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PHL needs to prove measures vs money laundering boosted guard

THE PHILIPPINES has to prove its revised anti-money laundering and terrorism financing measures boosted safeguards and ensure it does not go back to the “gray list” of the Financial Action Task Force (FATF), the head of the Anti-Money Laundering Council (AMLC) said.

“For technical compliance, the question is really on whether we have laws, rules, and regulations. For the AMLA (Anti-Money Laundering Act) amendments and the Anti-Terorrism Act, these laws address technical compliance,” AMLC Executive Director Mel Georgie B. Racela said in an online briefing on Thursday.

“In terms of effectiveness compliance, it’s another matter… We should indicate our effectiveness compliance in the post-observation period report,” Mr. Racela said, noting the FATF report is due for submission “at least first week of April.”

Republic Act (RA) No. 11521 which further strengthened the AMLA was signed by President Rodrigo R. Duterte on Jan. 29 with immediate effectivity, only two days before the Feb. 1 deadline given by the FATF to the country to address gaps in its anti-money laundering and counter-terrorism financing measures.

The law allowed the AMLC to enforce targeted financial sanctions such as asset freezing in relation to the proliferation of weapons of mass destruction and their financing. Its provisions also expanded covered persons to include real estate developers and brokers, as well as Philippine offshore gaming operators

On Jan. 31, the AMLC published the updated implementing rules and regulations of the amended law as well as Republic Act No. 11479 or the Anti-Terror Act of 2020.

“So anything we can add to demonstrate positive and tangible progress in implementing these laws (RA 11521 and RA 11479) before the submission may be included [in the post-observation period report],” Mr. Racela said.

The central bank last year also updated its gauge to determine “dirty money” and terrorism financing risk through the Money Laundering/Terrorism Financing Risk Assessment System. The system uses a four-point rating scale to gauge money laundering and terrorism risks, ranging from low to high.

Factors to be assessed include inherent risk, quality of risk management, self-assessment systems, and the net money laundering/ terrorism financing and proliferation risk in BSP-supervised financial institutions.

Under the new scheme, more supervisory resources will be allocated to BSP-supervised financial institutions found to have higher net risk exposures and those that pose heightened risk to the safety and soundness of the financial system. In this case, BSP Governor Benjamin E. Diokno said the system will contribute to the overall stability of the financial system.

The Philippines was removed from the FATF’s gray list of countries deemed to have lax measures against dirty money and terrorism financing in February 2005, five years after its inclusion in 2000. — Luz Wendy T. Noble

Foreign demand seen to boost nickel industry

THE country’s nickel industry is projected to have a strong year in 2021 as demand from foreign markets is expected to improve despite the coronavirus disease 2019 (COVID-19) pandemic.

Philippine Nickel Industry Association President Dante R. Bravo said the group was optimistic that rising nickel consumption would continue because of the demand from the infrastructure and home appliance equipment sectors, and the electric vehicle industry.

“The mining industry has kept to employ 190,000 people in the entire country and this is very important, especially that the Philippine government is trying to implement economic recovery efforts from the impact of the pandemic,” he said in a statement on Thursday.

Citing data from the Mines and Geosciences Bureau, the industry association said the country’s nickel sector in 2020 produced 18.5 million dry metric tons (DMT), a 14% drop compared with the 21.6 million DMT output the year earlier, due to the strict quarantine measures between March and May that hampered logistics across the country.

Despite the lower output, the group said the nickel industry’s export value improved to almost P25 billion during the January-September period, from P24 billion in the same period in 2019.

Mr. Bravo said the higher export value was due to higher world nickel prices created by the steady demand in China.

For 2020, he said association members contributed almost 50% of the country’s total nickel production, producing a total of 7.9 million DMT with an export value of P11.6 billion based on the bureau’s data.

