The Bangko Sentral ng Pilipinas (BSP) wants elected and appointed government officials to sign waivers allowing authorities to look into their bank accounts, instead of amending the law, to remove their exemptions from provisions of the Bank Secrecy Act covering suspicious transactions.
BSP Governor Amado M. Tetangco Jr. raised this option on Monday, as the Senate Committee on Banks, chaired by Sen. Francis G. Escudero, opened hearings on pending bills seeking to amend the New Central Bank Act and the secrecy of bank deposits law.
“Actually, the proposal of the BSP is to relax the bank-secrecy law so that the BSP can further strengthen its enforcement powers,” Tetangco told reporters after the hearing.
He clarified that “the BSP is asking for authority from Congress to be able to look into bank accounts in the course of bank examination, when there is a reasonable ground to believe that fraud, unlawful activity, or irregularity has been committed or is being committed and being able to look into bank accounts would establish that such [is the case].”
Tetangco aired his concern “about the Philippines being one of the very few countries that have bank-secrecy laws and that the regulator is not exempted from the bank-secrecy law.”
The BSP chief admitted that bank regulators were having difficulty enforcing the law, citing their experience that “when fraud is committed, the proceeds of the crime will normally be deposited in a bank account and once that happens, the BSP can no longer pursue its investigation because it cannot look into those bank accounts.”
Asked about moves to exempt government officials from coverage of the law, he replied that regulators have yet to fully discuss the matter.
“I think that will still have to be discussed,” Tetangco said, pointing out that “the proposal now is to exempt government officials, elective or appointive; in other words, they will not be covered by bank secrecy, meaning their accounts can be looked into,” he said.
Tetangco, however, cited an “alternative” suggested by Escudero at the hearing.
“As you heard from the chairman of the Committee on Banks, there is another alternative, which is really to ask government officials to sign a waiver that would allow authorities to scrutinize bank accounts of public officials,” he said.
“Our concern, as far as bank-secrecy law is concerned, is for BSP to be able to strengthen its power by being able to look into bank accounts when irregularity has been committed,” Tetangco said.
He suggested that safeguards could be included in the remedial legislation to prevent potential abuse. “In our case, the safeguards would be that the secrecy law will be relaxed under certain specific conditions, as I mentioned: if there is reasonable ground to believe that fraud or unlawful activity or irregularity has been committed, and that there has to be a provision [imposing] sanctions for those who violate that particular provision.”
Escudero, in a separate interview, indicated that the committee is mulling over options to either “repeal or amend” the existing law. “That will be the direction.”
The senator said another option is for Congress to pass an amendment to the law requiring a public official when filing Statement of Assets Liabilities and Net Worth to submit a written waiver in favor of the Bureau of Internal Revenue, the Ombudsman, the Anti-Money Laundering Council and the BSP to look into the deposits of any government official.
“If the official refuses to sign a waiver, then he should not enter government service,” Escudero said, adding: “No one is forcing them to run for public office or accept an appointment to a government post if they do not want to open their bank accounts.”