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Keynote Message

Date: 11.20.2019

Place: BSP Assembly Hall

Occasion: EGov Pay Philippines and QR Ph - Unleashing the Powers of Digital Transformation

Speaker: BSP Governor Benjamin E. Diokno, Ph.D.


Mr. Justo Ortiz, Chairman of Philippine Payments Management Inc., Mr. Abraham Co, President of Philippine Payments Management Inc., heads of government agencies, distinguished payment service providers, dear BSP colleagues, ladies and gentlemen, a pleasant afternoon to all.

And welcome to all of you.

As you know, digitalization is rapidly changing the way we live and work today.

Digital payment solutions offer us security and convenience when settling our obligations to the government. As face-to-face interaction with the revenue-collecting officer is no longer necessary, these solutions also help in minimizing leakage from revevnue collection which have been a perennial problem in this country.

Likewise, electronic payment services promote greater transparency and can help curb corruption. It is quite hard to do “under-the-table transactions” when a payer deals only with a computer which captures the electronic footprints of every command it receives.

Stated differently, e-payment platforms provide an audit trail which in itself is a deterrent to anomalies. Any person with a sound mind is unlikely to commit fraud if he knows that there are clear traces of his activities.

From a broad perspective, digitalizing payments to the government can help boost our economy. I don’t want to sound too technical. But it may be worth mentioning for the purpose of this occasion that elementary economic principles tell us that government expenditures, which represent a major part of the Gross National Product, are funded by the revenue collections of the government.

Hence, if revenues are collected more efficiently through digital payment solutions, funds become available to the government sooner allowing the government to quicken its spending which results in a higher GNP.

Simply put, the efficient collection of revenues translates to faster funding of government programs and activities that benefit the nation as a whole.

While digitalizing payments to the government promises a lot of benefits, there have been challenges in transforming the present set up into its desired end state.

Firstly, many of the government agencies have inadequate capacity to build their own payment portals that can directly interface with the bank and non-bank payment service providers .

Another challenge is the limited interoperability of the government banks with other banks or payment service providers.

Lastly, the issuance of e-receipt is still a policy issue that concerned government institutions need to resolve to make sure that payment transactions to the government are truly electronic end to end.

Realizing the importance of electronic payment facilities for the government, and recognizing the challenges of establishing these platforms, we, as regulators, have set e-government collections as one of our top priorities.

We knonw that fast-tracking the progress of e-government collections will considerably contribute to achieving our vision of elevating the volume of electronic payments to 20 percent in the short to medium term.

Being mandated to oversee payment systems, we have done significant strides towards digitalizing payment systems in the country. We have established a governance framework – the national retail payment system or NRPS which is a basic pre-requisite for ensuring a safe, efficient, and inclusive retail payment system.

To achieve efficiency, this policy framework promotes interoperability among the payment service providers. Interoperability makes e-payment services widely acceptable. People can appreciate these services only if they can conveniently make any financial transaction with just a single account.

And we are here today to formally expand interoperability in Linkbiz. This Landbank-hosted payment portal enables government agencies and private sector entities to accept e-payments.

Being mandated to oversee payment systems, we have done significant strides towards digitalizing payment systems in the country. We have established a governance framework – the national retail payment system or NRPS which is a basic pre-requisite for ensuring a safe, efficient, and inclusive retail payment system.

To achieve efficiency, this policy framework promotes interoperability among the payment service providers. Interoperability makes e-payment services widely acceptable. People can appreciate these services only if they can conveniently make any financial transaction with just a single account.

And we are here today to formally expand interoperability in Linkbiz. This Landbank-hosted payment portal enables government agencies and private sector entities to accept e-payments.

At the same time, we are here to unleash the power of a cutting-edge technology to further push e-payments forward—Quick Response or the QR technology which brings us a code in which relevant payment details are embedded.

I myself have paid using a QR code and such an experience was easy and convenient. I am convinced that when the QR code becomes the major form of payment worldwide, people can literally live with just a mobile phone.

I would like to stress that the QR code will enable us to advance our financial inclusion agenda as it is a cost-effective means for our micro merchants including the small entrepreneurs, sari-sari store owners, and street vendors to accept e-payments, thereby including them in the formal system.

It is notable that with the QR technology, micro-merchants need not invest in costly electronic data capture equipment like point of sale terminals. All they need is to print the QR Code that their payment service providers will generate for them, display those codes, and obtain payments by simply asking their customers to scan the codes.

Of course, we aim for greater interoperability in our payment systems. Thus, we have issued a policy requiring a national QR Code standard since standardization is meant to allow providers of QR-enabled payment and financial services to interconnect with each other.

Thanks to the PPMI for taking the lead in determining our National QR Code standard. Its board has recently approved the “QR Ph” as our national standard for payments. As QR Ph follows the EMV® QR Code standard which is recognized globally, we are poised to interlink with other jurisdictions, particularly with our fellow ASEAN Member States.

To build public confidence in QR-driven payment services, let me emphasize that our policy requires the payment service providers to make the safety of consumers their utmost priority. They must manage the threats and vulnerabilities arising from these services.

More importantly, let me highlight that since the QR is primarily intended to enable micro-merchants to accept electronic payments, the policy further requires the payment service providers, banks and non-banks alike, to price their QR-enabled payment and financial services with due consideration of the underlying transactions, especially those of low amounts.

I appeal to all of you to make transactions which are equivalent to at least the highest daily minimum wage free of charge. I learned that some of our peers in the region do not charge a fee for micro payments.

Finally, Instead of focusing only on fee-based income, I hope that the payment service providers will take a holistic view of all the benefits of tapping the financially-excluded market consisting of micro-merchants and their customers.

Ladies and gentlemen, I am indeed delighted to see that things are gradually falling into place. While there are more challenges ahead of us, I know that we will be able to rise above them if we continue to draw inspiration from the Filipinos out there who need us most.

At any rate, our success is ultimately measured not by the volume or value of e-payments but by the depth and breadth of our contributions to alleviating the plight of the unserved and underserved Filipinos.

Thank you very much and mabuhay!

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