“The industry is grateful that we were able to perform well despite the pandemic and that we were able to contribute to the economy during these trying times. We’re all aware that a large number of businesses closed down in 2020 and some are closing down this year,” Mr. Bravo said.

Meanwhile, Mr. Bravo said the group’s members spent P166.8 million under the social development management program in Palawan, Zambales, and Caraga region. Under the program, the mining industry provides assistance such as livelihood and education to local communities.

He added that P49 million had been allocated by member companies in 2020 for COVID-19 efforts that were focused on providing food, protective equipment, medicines, and medical assistance to the community and neighboring local government units.

“Some of these efforts included build-up of isolation rooms and testing centers, provision for ambulance, transportation, supplemental supply of thermal scanners, test kits and personal protective equipment to local hospitals as well as provision of food packs, facemasks and hygiene kits to local health workers and frontliners,” Mr. Bravo said. — Revin Mikhael D. Ochave

Google releases videos, poetry aimed at becoming better netizens

GOOGLE Philippines has launched a collection of animated videos and spoken word poetry as part of its 2021 Safer Internet Day celebration which aims to teach digital responsibility and help Filipinos be better netizens and stewards of the internet.

The content — uploaded on Google Philippines’ official YouTube channel — is developed by the youth volunteers of Teach Peace Build Peace Movement (TPBPM), an NGO which aims to build peace online and in vulnerable communities nationwide.

The Safer Internet Day playlist includes five animated videos and five spoken word poetry videos. (Watch the videos here: https://www.youtube.com/watch?v=JAAsONeUBlk&list=PLVoNArkTf3agusmCOzaLktpxNC4hEOjtd)

The themes of the YouTube videos are: kindness; the value of strong passwords and online security; critical thinking, oversharing prevention, and courage online. Google aims to reach over 40 million people and teach them about digital responsibility through the program.

The animated videos were illustrated and animated by Christwin Felix, a volunteer who has been teaching multimedia arts for more than 10 years, while the stories were written by Grace Bufi, a housewife and a passionate storyteller. Ms. Bufi, together with her husband, established the Basa Bookstore and The Storytelling Project, a non-profit organization that aims to spark hope, inspiration, and imagination through storytelling.

“Everyone has a role to play in making the internet a safer environment. We can use our voice, social media accounts, and our skills to promote it to our friends, our family, and communities. All of us can teach it and all of us can actively evangelize the importance of digital responsibility,” Bernadette Nacario, country director of Google Philippines, said during a digital press conference on Feb. 9 held via Google Meet.

Actor Dingdong Dantes and YouTube creator Janina Vela took part in the videos in voiceover roles.

“YouTube creators play an important role in teaching digital responsibility. We can use our voice and platform to raise awareness on how we can all be better stewards of the internet. I hope that beyond Safer Internet Day, we can always practice healthy digital habits online and offline,” Ms. Vela said.

During the 2019 Safer Internet Day, Google and TPBPM launched a campaign called Cyberpeace to teach at least 10,000 high school students about digital responsibility. Amid the pandemic, with the help of several volunteers, the campaign reached more than 416,000 people nationwide through digital means such as social media and webinars. — Zsarlene B. Chua

Robinsons Bank, Pru Life extend bancassurance deal

ROBINSONS BANK Corp. and Pru Life UK have renewed their bancassurance partnership amid an increase in demand for insurance products due to the coronavirus pandemic.

The bancassurance product called IPONsurance has been available to clients of the lender since the two firms inked their partnership in 2018.

“I don’t have the exact number but total balance in the product, it’s already at P500 million. That’s the take-up,” Robinsons Bank President and Chief Executive Officer Elfren Antonio S. Sarte said during the virtual signing ceremony on Thursday.

“For another three years, this alliance will benefit Robinson Bank’s customers by providing them with easy access to Pru Life UK’s solutions that meet their growing protection needs,” Pru Life UK President and CEO Antonio G. de Rosas said.

