In its aim to increase the level of cashless transaction to 20% by 2020 from about 1%, the Bangko Sentral ng Pilipinas (BSP) is set to pilot test the on boarding of government transactions in the National Retail Payment System (NRPS) in the third quarter.
According to a recent report, the Central Bank’s Deputy Governor Chuchi Fonacier recently shared that the regulator is looking at utilising the NRPS framework for the electronic collection or payments of taxes to the Bureau of Internal Revenue (BIR).
To achieve this, they will be using one of the two automated clearing houses (ACHs) as part of a safe, efficient, affordable, and reliable e-payments system.
The NRPS provides the framework to secure promised gains of modernising retail payments for the benefit of the consumers, the industry and the economy as a whole.
This is built on three core principles, namely: interoperability, inclusivity and “coopetition”.
- Interoperability is the state in which customers can transfer funds from their own account to any BSP-regulated transaction account using any device.
- Inclusivity requires that all qualified financial service providers must be able to effectively participate in the system – regardless of their size and type of transaction accounts offered.
- “Coopetition” is coined from the words “cooperation” and “competition,” because NRPS promotes both cooperation and competition in the industry.
The central bank will be using the Philippine EFT System and Operations Network (PESONet) automated clearing house.
This involves funds transfers that are processed in bulk and cleared at batch intervals from one account to one or several accounts maintained in different banks.
The batched electronic funds transfer facility would allow a taxpayer to directly transfer funds from his or her account to the account of the BIR.
They can make use of their personal computers and mobile devices to conveniently initiate payments to the BIR through PESONet.
They will not go through the hassles of queueing since they do not need to leave their homes or workplaces in order to settle their tax obligations.
The central bank is closely coordinating with several entities. These include:
- The Philippine Payments Management Inc., which is the Payment System Management Body (PSMB) of the NRPS Framework
- Industry practitioners
- The concerned agencies on the digitalisation of government collections
Other Agencies to follow suit
After implementation with the Bureau of Internal Revenue, other agencies shall follow as billers in this e-payments solution.
Additionally, the central bank is looking at coursing the payments made by the government to suppliers, social security premiums, dividends, and other fees through digital channels.
The central bank is also pushing for the inclusion of PHPay as part of the NRPS.
The government online payment system is an internet-based e-payment facility and gateway allowing citizens and businesses to remit payments electronically to government agencies.
The facility renders services through various delivery channels, which include debit instructions (ATM accounts), credit instructions (credit cards) and mobile wallets (SMS).
With the iGovPhil’s online payment system, payment can be made online allowing participating agencies to free up their staff and focus more on competencies.