EASING THE BANK secrecy law should be an immediate priority to demonstrate a commitment to transparency and toughening regulation of money laundering, corruption, and tax evasion, according to the Philippine Chamber of Commerce and Industry (PCCI).

“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,” the country’s largest business organization said in a statement Tuesday.

House Bill 8991 amends Republic Act No. 1405 or the Secrecy of Bank Deposits Law. The measure will expand the supervisory powers of the Bangko Sentral ng Pilipinas (BSP) by allowing it to look into the deposit accounts of bank shareholders, owners, directors, officers or employees in the course of investigating closed banks, given reasonable grounds to suspect fraud, serious irregularity or unlawful activity.

The loosening of bank secrecy conditions will be applied to deposits as defined by the Philippine Deposit Insurance Corp., as well as foreign currency deposits of banks operating in the Philippines and offshore branches of Philippine lenders.

“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 group, however, cited the need for safeguards to avoid abuse and maintain trust. They said this will be possible when banks “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.”

“On the other hand, banks and honest depositors must also be protected from the use of the law for harassment or other illicit motives,” it added.

Other industry groups earlier expressed support for the amendments, including the Financial Executives Institute of the Philippines, Bankers Association of the Philippines, Chamber of Thrift Banks, and the Makati Business Club.

BSP Governor Benjamin E. Diokno has said the bank will ask President Rodrigo R. Duterte to certify the bill as urgent.

He said the International Monetary Fund (IMF) and the World Bank have singled out the Philippines and Lebanon for having strict bank secrecy laws that hamper anti-money laundering efforts. He noted, however, that Lebanon eased its bank secrecy law in May 2020, leaving only the Philippines with such strict protections.

In April, the IMF flagged the possibility of the Philippines being included in the list of jurisdictions that the Financial Action Task Force deems to have serious anti-money laundering and counter-terrorism deficiencies if no major reforms are implemented by June 2021. The IMF said easing the bank secrecy law will strengthen the BSP’s supervision powers, boost guards against “dirty money” and terrorist financing, and improve ties with foreign authorities. — Luz Wendy T. Noble