Ease bank secrecy before Cha-cha

Corruption is perhaps the biggest bane in our life as a nation and the most pernicious obstacle to achieving economic freedom. Corruption ruins the rule of law, retards needed infrastructure, and obstructs the ease of doing business.

The economic Charter change and the other necessary conditions for attracting foreign direct investments involve tasks independent of one another. The easing of our bank secrecy law ought to come first. It is vital to go after the corrupt and to shape transparency in our country’s governance.

Can corruption be eradicated in the Philippines? While none or nobody has achieved it so far, ending corruption necessitates policies directed against corruption.

Amending the decades-old Republic Act No. 1405 or the 1955 bank secrecy law could well be our biggest leap toward economic freedom.

When asked during a hearing of the Senate committee on banks in 2016 if the Bangko Sentral ng Pilipinas would support a repeal of the bank secrecy law, then BSP chief Amando Tetangco Jr. replied: “Our main concern, Mr. Chairman, with respect to the bank secrecy law, is in terms of being able to ensure that existing regulations are being complied with. That’s number one. And number two, to provide some form of deterrent for possible fraud, unlawful activity, or irregularity …” He added: “The Philippines is one of only three remaining countries in the world with such ultra secrecy, the other two are Lebanon and North Korea.”

Speaking at a Financial Executives Institute of the Philippines special membership meeting in August 2022, then BSP Governor Felipe Medalla said the central bank was requesting and needed support for more authority so it could examine suspect bank accounts, particularly those possibly linked to illegal activities.

According to the International Monetary Fund, the Philippines would be able to remove itself from the Financial Action Task Force’s “grey list” by revising governing bank secrecy rules.

At present, no one can access records of banking transactions except in two instances: via a court order or by waiver of the depositor. A third exception introduced in House Bill No. 8991, approved at the committee level in the 18th Congress, involves cases where the inquiry or examination is made by the BSP, provided that, there is a reasonable ground to believe that fraud, serious irregularity, or unlawful activity has been or is being committed by persons, and that it is necessary to look into the deposit to establish such fraud, irregularity, or unlawful activity.

In this 19th Congress, HB 7446, which is similar to HB 8991, has already been approved on third reading. In the Senate, Senate Bill No. 1839 filed by Sen. Sherwin Gatchalian is currently pending in the committee on banks and financial institutions and currencies.

The duty to establish a government that shall promote the general welfare of the nation is an accountability not just of our leaders but more importantly of each one of us, collectively. Only in working together can we influence Congress to undo corruption by passing an amended bank secrecy law. There is no better alternative.

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Norman Cabrera is a president of the National Council of the Kapatiran Party.