Pru Life and Robinsons Bank have been working on digitizing their operations during the pandemic and are looking forward to continuing these efforts this year amid the new normal.

“Now we’re planning on strategies to further increase this (take-up of IPONsurance) and push it through our digital channels,” Mr. Sarte said.

Ramon C. Garcia, Vice-President for Bancassurance and Business Development at Pru Life UK, said they have adjusted their operations amid restriction measures.

“It actually gave us the opportunity to fully utilize the digital resources that we have and also provide comfort to our clients who are hesitant to visit the branches. It’s been working to our advantage,” Mr. Garcia said.

Pru Life UK was the second-biggest life insurer in the country in 2019 based on premium income which hit P26.965 billion. — L.W.T. Noble

GNPower Dinginin power plant targets full commercial operation by June — DoE data

THE 1,336-megawatt (MW) supercritical coal-fired power plant of GNPower Dinginin Ltd. Co. is scheduled to begin its full commercial run by June this year, latest data from the Energy department show.

GNPower Dinginin in Mariveles, Bataan is a joint venture of AC Energy, Inc., Aboitiz Power Corp. subsidiary Therma Power, Inc. and Power Partners Ltd. Co. Its two units have an identical capacity of 668 MW each.

In its list of committed private sector-initiated projects in Luzon as of end-December, the Department of Energy (DoE) said that the first and second units of GNPower Dinginin were targeting to “start commercial operations in March and June,” respectively. The list was published on the department’s website on Thursday.

Construction of the Dinginin coal plant is underway, with around 5,060 jobs generated due to the project, according to the DoE.

“The plant and equipment is subcontracted through the EPC (engineering, procurement and construction) contractor to numerous Philippine and Chinese companies,” the department said.

It added that “technical and construction-related matters have been encountered and dealt with, as normal, during the construction phase.”

This comes around three months after AboitizPower announced that the two units of GNPower Dinginin in Bataan are scheduled to start operating commercially around the middle of 2021.

In an earlier statement, the listed firm said that the first unit of the supercritical coal plant is “set to synchronize with the grid by the end of the year (2020) and start operating by the second quarter of 2021.” It added that the second unit “will be synchronized and start earning commissioning revenues by the second quarter of next year (2021).”

BusinessWorld reached out to a source at AboitizPower who confirmed receipt of the questions, but has yet to respond to them as of writing.

Shares in AboitizPower inched down 0.57% or 0.15 centavos to close at P26.30 apiece. — Angelica Y. Yang

Oscars ceremony in April to be live, in person and from many locations

LOS ANGELES — The Academy Awards, or Oscars, ceremony in April will be an in-person event that will air live from multiple locations, organizers said on Wednesday.

A spokesperson for the Academy of Motion Picture Arts and Sciences said in a statement that despite the coronavirus pandemic that has caused havoc in the entertainment industry, the group was “determined to present an Oscars like none other, while prioritizing the public health and safety of all those who will participate.”

“To create the in-person show our global audience wants to see, while adapting to the requirements of the pandemic, the ceremony will broadcast live from multiple locations, including the landmark Dolby Theater.”

The Dolby Theater in Hollywood has been the venue for the Oscars show for a number of years. Normally, hundreds of the world’s top movie stars would gather in the 3,400-seat theater for a live show preceded by a red carpet packed with photographers and camera crews.

Wednesday’s statement said more details would be forthcoming. No host has been announced.

California on Tuesday surpassed New York as the US state with the most coronavirus deaths and the Los Angeles area has been particularly badly hit.

The Academy re-scheduled the 2021 Oscar ceremony, the highest awards in the movie industry from Feb. 28 to April 25 because of the coronavirus pandemic.

Other awards shows in recent months have replaced the usual gatherings at gala dinners and on stage with pre-recorded appearances or virtual events.

The Grammy Awards in January postponed its ceremony to March just three weeks before the scheduled date after talks with health experts and musicians.

