THE SECURITIES and Exchange Commission (SEC) said it supports proposals to ease the country’s bank secrecy law, saying the move would strengthen its ability to investigate financial crimes and improve transparency in the Philippine capital market.
“The lifting of the bank secrecy law will sustain our efforts toward strengthening transparency and accountability,” SEC Chairperson Francisco Ed. Lim said in a press release on Wednesday.
Mr. Lim said the strict confidentiality rules hinder investigations and prosecutions of financial crimes.
He noted that access to critical financial information, especially in cases of insider trading, market manipulation, and investment fraud, would greatly enhance the commission’s enforcement capabilities.
“Corruption is a major concern for local and foreign investors alike. It does not only create crippling uncertainties, it translates to real, unnecessary, additional costs of doing business in the country,” he added.
The bank secrecy law has been used to protect bank account owners in cases of violations of Republic Act No. 8799 (Securities Regulation Code) and Republic Act No. 11232 (Revised Corporation Code), which limit the SEC’s enforcement powers, according to the commission.
The same law also prevents the commission from verifying financial information of companies when there are “grounds” to suspect concealment of misconduct, corporate fraud, or noncompliance, it said.
The proposed amendments will grant regulators, such as the Bangko Sentral ng Pilipinas, the authority to investigate deposits when there is reasonable suspicion of fraud, irregularities, or unlawful activities involving key figures in supervised institutions, the SEC noted.
These changes will also enhance the commission’s ability to access bank records and trace funds related to securities violations, speeding up investigations by reducing the need for separate court orders, it added.
“We are optimistic that further easing of bank secrecy — especially relating to securities law violations — can significantly aid enforcement efforts,” the commission chair said.
The proposals form part of a broader government effort to align the Philippines’ financial regulatory framework with international standards set by organizations like the International Monetary Fund and the Financial Action Task Force, which have pointed out that the country’s stringent bank secrecy laws “in some instances” impede anti-money laundering and anti-corruption measures.
“As a corporate and capital market regulator, the SEC welcomes the proposed easing of our bank secrecy laws as a necessary measure to uphold trust and confidence in the Philippine capital market and overall economy,” Mr. Lim said. — Alexandria Grace C. Magno
