By Katherine K. Chan
THE BANGKO SENTRAL NG PILIPINAS (BSP) said there has been no sign of bank runs despite the freezing of more than 700 accounts and assets linked to the multibillion-peso fraud in government flood control projects.
“I can say this with confidence: No bank runs,” BSP Governor Eli M. Remolona, Jr. told Money Talks with Cathy Yang on One News on Thursday.
The scandal, which officials have described as unprecedented in scale, has prompted investigations into the Department of Public Works and Highways (DPWH) and its contractors.
“This flood control scandal was as much of a shock to us as it was to you, but we’re working hard to fix things,” Mr. Remolona said. “We knew there was corruption all along, but not [at] this scale.”
The Anti-Money Laundering Council (AMLC) has frozen hundreds of assets, bank accounts and insurance policies tied to contractors and DPWH officials implicated in the scheme. The BSP has begun probing the frozen accounts under its authority granted by the Anti-Financial Accounts Scamming Act.
Mr. Remolona said early findings showed that most of the questionable transactions were funneled through government-owned banks. “That makes sense because it’s government money,” he said.
The central bank plans to adopt artificial intelligence (AI) tools to sift through suspicious transaction reports filed by banks.
Lenders must report cash or noncash transactions above P500,000. “As far as we know, the banks have been following the rules,” the BSP chief said. “They have reported those transactions.”
He added that AI could help the BSP “connect the dots” between reports and speed up the process of identifying possible money laundering.
The BSP has been providing data to the Independent Commission for Infrastructure (ICI), which is leading the state probe into ghost projects and diverted funds.
“We’re cooperating with the ICI. I’m not sure who was first (to give data), but we were always ready to provide it. We weren’t waiting to be asked,” he added.
The scandal comes as regulators work to avoid renewed scrutiny from the Financial Action Task Force (FATF), which monitors dirty-money risks. The Philippines was removed from the FATF’s “gray list” last year, but online gambling operations and the flood control probe have raised concerns.
“Unlike before, we’re now being more proactive, doing things before the FATF tells us,” Remolona said. “In the past the FATF would tell us what to do with a list of action items and then we have to fulfill it. Now, we’re doing things before they tell us.”
Last week, the BSP imposed a P500,000 daily limit on cash withdrawals, part of a broader effort to curb large-scale laundering activities.
