NextGen Day

The House of Representatives struggled to pass a bill on second reading that would have implemented anti-corruption measures in banks and other financial organizations and promoted transparent governance.

In its plenary meeting on Monday, the parliament approved House Bill 7446, which aims to modify Republic Act 1405—the nation’s bank secrecy law—by voice vote.

Irwin Tieng, a Manila representative, and the bill’s author said that in order to solve the unintended implications of bank deposit laws, the law needs to be revised.

“Comparatively to legislation in other jurisdictions, the Philippines’ current bank deposit secrecy restrictions are more restrictive for prudential monitoring. Only Lebanon, of 49 nations evaluated in accordance with the Basel Core Principles (BCP) since 2012, has the same restrictions on prudential supervision as the Philippines. This restriction hinders anti-corruption measures and transparent government, “added Tieng.

Through this policy, the Bangko Sentral ng Philippines hopes to remove obstacles that prevent the effective investigation and prosecution of financial crimes committed by investors, owners, directors, trustees, officers, or employees of enterprises under its supervision.

Along with adhering to international norms for financial transaction transparency, the measure also aims to effectively combat tax evasion, money laundering, and other financial crimes.

The proposal would give the Bangko Sentral ng Pilipinas (BSP) the authority to look into or examine deposits as part of its investigation into closed banks or if there is cause to suspect that an institution’s stockholder, owner, director, trustee, officer, or employee, representative, agent, related party, or conspirators have engaged in fraud, a serious irregularity, or illegal activity.

The BSP, Securities and Exchange Commission, Philippine Deposit Insurance Corporation, Anti-Money Laundering Council, Department of Justice, and the courts shall be the only parties permitted to use the findings of bank exams.

For actions taken in line with a BSP order of inquiry or examination of deposits, there is a safe harbor provision that shall shield banks or financial institutions, their directors, officers, or employees from any action, claim, demand, or obligation.

It forbids BSP officials and financial institution staff from revealing any deposit-related information to anyone save those who are legally permitted to receive it.

It is prohibited to use the Bank Secrecy Law as a tool to stifle competition in business and trade, for the goal of persecuting or harassing someone, or for any other similar purpose.

Depending on the circumstances, the court may sentence any individual or organization found guilty of breaking the legislation to a term of imprisonment of no less than two years nor more than ten years, or to a fine of no less than PHP50,000 nor more than PHP2 million, or to both.

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