Malacañang certifies bank secrecy law amendment as urgent

MANILA, Philippines — Malacañang has certified the urgency of proposed amendments to the bank secrecy law as the Philippines remains the only country in the world that maintains the secrecy of bank deposits.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the proposed Bank Deposits Secrecy Law has been included in President Duterte’s legislative priorities for the 18th Congress.

“We are glad that the President has identified the Bank Deposits Secrecy bill as a legislative priority. In view of this, the BSP will further step up its efforts to coordinate with Congress and other stakeholders for the immediate passage of the measure,” Diokno said.

The bill, which aims to amend Republic Act 1405 or The Secrecy of Bank Deposits Law of 1955, has been referred to the Legislative-Executive Development Advisory Council for prioritization and inclusion in the common legislative agenda of the executive and legislative branches.

The law enacted 66 years ago to encourage people to deposit their money in banks prohibits the disclosure of or inquiry into deposits with any banking institution.

The Philippines is the only remaining country in the world with a bank secrecy law after Lebanon lifted the secrecy on bank deposits late last year.

The actions of the Office of the President were in response to separate communications sent by the BSP requesting that the bill be included in the list of priority bills and certified as urgent by the President.

The proposed law would equip the BSP with tools necessary to prove the commission of fraud, serious irregularity or unlawful activity if reasonable basis exists.

Particularly, this would allow the BSP to effectively fulfill its mandate and enable it to have a holistic examination of a banking institution so that certain risk areas will be considered in assessing a bank’s financial condition, risk management and corporate governance.

The results of the inquiry or examination by the BSP shall not be arbitrarily shared or disclosed but proposed to be for the exclusive use of the BSP.

Nevertheless, the BSP may share the results of its examination with the courts and other regulators if it is necessary to prevent or prosecute an offense or crime.

“This enhances the BSP’s capacity to fulfill its mandate of promoting the safety and soundness of the banking system,” Diokno said.

The central bank is also supporting the proposed amendments in line with the country’s broader efforts to combat both domestic and global tax evasion, money laundering and other financial crimes; to promote harmonious and supportive international relations, and to meet international standards on transparency.

“It also enables compliance with international standards on transparency that will also bolster the public and the global community’s trust in the domestic banking system,” the BSP chief said.

Last June 25, Paris-based dirty money watchdog Financial Action Task Force placed the Philippines on its gray list or jurisdictions under increased monitoring that have committed to resolve swiftly identified strategic anti-money laundering/counter financing of terrorism deficiencies.