MANILA, Philippines – The Department of Labor and Employment (DOLE) and the Bangko Sentral ng Pilipinas (BSP) have expressed support for the electronic payment of salaries through formal accounts for workers in the private sector.
In a statement issued on Wednesday, DOLE said the e-payment of salaries will help foster financial inclusion of private-sector workers and effectively monitor proper payment of wages.
According to Labor Undersecretary Claro Arellano, a 2017 Global Findex Report found that only 6.6 percent of the country’s private sector wage-earners received their salaries through a formal account which is a deposit or e-money account held in a supervised financial institution.
“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 added.
Although there is no law or regulation yet on the use of e-payments, the department underscored its advantages for employers and workers.
“For the employers, electronic payment of salaries will not only cut the transaction, administration, and overhead costs but will also reduce the incidence of leakages during disbursements,” DOLE said.
“For the employees, meanwhile, a formal account translates to easy access to financial products, including savings, credit, insurance, and investment,” it added.
Among the groups in the workers’ sector identified by the Financial Inclusion Steering Committee which may immediately benefit from the electronic payment of wages are the construction workers, bus drivers and conductors, household workers, factory workers, and workers in the retail and service industries.
The DOLE said the value of the payment of wages and salaries through formal accounts has also been acknowledged in countries such as Thailand, Qatar, India, Finland, Singapore, and Bangladesh.
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