MANILA, Philippines — The country’s largest business group yesterday called on lawmakers to prioritize the passage of amendments to the Bank Secrecy Law to prevent the flow of illegal money through the financial system.
In a statement, the Philippine Chamber of Commerce and Industry (PCCI) urged legislators to pass the soonest revisions to Republic Act (RA) 1405 or the Secrecy of Bank Deposits Law to strengthen the fight against tax evasion and financial crimes.
RA 1405 prohibits the disclosure of and inquiry into deposits with any banking institution unless the depositor gives permission or a legal court issues permission to examine a bank account.
“The PCCI believes the government needs stronger monitoring and enforcement tools to fight tax evasion and other financial crimes. And this could only happen if the country’s stringent Bank Secrecy Law is amended,” PCCI said.
According to the PCCI, the government should no longer allow referring to the Philippines in international reports as a haven for tax evasion, money laundering, and corruption.
“Bank secrecy has continued to be cited as a constitutional and statutory right despite causal evidence between the secrecy laws and illegal activities,” PCCI said.
The PCCI said the Bank Secrecy Law needs to be amended to align local banks and financial institutions with the best practices and global standards on transparency.
Likewise, the group said lifting the restrictions on bank secrecy would allow authorities to minimize if not stop the flow of dirty money that would result in the strengthening of the financial system.
“Greater transparency could bolster the country’s reputation as compliant and well-regulated. A transparent financial banking system cultivates trust and represents a commitment to restricting money laundering, corruption, tax evasion and other fraudulent banking schemes,” the PCCI said.
The PCCI stressed that safeguards need to be put in place to avoid abuses and maintain public trust. On one hand, private banks need to embrace accountability not only in sharing information over bank activities where there are suspicions or evidence of criminal activity, but also in restricting access to banking that potential criminals might have before they are able to place and manage illicit funds in offshore accounts,” it added.
Amendments to the law should also include safety nets that would protect honest depositors from harassment and illicit motives, PCCI said.