BSP urges banks to protect system from vote-buying

By Luisa Maria Jacinta C. Jocson, Reporter

THE Bangko Sentral ng Pilipinas (BSP) has urged banks to boost measures against vote-buying and other misuse of funds through digital platforms ahead of this year’s midterm elections.

In a memo dated March 23 and uploaded on the BSP website on Monday, the central bank warned banks of the possible proliferation of vote-buying, vote-selling and abuse of state resources in election schemes.

The memo seeks to “mitigate the heightened risk of the possible abuse or misuse of digital channels.” “The BSP strongly calls for the adoption of enhanced surveillance and monitoring measures to prevent the misuse of financial institutions as conduits for these illegal activities,” it added.

It also urged financial institutions to tighten controls in detecting or preventing the possible influx of fraudulent accounts and transactions as the election date approaches, it added.

“This is actually an instruction not only to the banks but to all platforms,” Commission on Elections (Comelec) Chairman George Erwin M. Garcia said in a speech at the signing ceremony where Comelec and BSP completed the escrow deposit of the final trusted build source codes for the automated elections on May 12.

“This will practically, if not eradicate, then mitigate the existence of vote-buying using these platforms,” he added.

Banks should have appropriate customer onboarding processes, effective fraud management and account and transaction monitoring capabilities to respond to fraudulent activities, the central bank said.

Financial institutions must calibrate these controls to account for possible scenarios such as an unusual volume or value in cash-in or cash-out transactions.

It also cited scenarios such as the concentration of account registrations in areas where abuse of state resources is rampant.

These also include large cash transactions or encashment of checks during the election period and unusual transaction flows between accounts or digital wallets.

Financial institutions must submit suspicious transaction reports to the Anti-Money Laundering Council, it added.

Meanwhile, central bank Deputy Governor Bernadette Romulo-Puyat said completing the escrow deposit of the final trusted build source codes is a key step to ensure that elections are transparent and credible.

“By taking custody of the source code in compliance with Republic Act No. 9369, the BSP reaffirms not only its legal obligation but also its steadfast commitment to supporting clean and transparent elections,” she said in a speech.

Under the law, Comelec must send the source codes to the BSP for safekeeping.

These include the source codes for the automated counting machines, consolidation and canvassing system, election management system, secure electronic transmission system and online voting and counting system.

“The source codes are stored in digital media storage devices after having undergone the full final trusted build international certification and local source code review,” the BSP said.

It also ensures election accuracy, credibility, transparency and auditability in several electronic processes.

These include the counting, consolidation and canvassing of votes; election returns and certificates of canvass; transmission of electronic election results; and management of the automated elections.

The source codes for national and local elections from 2010 to 2022 are also deposited inside the central bank’s vaults.