The delayed Golden Globes ceremony for film and television on Feb. 28 will take part in both Los Angeles and New York with nominees taking part from locations around the world, organizers said last week.

Nominations for the 2021 Oscars will be announced on March 15. — Reuters

Companies signal some willingness to hire in 2021

MORE THAN a third of companies participating in a study conducted by recruitment firm Michael Page Philippines said they are looking to hire more employees.

In a statement Wednesday, Michael Page Philippines said its Talent Trends 2021 Report found that 35% of companies surveyed are “looking to increase their headcount” in 2021.

The report also found that 45% of employers chose to retain their employees this year even during the downturn in business caused by the coronavirus disease 2019 (COVID-19) pandemic.

Michael Page reported that “56% of companies cited their continued investment in employees by upskilling the workforce with training while 56% turned to the use of automation for basic processes.”

It found strong hiring demand for technology professionals in financial technology, logistics, and consumer platforms.

Michael Page Managing Director Olly Riches said in a statement, “Acquiring and retaining high-potential talent will be crucial to enable companies to build sustainable operations to position for future growth.”

In-demand jobs apart from tech, Mr. Riches said, are in healthcare startups, adding “The talent demand in the healthcare and life sciences industries remain strong, as businesses continue to navigate the challenges of a pandemic and acknowledge the importance of having the right people at the top to maximize their outcomes.” — Gillian M. Cortez

Cua files bill seeking to lift bank secrecy

BPI-bank
BW FILE PHOTO

A LAWMAKER is pushing amendments to the Bank Secrecy Law to lift certain provisions to prevent criminal activities by giving the regulator authority to look into bank accounts.

In a House Committee on Banks and Financial Intermediaries hearing on Thursday, the committee chair Junie E. Cua said he wants to be “extra careful” in amending the 65-year-old law while emphasizing the need to revise provisions in the law as it “is used as a shield” for money laundering and other anomalous activities.

The Bank Secrecy Law currently prohibits the disclosure or inquiry into deposits as these are confidential in nature.

Mr. Cua authored House Bill 8634 amending the law to give the Bangko Sentral ng Pilipinas (BSP) the authority to access accounts for investigative purposes. He said the proposed amendments will give parameters that will need to be satisfied before the BSP can check bank accounts.

“The basic objective is to empower the BSP or to authorize BSP to look into accounts of bank owners or bank stockholders, bank officials, or dummies in order to be able to investigate wrongdoings of that confined set of account holders, namely stockholders of the banks, officials of the banks who the BSP sees and believes that by some machinations, are doing activities that are fraudulent,” he added.

Mr. Cua said the proposal was crafted after the World Bank and International Monetary Fund recommended the relaxing of the strict Bank Secrecy Law.

BSP Senior Assistant Governor and General Counsel Elmore O. Capule said in the same hearing that the “very narrow lifting” of the Bank Secrecy Law will allow the central bank to effectively handle crimes committed by bank personnel. He said during the past three years, over P6 billion involved incidents within bank personnel.

“We’ve had 1,419 incidents relating to deposits. These are crimes and losses and had around 2,200 personnel of banks involved and it amounts to P6.3 billion from 2017 to 2020. We are…alarmed that there are a lot of insider abuses being done in the banks and we do not have the proper legal weapon to ensure that these kinds of abuses are…utilizing bank deposit secrecy as shield,” he said. — G.M. Cortez

PayMaya enters online shopping business

DIGITAL payments firm Paymaya Philippines, Inc. launched on Thursday its platform’s “digital mall” feature, where users can buy products from its partner merchants.

The new feature called Paymaya Mall is expected to “help foster the growth and recovery of local businesses,” Mark Jason Dee, head of PayMaya’s Growth Marketing and Partnerships, said in an e-mailed statement.

The digital payments company added that the innovation is also seen to “boost” e-commerce transactions in the country amid the ongoing pandemic crisis.

