OF Bank, E-Invoicing project launch in Q3

May 28, 2020

Even with a national health crisis now besetting the country, the Department of Finance is ready to launch by the third quarter of this year two digital-based programs aimed at improving tax compliance and expanding financial inclusion, especially among Filipino migrant workers, Finance Sec. Carlos Dominguez III said.

Dominguez told lawmakers one of these initiatives—the Electronic Receipt and Invoicing, and Electronic Sales Reporting System or E-Invoicing—would be possibly launched by the third quarter of this year to provide better and faster services to taxpayers.

Aside from the e-invoicing system, he said the Land Bank of the Philippines has also made good on its commitment to him to have the country’s first ever digital-only, branchless bank up and running by the end of June this year.

“The biggest (digitalization) program we’re working on now is e-invoicing. Once we get that e-invoicing program set up, that will mean a big step in e-governance already,” said the DoF chief  during a recent online hearing of the economic stimulus cluster of the Defeat COVID-19 Committee of the House of Representatives.

“We have been working on that for the last year or so, and we should come to a conclusion, a good program by the middle of, or maybe the 3rd quarter of this year,” he added.

His statement was in response to a recommendation by Deputy Speaker Luis Raymund Villafuerte during the online DCC hearing for the government to strengthen and expand its digital-based programs for frontline services.

The Overseas Filipino Bank, which would primarily benefit the country’s migrant workers, would use digital technology and smartphone apps to provide banking and other financial services, Dominguez said.

“We set up this OF Bank a couple of years ago. We’ve had problems with the technology but I think with Cecile’s leadership, we are almost ready to launch,” he said during the DCC meeting, referring to Landbank president-chief executive officer Cecilia Borromeo.

Borromeo confirmed this during the DCC meeting, and thanked the Bangko Sentral for clearing the way to the remote opening of accounts in the OF Bank.

“So we are on our way, Secretary Dominguez, to making OF Bank a fully digital bank by end of June as promised to you,” she said.

The lady LandBank chief earlier reported to the Finane chief that the BSP already granted last Jan. 30 a “No Objection” Clearance to the OFBank on its use and implementation of a Digital Onboarding System with Artificial Intelligence facilitating an electronic Know-Your-Customer  process.

A joint initiative of the DoF and the LandBank,  the OFBank is the fulfillment of a 2016 presidential campaign promise of then-Davao City Mayor Rodrigo Duterte to overseas Filipino workers to put up their own bank when he becomes President.

In September 2017, the President signed Executive Order 44 authorizing LandBank to acquire the Philippine Postal Savings Bank so it could be converted into the OFBank. The OFBank is classified as a savings bank of LandBank.

Borr said that overseas Filipinos with Postbank accounts who migrated to OF Bank were issued EMV-enabled VISA Debit Cards they could use for automatic teller machine withdrawals, fund transfers, bills payments and online purchases, among others.

Dominguez has envisioned the OFBank to be a digital-only facility to make it easy for overseas Filipinos to access a wide array of financial and investment products.

Through the OFBank, overseas Filipinos would be able to invest in their own country that they have helped transform into one of the fastest-growing economies in the region, he said.

He said the OFBank could be the ideal vehicle for the country to “leapfrog” to the digital economy.

The e-invoicing program, meanwhile, is part of the efforts of the Bureau of Internal Revenue to digitalize its tax administration and collection system.

The Republic of Korea has extended a grant through the Korea International Cooperation Agency to fund the pilot stage of the bureau’s e-invoicing system.

Dominguez said the e-invoicing system would complement the Duterte administration’s Comprehensive Tax Reform Program  to make the tax system simpler, fairer and more efficient.

The e-invoicing system would also translate into more convenient, reliable and transparent services for taxpayers, and set the stage for world-class tax administration in the country, he added.