ID card with Philippine Flag

FilSys: What Are The Financial Implications Of A National ID System?

Perhaps, the only country in Southeast Asia that hasn’t imposed a national ID system yet is the Philippines. Neighboring countries such as Indonesia, Malaysia, and Singapore have had one in place for a long time now, which is not just used for their identification but also for keeping track of their a citizen’s information deemed as necessary.

What is the National ID system all about?

The bill that was recently passed states that the national ID system of the country will be called the “Filipino Identification System” or “FilSys.” It’s a single ID card that can be used as a proof of identification for all transactions in the country, whether it’s by a government agency or a private institution. Once this is implemented, Filipinos both here and abroad will be required to register.

How does it work?

In this national ID system or the FilSys, the person should declare his or her name according to his or her birth certificate, photograph, gender, blood type, and signature. The ID will come with its own unique serial number, which will be called the Common Reference Number (CRN). The reference number will be issued by the Philippines Statistics Authority (PSA).

What information will be stored here?

This tamper-proof ID will be housing a smart chip that contains unique information associated to a person like his biometrics, iris scan, facial image reception code, and many other distinguishing features.

Other government-issued identification numbers such as the following will also be associated with the person’s designated CRN:

  • SSS
  • Pag-ibig
  • PhilHealth
  • Passport number
  • Voter’s registration
  • Tax Identification Number (TIN)
  • Driver’s license number

Data privacy and confidentiality

Legislators who opposed this move by the government were concerned about the safety of everyone’s personal information from data leaks and other security attacks. However, Sol Aragones, the committee chairperson assured the public that the only agency that will have access to the information will be the PSA.

The bill made it clear that the information in the FilSys, despite being in the safekeeping of the PSA, cannot be disclosed to any requesting agencies without the consent of the ID holder, unless it falls under the following situations:

  • In cases of accidents or disasters, where the ID holder’s medical history is needed by medical workers
  • When the interest of public health or safety requires the data
  • A court orders the data to be divulged

The bill also states that PSA, the Department of Information and Communications Technology, and the National Privacy Commission must implement measures that will guarantee the safekeeping of the information.

The benefits of a national ID system

The main goal of this ID system is to streamline transactions, lower the cost of government-related ID application, and ease and convenience for all transactions. How does it work?

1. Streamlined information

With a single ID for everything, all the information about a citizen are associated to his or her national ID number or CRN. From the basic personal information like birthday, address, phone number to your driving records, criminal records, and loans, a national ID system will provide access to these information to relevant agencies authorized by the person. This will not only streamline information, but also transactions be it with the government or private organizations.

2. No need for other “valid IDs”

Currently, we have separate IDs for SSS, Philhealth, Pag-ibig, and even for our tax and voter registration. While it makes sense to have a separate ID for each because they are after all different agencies of the government, it would be practical and more efficient if they’re all associated to a single ID.

Once a national ID system is in place, government and private agencies will no longer need other IDs to verify a person’s identity. Verification can already be done easily through the automated system which will come together with the implementation of the FilSys. From airports to banks, there’s no need for you to stress about bringing a number of valid IDs just to get your transactions going (which is a typical scenario in the country).

3. Faster ID verification

The provision of the FilSys will guarantee a fool-proof and highly secured process of identification according to Arnie A Teves Jr, a congressman. This will be made possible with the government’s initiative to gradually install biometric machines in all of its relevant agencies. Your trip to SSS, Philhealth, Pag-ibig, or whatever government agency will be less of a hassle once the national ID system is in place.

How will it impact your banking experience?

Identification  plays an important role in managing your finances through your bank account. When you pay using your credit card, establishments will ask for a valid ID before running your card to charge you. When you do a transaction in a bank, you’ll need various IDs to verify your identity. With a more streamlined process of verifying a person’s identity through the FilSys, the experience will be more seamless.

1. Prevention against identity theft and fraud

It has been made clear that together with the national ID system, biometric machines will be installed in relevant government agencies. Also, state of the art technology is used for the national ID to make sure that it cannot be replicated or used by others.

The smart chip embedded in the ID will contain unique information associated to a person like his biometrics, iris scan, facial image reception code, and many other distinguishing features.

This will reduce identity theft, especially when it comes to availing banking or credit products, which can have dire consequences for the victims.

This security measure may not happen immediately once the FilSys is implemented, but once the system, its infrastructure, and the technology have been fully established, people will surely reap the security benefits that come with it.

2. Financial inclusion for everyone

During the summit on Financial Inclusion in the Digital Economy hosted by the ADB, according to Rochelle Tomas, the Inclusive Finance Advocacy officer of Bangko Sentral ng Pilipinas (BSP), “One of the key barriers to financial inclusion in the country is the lack of a universal national ID and private industry has also identified it as one of the major costs in getting people on-board the financial system”

Currently, BSP has a very strict policy when it comes to opening a bank account in the country. It requires at least one photo ID together with other proofs of identification. While employed individuals could easily obtain valid photo IDs such as an SSS ID or UMID, and other official documents to verify their identity; the unemployed population on the other hand does not have access to those. With a national ID system coming close to its implementation, it will be a lot easier for the unemployed and unbanked Filipino to start banking.

As the country’s ID system heads towards a streamlined and automated process, everyone will  benefit from it in a number of ways. Not only will it cut the unnecessary bureaucratic process in many public and private agencies short, it will also make many services from the private sector more inclusive to more Filipinos. At the end of the day, FilSys will make day-to-day transactions of Filipinos less of headache.

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