Manila: Leyte 1st District Rep. Ferdinand Martin Romualdez has introduced a bill aimed at modernizing the country's Bank Secrecy Law, with the goal of empowering regulators to more effectively combat corruption, fraud, and other financial crimes that erode public trust.
According to Philippines News Agency, House Bill 7, filed by Romualdez at the start of the 20th Congress, proposes amendments to Republic Act (RA) 1405. These amendments would permit the Bangko Sentral ng Pilipinas (BSP) to scrutinize bank deposits, including foreign currency accounts, under stringent and limited circumstances where there is a reasonable suspicion of illegal activity.
Romualdez emphasized that the original intention of the Bank Secrecy Law was to encourage savings and bolster banking confidence. However, he pointed out that its outdated provisions have been manipulated to conceal criminal activities, thus hindering regulators and investigators from uncovering misconduct.
'In its current form, the law is being used to shield illegal acts, such as money laundering, tax evasion, and corruption. That needs to change,' he stated in a statement released on Wednesday.
The proposed legislation grants the BSP the authority to examine deposits when its Monetary Board identifies reasonable grounds to suspect fraud or financial misconduct involving bank officials, stockholders, employees, or individuals linked to entities under BSP supervision.
House Bill 7 also includes provisions for investigating closed banks and extends to foreign currency accounts, with the exception of those in member-based thrift associations.
To safeguard against misuse and protect the privacy of law-abiding depositors, any findings by the BSP will be strictly for internal use and shared only with designated agencies such as the Securities and Exchange Commission, Philippine Deposit Insurance Corp., Anti-Money Laundering Council, Department of Justice, or the courts, and only when legally warranted.
The measure provides clear definitions of what constitutes 'deposits' and guarantees full protection to banks and financial institutions that comply with lawful BSP directives. No bank, officer, or employee will face liability for good-faith compliance.
Conversely, unauthorized disclosure of any information will incur severe penalties, including imprisonment of two to ten years and fines ranging from PHP50,000 to PHP2 million, to maintain system integrity.
'We want to send a clear message: the Philippines should no longer be a safe haven for dirty money,' Romualdez declared. 'If we want honest governance and a stronger financial system, we must update our laws and give our regulators the tools they need to protect the people's money.'
House Bill 7 has been co-authored by Tingog Party-list Reps. Andrew Julian Romualdez and Jude Acidre.
