Remittance flows are not affected by the $81-million money laundering involving a Philippine bank and a remittance company, Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla Jr. said Tuesday.
Espenilla, however, said the $81-million heist was a cause of concern in the remittance sector.
Espenilla said during the fourth Senate hearing on the biggest money laundering in the country Bangko Sentral had not received reports of any increase in remittance transactions cost yet.
“With respect to this particular development, there is no evidence yet that it has affected the cost of remittances. But having said that, it was also pointed out earlier that the Philippines actually is experiencing increasing difficulty… because of the perception on the problems of the environment in the country in terms of money laundering,” Espenilla said, in response to a question from Senator Ralph Recto.
Espenilla also said there was no reported slowdown in the flow of remittances. “Some of the remittance companies are having difficulties [on] how to find correspondent banks abroad to deal with them. This development… actually… we cannot connect this [money laundering] to that situation but that situation has been felt and a situation like this [laundering] may make that situation harder,” Espenilla said.
Some $81 million worth of funds deposited by Bangladesh’s central bank in the New York Federal Reserve was reportedly stolen by computer hackers and wired to a branch of Rizal Commercial Banking Corp. in February this year. The money was reportedly converted into pesos by remittance company Philrem Service Corp., before the money found its way into several casinos.
Recto said overseas Filipinos and their families in the Philippines should not worry because there was no collateral damage yet from the $81-million money laundering activity, such as difficulties in sending money and increase in remittance cost.
A representative of Philippine National Bank also said during the hearing the bank did not increase remittance cost as of the moment.
Rizal Commercial Banking Corp. president and chief executive Lorenzo Tan, who was on leave after his bank was linked to the money laundering issue, said that “we have not seen evidence that cost has gone up.”
Bangko Sentral Deputy Governor Diwa Guinigundo earlier said the bank regulator was closely watching the flow of foreign exchange in the country.
Guinigundo said he remained optimistic the 4-percent growth target for remittances this year would remain achievable despite recent reports that several foreign banks discontinued their partnerships with money transfer operators servicing overseas Filipino workers.
The Finance Department said earlier it was pushing for changes in the Anti-Money Laundering Act after several foreign banks cut ties with money transfer operators servicing migrant Filipinos. Finance Secretary Cesar Purisima said amending Republic Act No. 9160, or the Amla law, was urgent to protect the remittances of migrant Filipinos.
Latest data from Bangko Sentral showed that remittances in January rose 3.4 percent to $2.022 billion from $1.956 billion a year ago. The January expansion was slower than the 4.9-percent growth in December when cash remittances hit a record $2.47 billion.