DOLE, BSP support e-payment of wages for financial inclusion

by Angelica Y. Yang/BM, GMA News, 20 Nov 2019

The Department of Labor and Employment (DOLE) and the Bangko Sentral ng Pilipinas (BSP) expressed support for the e-payment of wages in formal accounts for private-sector workers in a joint forum with the labor sector on Monday.

The labor department, in a Wednesday press statement, said that the e-payment of salaries in formal accounts will help in “fostering financial inclusion of private sector works and effectively monitoring proper payment of wages.”

In 2017, only 6.6% of the country’s private sector wage earners received their salaries through a formal account in a supervised financial institution, according to DOLE Undersecretary Claro Arellano, who cited statistics from the Global Findex Report.

“A low financial inclusion among the wage earners may be a source of abuses against the workers and violations of labor laws as there can be difficulty in verifying and validating the payment of correct wages and other mandatory benefits,” he said, in the press statement.

Furthermore, the DOLE said that having a formal account for e-payment will greatly benefit employees, as they will have access to financial products such as savings, credit, insurance, and investment.

E-payment or the digital payment of wages are “valuable and practical tools” which can also benefit vendors, jeepney drivers, tricycle drivers and employers, said BSP Governor Benjamin Diokno in a Financial Inclusion Forum for the Labor Sector speech on Monday.

“Our vision is to have more market vendors, jeepney, and tricycle drivers accepting digital payments through QR code linked to transaction accounts. This means we do not have to always bring cash with us when we go to work or the market– thereby reducing risk of theft,” Diokno said.

Employers can also reap benefits from digital payments through transaction accounts.

“When employers pay salaries directly to the account of their workers through PESONet, it can potentially lower administrative and overhead costs, and reduce risks associated with cash distributions during paydays,” he said.

Diokno said that the banking authority’s support for digital payment of wages goes “hand-in-hand” with its financial inclusion agenda. —