It noted that the coronavirus pandemic has drastically affected both consumers and retail merchants.

Among the merchants whose products are now available in PayMaya’s digital mall are Jollibee, McDonald’s, Goldilocks, Rustans, Park Outlet, Mercury Drug, Rose Pharmacy, Landers, AllHome, and Boozy.

“More brands are coming soon as PayMaya taps into its network of over 116,000 merchant touchpoints,” the company said.

PayMaya President Shailesh Baidwan said, “With this initiative, we are bringing our partner merchants closer to our more than 28 million customers nationwide.”

“Consumers, on the other hand, can get their regular shopping done from the convenience and safety of their own homes while enjoying exclusive perks and rewards — all through the PayMaya app,” he added.

PayMaya is a subsidiary of Voyager Innovations, Inc., the digital arm of PLDT, Inc.

Voyager’s portfolio, aside from the PayMaya e-wallet and app for consumers, includes PayMaya Enterprise for end-to-end merchant-acquiring solutions and Smart Padala, which has over 37,000 partner agent touchpoints nationwide.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

A thousand words

MOVIE REVIEW
Portrait of the Artist as Filipino
Directed by Lamberto Avellana

CONFESSION: when I saw Lamberto Avellana’s revered film adaptation of Nick Joaquin’s classic play Portrait of the Artist as Filipino some (mumble mumble) years ago, I wasn’t thrilled. It was an adaptation of a stage play that at first glance looked unapologetically stagy, complete with well-timed entrances and exits, and its actors spoke a Spanish-accented English I’d never heard in a Filipino film before. It was filmed in an understated style, and after the low angles and looming closeups and deep shadows of Gerry de Leon’s Noli Me Tangere and El Filibusterismo felt like a step backwards, a middlebrow work of art.

Viewing this restored version (financed partly by the Film Development Council of the Philippines (FDCP), partly by Mike De Leon, son of the film’s producer Manuel De Leon) and painstakingly rehabilitated by the L’Immagine Ritrovata was a revelation: the image is crisper, the mono sound clearer, the film’s very style effortlessly pellucid, and essential to expressing its theme.

Is much of the film confined to a single location, the longtime residence of the Marasigans? Yes, but it’s a magnificent residence (the 150-year-old Yatco-Yaptinchay house, found by the filmmakers in the town of Biñan, Laguna, now gone), one of those old-style mansions with massive stone foundations, richly dark narra staircase and doors, soaring ceilings, capiz windows, intricately carved furniture, glass chandeliers — if I had to be confined I wouldn’t mind being confined here. Avellana’s camera peers into rooms and hallways, allowing the wood furniture to speak for themselves, standing witnesses to a passing age. It’s Avellana’s response to Hitchcock’s challenge of telling a two-hour story in a confined space, less exhibitionist but drenched in nostalgia — Mike Velarde’s melancholic score setting the mood, the camera barely able to rouse itself from its dreamy lethargy. The lethargy however is a pose: the camera pans and glides and reframes its characters, draws in close to better hear crucial snatches of conversation, but does so unobtrusively, and you must pay attention to know it’s doing anything (the crisp, cleaned-up image helps). Avellana’s camera is a modern intruder to an old shrine — the family patriarch is said to have known the heroes of the Filipino revolution — but so modest a presence you’d think it belonged with the antique furnitures, or was equipment that existed before 1895.

As for the English — Filipino films have used Tagalog dialogue for so long so often it’s jarring to hear exceptions. Avellana’s own Huk sa Bagong Pamumuhay (Huk in a New Life) is narrated by the director himself in English; recently there have been films in Cebuano (Damgo ni Eleuteria [Dream of Eleuteria]) and Ilonggo (Yanggaw [Affliction]), a welcome development. But English for Portrait makes sense; this was 40 years into the American occupation, and Nick Joaquin along with a number of his contemporaries (Bienvenido Santos, F. Sionil Jose) started their careers in this period — writing and speaking in the language was encouraged, even fashionable. And it’s a beautifully melodic form of English, with pronunciation and cadences distinctly Castillan, decades away from the flatter, more Hollywood-influenced speech my generation grew up using.

