BSP caps cash bank withdrawals at P500,000/day

MANILA, Philippines — Amid the flood control corruption scandal, the Bangko Sentral ng Pilipinas (BSP) has imposed tighter rules on large-value cash transactions, capping withdrawals and similar payouts at P500,000 per banking day unless supported by enhanced due diligence measures.

In Circular 1218 signed by Governor Eli Remolona Jr., the BSP directed banks and other BSP-supervised financial institutions (BSFIs) to adopt stricter safeguards against money laundering, counterterrorism financing and proliferation financing amid increasing risks of illicit fund movements.

The new regulation requires large cash payouts exceeding P500,000, or its equivalent in foreign currency, to be made only through traceable channels such as check payments, fund transfers, direct credit to deposit accounts or digital platforms.

“Large value payouts (e.g., withdrawals) of more than P500,000… shall only be made, facilitated, or transacted through check payment, fund transfer, direct credit to deposit accounts, and/or other form using the digital payment platform of the BSFI,” the circular stated.

Cash transactions beyond the threshold will be allowed only if the client undergoes enhanced due diligence (EDD) and submits additional identification documents or proof of legitimate business purpose.

The BSP stressed that BSFIs must monitor accounts closely, file suspicious transaction reports and review business relationships if customers fail to comply with EDD requirements or if red flags are detected.

The policy forms part of BSP’s response to its latest sectoral risk assessment, which flagged money laundering and terrorism financing risks linked to heavy cash transactions. Regulators noted that the use of cash remains a key channel for illicit financial flows.

The new rules will take effect 15 calendar days after publication in the Official Gazette or in a newspaper of general circulation.