Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. favors the easing of the bank secrecy law under certain conditions to effectively prevent the recurrence of money laundering activities in the country in the future.
At the sidelines of the Chamber of Thrift Banks annual convention held at Dusit Hotel in Makati City Friday, Tetangco said preventive measures were needed to make sure these kinds of illegal activities would not happen again.
“If you look at this, assuming it is an adequate legal framework, we have to make sure that the prevention aspect would be there. Because when a case reaches AMLC, that is where investigation begins. So the incident has already happened and we need some kind of preventive measures,” Tetangco said.
“The prevention of this particular activity is being hampered by the very strict bank secrecy law. I’m for the lifting of the bank secrecy law… easing or lifting under certain conditions,” Tetangco said.
The biggest single money laundering activity in the country recently surfaced, involving $100 million that entered the financial system allegedly through a branch of Rizal Commercial Banking Corp. in Makati. A report further said the funds were sold to a black market foreign exchange broker, brought to three casinos and subsequently taken out of the country.
Tetangco also said as the investigation went on and if the findings would show that further action had to be taken, the Anti-Money Laundering Council “is prepared to do that.”
“But I don’t want to give specifics right now. I’m constrained from discussing on the specifics about any case because of the confidentiality provisions under existing laws. But in principle, if there is liability discovered in the course of investigation, then the appropriate action should be taken,” Tetangco said.
He said the principles of AMLC applied to its covered institutions, be it a specific bank or specific remittance company.
Tetangco, however, did not say if there could be any chance of recovering part of the foreign funds illegally transferred to domestic banks recently before these were taken out of the country.
“I don’t want to give specifics in this particular case. The investigation is still going on. As you know, we have already frozen certain bank accounts. Those are being looked at or looked into,” Tetangco said.
Tetangco, however, downplayed any potential impact on the standing of the country’s banking system or a possible ratings downgrade from major global credit rating agencies.
“If you look at the behavior of the financial markets for the last several days, there has been no indication that there is a negative impact. In fact, the peso has been appreciating in the last few days. Bond markets [are] steady, the PSE [Philippine Stock Exchange] has been steady and sometimes going up,” Tetangco said.
“But we have to recognize that there is a risk associated with this. Therefore, we need to address this. We have to show that there is action being taken with respect to any particular case and with respect to any further strengthening the legal framework,” Tetangco said.