Joaquin’s play revolves around the eponymously titled painting hung in the Marasigan home; it’s Don Lorenzo Marasigan’s last masterpiece: Retrato del Artista como Filipino, a huge canvas depicting a grim faced Aenas carrying an even grimmer Anchises on his back, away from the burning city of Troy — Don Lorenzo (Pianing Vidal) has bequeathed the work to his two unmarried daughters Candida (Daisy Avellana) and Paula (Naty Crame-Rogers) for them to keep or sell as they see fit. A boarder they have taken into their house, Tony Javier (the reptilian Conrad Parham), has found an American buyer willing to pay $2,000 (around $37,500 in 2020 dollars). Will Candida and Paula sell the painting — sell out in effect — or will they somehow earn enough money teaching Spanish and giving piano lessons to keep themselves afloat? Will they give in to pressure from their more successful siblings Pepang (Sarah Joaquin) and Manolo (Nick Agudo) to put Don Lorenzo in hospital care, sell the house, move out?

Pepang and Manolo represent the ever-practical, constantly disapproving middle class, who see their older sisters as hopelessly out-of-touch eccentrics; they reveal their true motives in a gem of a comic scene where they roam the house squabbling over which furniture will go to whom once the property is sold. Tony Javier and Bitoy (Vic Silayan) are the sleeker, even more predatory younger generation, who are not above using old friendships (Candida and Paula once babysat Bitoy) or even sexual appeal (Paula has a simmering crush on Tony) to get what they want from the spinsters.

Daisy Avellana’s Candida stands above them all. She’s Joaquin’s more demure Blanche DuBois, a faded lady trying to hold the tatters of her dignity together. When Senator Don Perico (Koko Trinidad) visits the pair and makes the gentle but insistent argument that they can better care for their father and themselves by selling the house, Candida responds with a grand appeal to Don Perico’s younger self, to the poet he used to be, composing alongside Don Lorenzo so many years ago. The chastened senator admits that Candida and her father (note the inclusion) stand “contra mundum” — against the world. She’s what Don Lorenzo in his prime must have been like, turning that crumbling mansion into an alternate world where time remains frozen while the rest of the world flows past. She recalls Philip K. Dick’s John Isidore, a social outcast sealed into a dusty apartment with piles of “kipple” (his word for useless junk) about him  — only Candida strikes a more defiant attitude, and celebrates the accumulating kipple.

Naty Crame-Rogers’ Paula acts as Candida’s foil, the more obedient more childlike sibling who takes all her cues from her (presumably) older sister — all the more reason to note her presence, as she quietly and with childlike simplicity breaks out of the sisters’ state of suspended animation and takes direct action.

At one point Senator Don Perico gazes at the old man’s picture and articulates its meaning: that Don Lorenzo can only save himself, there is no next generation to carry his burden for him — as sharply poignant a metaphor for the artist’s loneliness as anything in Philippine literature, and a sentiment Joaquin himself must have often felt. The moment seemed too on the nose at first glance, till I realized what Don Perico wasn’t saying: that the portrait was of Don Lorenzo and his younger self; that the children and wife (who isn’t even mentioned at any point in the play) are absent. That this is also a portrait of self-absorption — a necessary element, I suspect, as most great artists I know or have read about seem to need that bit of egotism to create (“I am special hence what I do is special”). That Don Lorenzo in bequeathing the self-portrait like an albatross on his two spinster daughters is in effect condemning them to a living death — a fate the two sisters ultimately affirm by joining him willingly. That Joaquin with this play reveals more than what he possibly intended about an artist’s thirst for martyred immortality, and how much that immortality costs.

