With the fintech boom, public agencies warned: Double down on due diligence, avoid dubious contractors

When President Ferdinand “Bongbong” Romualdez Marcos Jr. ordered line agencies to bring critical government services closer to Filipinos through digital transformation initiatives, government agencies were warned to only deal with credible entities that provide good and secure solutions and clean results.

Former PBA Partylist representative Jericho Nograles urged line departments and their sub-agencies to double down on conducting due diligence on potential contractors and partners to ensure that Filipinos are not on the losing side, especially as the government continues to strengthen digital transformation efforts.

In full support of President Marcos’ goal of transforming the Philippines into a more digital nation, Nograles said a whole-of-government approach must be adopted to ensure that digital services are not only safe and secure, but also convenient and affordable for many Pinoys.

“The accelerated digital transformation requires the government to be more careful and thorough in conducting due diligence on its potential partners. The government must ensure that the contractors and partners it brings in are credible and have a clean track record that proves their ability to bring important and critical public services closer to Filipinos, Nograles said.

Nograles noted that he was particularly wary of agencies that lease digital transaction services to fintech players and digital banks, as they have financial implications and involve personal data.

“The government must adapt to the requirements of the new normal, but it must also be careful in choosing its fintech partners. While there are many credible players in the Philippines, there are also those who have proven that they are out to overcharge consumers for personal gain, Nograles said.

During his term as a lawmaker in the last Congress, Nograles dealt with fintech companies and line agencies that bypassed necessary procurement processes and charged Filipino consumers high prices.

In November 2021, Nograles led the Congressional investigation into the irregular contract between the Bureau of Quarantine (BOQ) and PisoPay, a fintech startup that focuses on money transfers and remittance transactions.

To recall, BOQ contracted PisoPay to assist the agency in issuing the International Certificate of Vaccination (ICV), or what is commonly referred to as the “Yellow Card,” which was a requirement for outbound Overseas Filipino Workers (OFWs).

Filipinos applying for yellow cards must pay P370 for a copy, of which P70 goes to PisoPay, a service fee considered irregular as other government agencies only charge P30.

During the series of congressional hearings, Nograles and other lawmakers revealed that PisoPay did not go through the required bidding process and that PisoPay’s net financial capacity was not able to enter into contracts with the government.

This led BOQ to drop the contract with PisoPay.

“The PisoPay-BOQ fiasco was a disservice to the Filipino people. We should not let this happen again, which is why I urge public agencies to be more careful. President Bongbong Marcos was clear in his vision of a flexible bureaucracy through a digital Philippines. We must make sure that we achieve that goal by ensuring that Filipinos are not on the losing end of the trade,” Nograles said.