital payment. It’s becoming more
frequent, and it’s symbolic of the times. The word “sari-sari” means “variety” or “sundry” in Filipino
(Tagalog). THE LAST MILE CHALLENGE: Payments for last-mile transportation, such as the “jeepney,”
have yet to embrace the digital revolution. However, the e-cash ecosystem has already enlisted the
services of Grab, a ride-hailing business. According to data analytics firm Statista, the total value of
digital transactions in the Philippines is expected to reach $15.05 billion by the end of 2021, a significant
increase from 2020. This is most likely the bottom end of the range. In 2020, GCash, a popular digital
wallet platform, reported a transaction value of 1 trillion pesos ($20.8 billion). Manila’s streets are lined
with trees. On Roxas Boulevard, a scene INTRODUCTION TO DIGITAL BILL PAYMENTS: According to
PayPal, the majority of Filipinos used digital payments to pay for bills (44 percent) and groceries (36
percent) as of November 2020. This is a significant increase from 2015, when digital payments
accounted for only roughly 1% of total payments (26 million out of 2.5 billion payments per month).
Fronting the Bay is Roxas Boulevard in Manila. QR Payments from the BSP e-wallet gcash paymaya in the
Philippines. HELPING TO MOVE THINGS ALONG: The BSP is leading the charge toward digital payments.
By 2023, the BSP hopes to have converted 50 percent of all retail payments to digital. To promote e-
payments, the BSP has teamed up with the “Better Than Cash Alliance.” At an online news event on
February 4, Bangko Sentral ng Pilipinas Governor Benjamin Diokno remarked, “The BSP will continue to
engage the public to ensure that Filipinos adjust well to this transformation.”Screengrab #7 from a total
of 29 payments on mobile phones in the Philippines Mobile phone in Manila PAYMENTS WITH A QR
CODE: The central bank of the country is pushing for the use of “QR Ph” for payments. The country’s
retailers will soon be allowed to accept QR payments, according to an online meeting with stakeholders
convened by BSP Governor Benjamin Diokno. PayMaya (previously Smart eMoney, Inc.) was the first
financial company to provide retailers the QR Ph.

Refferences:

https://gulfnews.com/photos/business/philippines-5000-surge-in-digital-payments-in-the-time-of-
covid-19-1.1620723294027
BSP exec urges more people to use digital payments

According to Villanueva (2021) Due to travel constraints, digital payments increased during the
pandemic, but some people are still resistant to the change, necessitating outreach to this group,
according to a senior monetary official. BSP Payments and Currency Development Sub-Sector Asst.
Governor Edna Villa said the share of digital payments to total payments in the first half of 2020 was
around 17 to 18 percent, which is close to the central bank’s goal of 20 percent by 2020, during a press
conference for the virtual 2021 Bangko Sentral ng Pilipinas Youth Summit on Friday. By 2023, the BSP
wants digital payments to account for half of all transactions. Villa is optimistic that the BSP will meet its
goal, but he acknowledges that problems exist, one of which is some people’s aversion to using digital
means for financial transactions. “There are still people in society who don’t trust the system.” We need
to reach out to those segments of society who are unaware that they can pay through digital means.
And that’s one of the reasons the BSP has so many consumer awareness campaigns,” she added. The
current digital cash transfer facilities, the PESONet, and InstaPay, according to BSP Deputy Governor
Mamerto Tangonan, are insufficient to enhance digital payments because they cannot be used to pay
merchants and bills. Payments to merchants account for roughly 70% of total retail payments, according
to him, and this will be bolstered by the full adoption of QR PH P2M (person-to-merchant), or the use of
QR (quick response) codes to pay merchants, by the third quarter of this year. QR PH P2M is now being
tested by the BSP with a small number of merchants and financial institutions. People who need to pay
for goods or services can simply scan the QR code of the business with their mobile phones under this
approach. “It’s critical because, as you know, QR codes are a highly cost-effective alternative to using
cards to digitalize payment transactions,” Tangonan added. He anticipates that once QR PH P2M is fully
operational, a huge number of payments to merchants will be done using this system because it is more
convenient, secure, and cost-effective. “We are convinced that by offering the market with the suitable,
accessible, and inexpensive digital payment solution for the widely-used payments use cases, we can
realize our aim of becoming a cash-lite society,” he added.

