Impact on adaptation of digital system for disbursements

Drawn by Joanna Bulaon

Janelle Alipio

Outgoing President Duterte signed Executive Order (EO) 170 on May 12 to direct all government departments, agencies, state educational institutions, and government-linked companies to adopt digital systems for disbursements and collections. Disbursements also include the release of wages, employee compensation and especially, government financial assistance during calamities and state emergencies.

What are the benefits? Processing time and in-person presence at government houses will be significantly reduced. Waiting times and long queues will be a thing of the past leading to better efficiency. Next, current bureaucratic red tape and corruption can be eradicated. Unfair practices of facilitation money and graft can now be avoided. Lastly, digitalisation will expedite wages disbursement and government financial aid programs to reach the needy faster and more effectively. Fixers or middlemen who profits illegally from facilitating these disbursements can be removed, ensuing the full aid reaches the needy.

However, EO 170 is a double-edged sword. Though digitalisation is lauded and brings about necessary benefits, but the government may lack the iron will for proper implementation. Government agencies must be supervised and taken to task for any non-compliance during the entire implementation process. 40% of Filipinos views online services as unsafe and many are susceptible to scams. Philippines is not well-known for her internet infrastructure reliability which impacts the smoothness and confidence of the digitalisation process.

For a successful implementation, steps to improve user confidence must take priority. Anti-hacking and anti-scams regulations must be implemented. Data protection and privacy acts must be enforced to protect user privacy. In addition, a nation-wide public education about the benefits and the detailed implementation process must be carried out via various media channels. Lastly, the national network stability and reliability needs to be vastly improved.

Though there are many implementation challenges, the preference for digital payment services is clearly on an upward trajectory curve. Confidence in the adoption of digital financial services is gradually increasing. The $1.5 billion and $4.0 billion budget that was approved President Duterte to accelerate the deployment of an improved national broadband network will similarly increase user adoption and confidence significantly.