THE HOUSE of Representatives on Monday approved on third and final reading a measure seeking to allow the Philippine central bank to look into the accounts of bank officers and employees involved in illegal financial activities.
During a plenary session, 270 lawmakers voted in favor of House Bill No. 6707, which aims to empower the Bangko Sentral ng Pilipinas (BSP) to investigate cases of corruption and illicit financing by amending the Philippines’ decades-old bank secrecy law.
The proposed measure also seeks to mitigate cases of tax evasion, money laundering, and other financial crimes, while addressing the unintended effects of bank secrecy.
It also aims to harmonize the country’s laws with international standards on financial transparency.
The measure allows the BSP, with the approval of the Monetary Board, to gain access to the bank deposit accounts of a stockholder, owner, director, trustee, officer or employee of a BSP-regulated entity, including any of the co-conspirators of the person involved.
The central bank is also allowed to probe the foreign currency deposits of all financial institutions in the country as well as their offshore branches. Nonstock savings and loan associations of members are excluded.
All results from bank investigations will only be made available to the BSP, Securities and Exchange Commission, Philippine Deposit Insurance Corp., Anti-Money Laundering Council, Department of Justice, and the courts.
The bill also provides a “safe harbor clause” that protects banks or financial institutions, their directors, officers, or employees from any legal action, claim, demand, or liability in complying with the BSP’s examination.
The proposed law also seeks to ban the use of the bank secrecy law as a means for harassment, political persecution, or as a tool to obstruct fair trade and market competition.
It also prohibits any official or employee of the central bank or other financial institutions from disclosing information concerning bank accounts to any unauthorized individuals.
Violators could face imprisonment of two to 10 years, along with fines ranging from P50,000 to P2 million, or both, at the discretion of the court.
The central bank has been urging Congress to pass legislation amending the Philippines’ tight bank secrecy laws and provide regulators stronger oversight to monitor financial institutions and prevent cases of insider abuse or illegal funding activities.
The bill was earlier included in President Ferdinand R. Marcos, Jr.’s legislative agenda for the 20th Congress, following a Legislative‑Executive Development Advisory Council meeting in October.
Similar measures have also been filed by Senator Joel J. Villanueva, who chairs the Committee on Banks and Financial Institutions, and Senator Erwin T. Tulfo.
Senate Bill No. 1433, filed by Mr. Villanueva, seeks to allow for the disclosure and examination of bank deposits for investigations conducted by the Office of the Ombudsman, the courts, or Congress.
Mr. Tulfo filed Senate Bill No. 1405 that proposed that a competent court or investigating body should examine the bank deposits of public officials.
The bills are currently pending at the committee level.
Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said that the proposed measure would allow authorities better access to suspicious financial records.
“By allowing regulators to pierce bank secrecy in cases of suspected fraud or money laundering, it strengthens our ability to curb corruption and illegal financing,” he said in a Viber message.
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the proposed law can bolster the country’s efforts against corruption and illegal financing.
“It can strengthen anti-corruption and anti-illegal financing efforts by allowing authorities faster and more targeted access to suspicious financial records, making it harder to hide illicit funds,” he said in a Viber message.
Analysts said the House’s approval signals the country’s commitment to sustain efforts to curb money laundering and terrorism financing.
“This reform also aligns the Philippines with global standards, reinforcing our commitment to anti-money laundering measures and helping ensure we stay off the Financial Action Task Force’s (FATF) ‘gray list,’” Mr. Asuncion added.
Mr. Rivera likewise said that the proposed measure would help reduce the risk of the Philippines returning to the FATF’s list through continued enforcement and convictions.
Last February, the Philippines was removed from the FATF’s gray list or the list of jurisdictions under increased monitoring for “dirty money,” following a successful on-site visit and completion of recommended action plans.
The country is set to be reassessed by 2027, where the FATF will verify whether the country’s anti-money laundering measures are being sustained and are still in place. — Adrian H. Halili