Reference

https://www.pna.gov.ph/articles/1146567
Filipinos less open to digital payments vs regional peers

According to business world (2021), more than three-quarters of Filipino customers are open to using
digital payments, although they are more hesitant than consumers in other Southeast Asian countries.
According to a survey conducted by VMWare, Inc. In the United States, 76 percent of Filipino
respondents are open to the idea of digital payments. However, this is lower than the rates in Singapore
(88%), Malaysia (87%), Indonesia (90%), and Thailand (90%). (85 percent ). “Digital-first financial services
firms have a huge opportunity in the Philippines,” Walter So, Country Manager, VMware Philippines,
said in a statement. “The pandemic last year significantly changed the way Filipinos engage with brands
digitally.” The central bank unveiled its digital banking framework in December, which distinguished
these online lenders from commercial, rural, thrift, and Islamic banks with physical branches. According
to the report, more over half of Filipino respondents (55%) now prefer to conduct banking transactions
through apps rather than through branches. Filipinos benefited from digital engagements as well, with
62 percent claiming that it saved them time that they could use on other objectives. According to the
report, 63 percent of Filipino customers believe their phones are more crucial for financial transactions
than their wallets. The study also discovered that Filipinos are becoming more trusting of financial
technology such as artificial intelligence (75 percent ). Meanwhile, more than a third (36%) of people
would rather use an app than seek guidance from a banker when making investing decisions. Filipinos
are concerned about a high level of security and protection of consumer data (63 percent), faster service
speed (52 percent), ease-of-use across all devices (36 percent), and applications that deliver services
simply and effectively, according to the survey (36 percent ). More than six out of ten Filipinos (64%)
stated they would switch brands if a company’s digital experience fell short of their expectations. Mr. So
explained that “beyond speeding innovations and driving competitive benefits for digital banks, utilizing
frontier technologies like Cloud, facial recognition, and 5G may also assist decrease barriers to financial
access and bridge the financial inclusion gap in the Philippines.” Meanwhile, a quarter of Filipino
respondents believe financial services organizations have failed to adapt to the shifting industry,
according to the report. According to figures from the Bangko Sentral ng Pilipinas, almost 51.2 million
adult Filipinos were still unbanked in 2019, with only 29% of the adult population having a formal
banking account (BSP).

Reference

https://www.bworldonline.com/filipinos-less-open-to-digital-payments-vs-regional-peers/
PH digital payments on an upswing – UN report

Accoring to Caraballo (2021) Philippines sustained its progress in terms of digital payment transactions,
according to a report from a United Nations (UN) agency commissioned by the Bangko Sentral ng
Pilipinas (BSP). In the 2019 update and 2020 preview of its report titled “The State of Digital Payments in
the Philippines,” the UN-based Better Than Cash Alliance (BTCA) said the volume of monthly digital
payments in the country climbed from 10 percent in 2018 to 14 percent in 2019. This corresponds to a
27-percent expansion in volume, driven primarily by high-frequency, low-value retail transactions, like
merchant payments, it added. “In 2019, an estimated 4.8 billion payments were made per month,” BTCA
emphasized. The value of monthly digital payments grew to 24 percent of all transactions in 2019,
higher than the 20 percent in 2018.It also said early estimates for the first half of 2020 indicate that
digital payments inched up to 17 percent of all monthly payments, propelled by payments made to
merchants and person-to-person (P2P) payments.During the same period, the average monthly value of
digital payments also increased marginally, from 24 percent to 25 percent.For his part, BSP Governor
Benjamin Diokno said the report confirms the Philippines is “on the right track in providing the
necessary interventions to promote digitalization of consumers and merchants alike.”

Refferences:

https://www.google.com/amp/s/www.manilatimes.net/2021/05/01/business/business-top/ph-
digital-payments-on-an-upswing-un-report/869042/amp