Amid links to stolen Bangladesh fund Phl banks safe from credit downgrade – Tetangco

MANILA, Philippines - The country’s banking system is far from being threatened with a credit rating downgrade, according to Bangko Sentral ng Pilipinas Governor Amando Tetangco.

Tetangco admitted there are risks associated with the unfolding money laundering issue involving an Asian central bank, the US Federal Reserve and a domestic universal bank.

“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,” Tetangco said during the national convention of the Chamber of Thrift Banks (CTB) yesterday.

However, regulators concede the country’s banking system is faced with challenges associated with international money laundering.

“That is why the AMLC (Anti-Money Laundering Council) has been working with Congress to expand the coverage of the law and include other covered institutions like casinos, real estate,” Tetangco told reporters.

CTB president Rommel Latinazo said the group is discussing recommendations on lifting the bank secrecy law, and in the longer term implementing some amendments to the law.

“Yes, maybe lifting some restrictions within the law could be done in relation to the ongoing Senate hearings,” Latinazo said. “But there are a lot of issues or parameters that must be agreed upon before starting serious law amendments.”

Philippine Business Bank chairman emeritus and former CTB president Alfredo Yao was more cautious.

“We must be careful with the bank secrecy law, we might open a Pandora’s box,” Yao said. “It would be better to zero in on certain provisions in the law that may assist the ongoing money laundering hearings.”

Tetangco said it was a good time to revisit both the anti- money laundering and bank secrecy laws.

“We have to strengthen the anti-money laundering framework and make sure not to become a center for money laundering,” he said.

Tetangco refused to answer a number of specific questions related to the ongoing Senate hearings.

“I am constrained from discussing the specifics 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,” he said.