How can governments promote financial transparency and efficiency, whilst at the same time keeping their electronic payments secure and compliant? A FutureGov gathering of 27 senior finance officials from the Philippines’ public sector attempted to answer that yesterday, with the help of electronic payments specialists from Visa.
The pace of e-payments adoption has been uneven across central government in the Philippines, and delegates were keen to debate the barriers to e-payments, as well as share approaches that had proven successful in rolling out prepaid programmes.
Attorney Darlene Berberabe, President and CEO of the Home Mutual Development Fund (Pag-IBIG Fund), shared a lot of insights in to the development and recent launch of the ‘Pag-IBIG Citi Prepaid Card’. The new card will provide 12 million fund members a more convenient and secure way of receiving and using their loan benefits, she explained.
The Pag-IBIG fund is the provident financial institution in the Philippines, and membership is mandatory for all Filipino employees, whether onshore or offshore. The new Pag-IBIG Citi Prepaid Card is a reloadable prepaid card and can be used for the disbursement of Multi-Purpose Loans (MPL) and Calamity loan proceeds. Members may sign up to avail of the card for the release of their benefits upon filing their loan applications.
According to Attorney Berberabe, prior to the launch of the prepaid card it would take fund members at least two days to avail their short term loans. The whole process involved members disbursing their loans via check in the Pag-IBIG office then going to the bank afterwards to deposit the money in their personal account.
As response to this, Pag-IBIG signed a Memorandum of Understanding with Citibank in December 2011 to pave the way for the launch of the Pag-IBIG Citi Prepaid Card. Due to the general rule that ‘government funds should stay in government banks’, the agency had to acquire several regulatory approvals from the Department of Finance, the Central Bank and the Commission on Audit in order to make the Pag-IBIG prepaid card a reality.
Since the launch of the prepaid card it now only takes a day for members to claim their loans: “With the prepaid card, our members are able to save money from transportation and most importantly, they are able to save time from going to Pag-IBIG to claim the checks and going to the bank. Overseas Filipino Workers (OFWs) in particular, are provided more convenient options to remit their due,” shared Attorney Berberabe.
Since the launch of the prepaid card has enabled the agency to move away from traditional check based disbursements, Pag-IBIG’s service personnel can now further their focus on the delivery of other services.
A bigger role for prepaid cards?
While Pag-IBIG’s launch of its prepaid card is already proving to be a big success, Attorney Berberabe says that the agency is encountering challenges in shifting all members away from the old paper-based way of claiming their loans.
Teresa Habitan, Assistant Secretary for Fiscal Planning and Policy Division at the Department of Finance suggests that Pag-IBIG should do a more massive media coverage of the initiative to increase awareness of the availability of such initiative.
“Its definitely a communication challenge because we are all members of Pag-IBIG, yet there isn’t that much fanfare about this initiative. Prepaid cards are already widely used especially for cell phone top-ups so I think the real message we need to communicate is how members can benefit from this,” she says.
Meanwhile, for Scott Salmon, Visa’s regional head of Prepaid Products, the most effective way to encourage people to use the prepaid card is through the point of purchase at any of the agency’s branches: “When the people at the branch offices understand the benefits of using the card they are able to increase awareness and also address any concerns from the fund members that make them hesitate from using the card,” he said, adding that training programmes for branch personnel would be very impactful as a way of improving service delivery.
Iain Jamieson, Visa Country Manager for Philippines and Guam, adds that another way for Pag-IBIG, or any government agency, experiencing a similar challenge is to equip the prepaid cards with an intrinsic value that a traditional paper-based form of disbursement cannot provide. Examples of which are promotions of product and services discounts at select store.
Attorney Berberabe said that it is also important to emphasise to users that similar initiatives have been successfully done by other agencies such as the Department of Energy and the Department of Social Welfare and Development (DSWD) so they can achieve a level of comfort and confidence in the initiative.
Arturd Cudia, Chief Accountant, from the Department of Energy shared that when the government resolved to help public utility vehicle operators cope with the financial burden brought about by the rising oil prices, a fuel subsidy of ₱1000 (US$40), was distributed through “smart cards” that operators can use to avail of the discount at petrol stations.
The disbursement process was quick and painless, and allowed authorities to avoid both long delays and tedious administrative burden (and costs) that are associated with traditional fund disbursement methods.
On the other hand, the DSWD used prepaid cards to allow recipients of its Conditional Cash Transfer Programme (CCT) withdraw cash from any ATM or use their card in any PoS terminal to purchase essential commodities.
The CCT is part of DSWD’s Pantawid Pamilyang Pilipino Programme, a poverty reduction and social development strategy of the national government that provides conditional cash grants to extremely poor households to improve their health, nutrition and education particularly of children aged up to 14 years.
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Autor(en)/Author(s): Clarice Africa
Quelle/Source: futureGov, 12.04.2013
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