Final note, about the film’s fairly literal style: most stagings of Portrait have the actors peering up at an empty frame, leaving Don Lorenzo’s painting to the audience’s imagination. Avellana gives us a huge canvas stretched across the wall, towering over its viewers. The work itself (conceived apparently by Maning P. de Leon) is impressive, looking somewhat in advance of what art was like in the 1940s (not in the world, not with Picasso around, but at least in the Philippines) — the film may be set before World War 2, but Don Lorenzo apparently has some insight into the future. The literalness grates — why show the painting? Why not continue using that angled shot where Avellana’s camera gazed down on awestruck viewers? The payoff I suspect comes in the film’s climax (skip the rest of this paragraph if you haven’t seen the film!) when childlike Paula does what she feels she must do, take a knife to the canvas. Her blade tearing at the old man’s precious masterwork has a satisfyingly transgressive sound and feel, like a virgin’s underwear being ripped apart — something you don’t get with an unseen painting.

Still perhaps not my favorite Avellana (that would be Badjao, and the pleasurable Pag-asa) but a great film, and for once I fully felt the greatness.

CA rules against ABS-CBN in employee dismissal case

THE Court of Appeals (CA) dismissed a petition from ABS-CBN Corp. to overturn a ruling by the National Labor Relations Commission (NLRC) which had ordered the network to pay compensation to two dismissed employees.

The NLRC in 2018 had ordered the network to pay two former employees, Ellen N. Lagat and Simonette C. Soriano, a total of P697,000 as compensation for their illegal dismissal in 2012.

In its petition, ABS-CBN alleged that the NLRC had committed “grave abuse of discretion” for issuing the order, as the company was still awaiting the decision of the Supreme Court (SC) on a motion for reconsideration.

The CA’s decision, issued on Feb. 4, called ABS-CBN’s claim “devoid of merit” because the SC had not issued a restraining order, which would have barred the NLRC from issuing its order.

The CA added that the principle of judicial courtesy that ABS-CBN’s petition referred to does not apply in this case because the CA and the SC have consistently upheld NLRC decisions on ABS-CBN labor cases.

It added that even if the SC later rules in favor of ABS-CBN, the company could still move for restitution or request a refund of the compensation payout.

The CA noted that NLRC’s February 2012 ruling of illegal dismissal against ABS-CBN became final and executory in April 2013 when NLRC denied ABS-CBN’s motion for reconsideration. — Bianca Angelica D. Añago

US Treasury chief eyes financial innovation to fight the misuse of cryptocurrencies, narrow digital gaps

WASHINGTON — US Treasury Secretary Janet Yellen on Wednesday warned about an “explosion of risk” from digital markets, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequality.

In remarks to a financial sector innovation roundtable, Ms. Yellen said such technologies could be used to stem the flow of dark money from organized crime and fight back against hackers, but also to reduce digital gaps in the US.

She said passage of the Anti-Money Laundering Act in December would allow the Treasury Department to rework a framework for combating illicit finance that has been largely unchanged since the 1970s.

“The update couldn’t have come at a better time,” Yellen told policy makers, regulators and private sector experts. “We’re living amidst an explosion of risk related to fraud, money laundering, terrorist financing, and data privacy.”

The COVID-19 pandemic had triggered more — and more sophisticated — cyberattacks aimed at hospitals, schools, banks, and the government itself, she said.

Cryptocurrencies and virtual assets offered promise, but they had also been used to launder the profits of online drug traffickers and to finance terrorism.

Innovation in the sector could help address these problems while giving millions of people access to the financial system, she said.

Yellen, who has promised to prioritize fighting inequality and disparities, said the pandemic had exposed huge problems, including the dearth of broadband access in many areas of the country.

She said responsible and equitable innovation could make a big difference.

“Innovation should not just be a shield to protect against bad actors. Innovation should also be a ladder to help more people climb to a higher quality of life,” she said. — Reuters