MANILA, Philippines — Big business organizations in the country are pushing for proposed amendments to the bank secrecy law as the Supreme Court approved procedural rules in examining bank deposits and investment activities related to money laundering.
The Makati Business Club, Management Association of the Philippine, Financial Executives Institute of the Philippines, Bankers Association of the Philippines and the Chamber of Thrift Banks, among other groups, expressed full support for the enactment of the Bank Deposits Secrecy bill.
The bill seeks to amend Republic Act 1405, the Secrecy of Bank Deposits Law.
MBC executive director Coco Alcuaz said the private sector has long advocated for lifting the bank secrecy law because doing so would help reduce public and private corruption and facilitate the collection of more taxes, resulting in more funds for much needed services and infrastructure.
“That’s why especially during this crisis, lifting bank secrecy laws is an important boost for integrity and jobs and economic recovery,” Alcuaz said.
A total of 26 groups, including the American Chamber of Commerce of the Philippines, Australia-New Zealand Chamber of Commerce of the Philippines , European Chamber of Commerce of the Philippines, Fintech Alliance PH, Foundation for Economic Freedom, Japanese Chamber of Commerce and Industry of the Philippines, Philippine Center for Entrepreneurship (GO NEGOSYO), Philippine Life Insurance Association, Shareholders’ Association of the Philippines and Tax Management Association of the Philippines, among others, are pushing for the proposed amendments.
“The global trend is to relax bank deposits secrecy laws across jurisdictions to effectively combat both domestic and global tax evasion, money laundering and other financial crimes and comply with international standards on transparency. The Philippines has lagged behind this worldwide trend,” the groups said in a joint statement.
They added the strict deposit secrecy in the country continues to make the Philippines a haven for tax evasion, a protected channel for international money laundering flows, and other illegal financial transactions.
The joint statement added that the country’s bank secrecy laws allow politicians and other government officials to hide unexplained wealth, constraining citizens’ ability to exercise their public duty to elect honest officials.
“It does not promote good governance principles of transparency, fairness and accountability. As a result, the Philippines scores low on the Economic Freedom Index,” they said.
The Philippines is the only country in the world that maintains the secrecy of bank deposits after Libya lifted its bank secrecy law in May last year.
Meanwhile, the Court of Appeals rule of procedures in cases of bank inquiry into or examination of deposit and investment accounts relating to an unlawful activity or money laundering offense under Republic Act 9160 approved by the high tribunal is set to take effect today.
Under the guidelines, the bank inquiry order allows the Anti-Money Laundering Council within 120 days to mandate banks and non-bank financial institutions to give AMLC full and immediate access to all documents and information pertaining to deposit and investment accounts being inquired into.
The guidelines also state that no officer or employee of the concerned bank is allowed to disclose, divulge or communicate to the owner or holders of the accounts being examined to any other person.
Multilateral lender International Monetary Fund (IMF) earlier warned the Philippines could again be included in the gray list of Paris-based dirty money watchdog Financial Action Task Force if it fails to enact amendments to the country’s bank secrecy laws.
The IMF said the country could be reverted to the list of jurisdictions with serious anti-money laundering/counter financing of terrorism deficiencies and exposes the financial system to significant risks without major reforms by June this year.