President Duterte has ordered all government agencies to adopt digital payments for government disbursements and collections to promote efficient, secure, and speedy transactions.
At the same time, the President signed an executive order (EO) directing the Department of Trade and Industry (DTI) to create a Franchise Registry for the protection of micro, small and medium enterprises (MSMEs).
The Chief Executive issued Executive Order No. 170 directing all government departments, agencies, and instrumentalities, including state universities and colleges and government-owned or -controlled corporations shift to digital payments for their disbursements and collections.
“The adoption of digital payments for government disbursements will facilitate the expedient distribution of financial assistance to beneficiaries, thereby providing a catalyst for financial inclusion for the most vulnerable sectors of society,” the EO stated.
The order also aimed to support the country’s “development trajectory towards an inclusive, resilient, and future-ready economy.”
Local government units are likewise enjoined to do the same.
The EO also stated that all agencies should use “safe and efficient” digital disbursement in the payment of goods, services, and other expenditures, including the distribution of financial assistance, payment of salaries, wages, allowances, and other compensations to employees.
Likewise, EO 170 allows covered agencies to disburse funds directly into the transaction accounts of recipients or beneficiaries, whether held in government or private financial institutions, without need of a special arrangement from the financial institution concerned.
Apart from distribution of financial aid, government agencies were also mandated to offer a digital mode of collecting payments for taxes, fees, tolls, and other charges.
Duterte said they can use the facilities of government servicing banks such as advice to debit account or interoperable electronic fund transfers (EFT).
“It is understood that this Order does not foreclose the acceptance of cash and other traditional modes of payment,” the order read.
With this, the agencies could engage the services of established payment service providers.
A technical working group (TWG) on the adoption of digital payments would be created to provide “guidance and promote cost-efficiency and transparency” in the digital payment solutions.
The TWG would be composed of representatives from the Department of Finance (DOF), the Department of Budget and Management (DBM), the Bureau of Treasury (BTr), the Bureau of Internal Revenue, and the Government Procurement Policy Board Technical Support Office.
The DOF, along with the Bangko Sentral ng Pilipinas, the Commission on Audit, the DBM, BTr, BIR, and other relevant agencies would issue the implementing rules and regulations within 90 days from effectivity of the EO.
Meanwhile, EO 169 which provides for the strengthening of the franchise industry for the protection of MSMEs.
“There is a need to intensify government efforts to strengthen the franchising industry to help businesses, especially MSMEs, by developing a transparent and business-friendly environment, and promoting fair and equitable practices,” the EO stated.
It provides that franchisors are responsible for registering their franchise agreements with the Department of Trade and Industry (DTI), provided that those who are members of duly registered franchise associations will register with the DTI their standard franchise agreement and execute an undertaking that all future franchise agreements with MSME franchisees will incorporate the minimum terms and conditions prescribed under Section 2 of EO 169.
Franchisors that are not members of duly registered franchise associations must register all franchise agreements entered into with MSME franchisees within 30 days from execution.”
The EO also directs the DTI to create an MSME Registry of Franchise Agreements entered into by and between a franchisor and an MSME franchisee.
Only franchise agreements that incorporate the minimum terms and conditions may be registered.
Section 2 of EO 169 provides for minimum terms and conditions of franchise agreements namely; name and description of the products or services under the franchise, specific rights granted to the MSME franchisee, such as but not limited to the right to use the mark or any other intellectual property rights duly registered with the Intellectual Property Office of the Philippines (IPOPHL); full disclosure of any pre-signing, initial or recurring fees, such as but not limited to, franchise fee, promotion fee, royalty fee or any related type of fee which may be imposed on the MSME franchisee; detailed responsibilities of the franchisor which include the enumeration of the types and particulars of assistance and the submission of the franchise agreement to the DTI; detailedresponsibilities of the MSME franchisee; non-discriminatory provisions; duration of the franchise and the terms and conditions for renewal; effects of and grounds for pre-termination, termination or expiration of the franchise agreement; provision on “cooling off” period where the MSME is given the option to terminate the agreement; mechanism for dispute resolution which shall include a stipulation that parties may seek voluntary mediation under Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004; and remedies of the parties in case of any violation of the terms and conditions of the franchise agreement.
“Compliance with the inclusion of the foregoing minimum terms and conditions in the franchise agreement may entitle the franchisor to incentives or benefits to be provided by the national government,” EO 169 read.
The DTI must formulate and issue implementing guidelines within 90 days from the effectivity of EO 169.
