Congress holds the key to exiting ‘gray list’

I refer to the commentary published in this paper about the Philippines once more failing to exit the Financial Action Task Force (FATF) “gray list” (“Exiting the ‘gray list’,” 7/17/24).

A country in the “gray list” means it is under increased monitoring. As of June 2024, the Philippines counts itself as one of the 21 countries or about 10 percent of countries in the world under the gray list. Being placed on this list has tangible consequences for a country’s economy and financial system such as restricted cross-border transactions, leading to difficulties for a state obtaining credit, and limiting inward foreign investment. In other words, they hurt the economy impacting the poor the most.

In January last year, then Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla, who chaired the Anti-Money Laundering Council (AMLC), noted the lack of action on easing the bank secrecy law, resulting in the low number of cases filed against violators of anti-money laundering and terrorist financing and their eventual conviction as may be gleaned from most if not all of the blue ribbon committee investigations going nowhere. The BSP added that the Philippines is one of three remaining countries in the world with ultra secrecy in bank deposits.

Republic Act No. 1405 or the bank secrecy law prohibits any person from disclosing to any person any information relating to the funds, assets, or properties belonging to a depositor except on either of two conditions: (1) when waived by the depositor; or (2) when a court order is issued.

A third exception, recommended by the BSP, involves cases where the inquiry or examination is made by the central bank, 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. Simple.

We need to realize we have far more serious threats internal to our country over and above external threats such as China’s encroachments and near acts of war in the West Philippine Sea.

The revered Douglas MacArthur once said in his speech before the Texas State Legislature in 1951: “Talk of imminent threat to our national security through the application of external force is pure nonsense. Our threat is from the insidious forces working from within.” He may have been referring then to deceptive and powerful organizations within the United States using potential global threats as an excuse to put aside founding American principles.

The Philippines today, more than ever, is in this very deep hole.

We have deceptive and powerful persons in and out of our institutions who erode the safety and security of Filipinos and taint the country’s image in the eyes of the global community by opening up offshore gaming operations in the country, accommodating Chinese illegal and criminal activities, and by aiding China’s creeping invasion in the form of acquisition of massive chunks of real estate with dummies and assisting the influx of thousands of Chinese, some taking up residence and citizenship and taking over businesses. This involves corruption on a grand scale and illicit money passing through banks that cannot be investigated.

Worse still, we have institutions that ignore their sworn constitutional duty to establish a government with which we can build a just and humane society by failing to stamp out corruption, which is possibly the biggest bane in our life as a nation and the most pernicious obstacle to our achieving of full human development.

Money always leaves a trail.

Congress must do its part and pass the long-languishing bill easing the bank secrecy law to first and foremost promote the common good and, once and for all, address the preeminent gap in the FATF.

Norman V. Cabrera,

president,

Kapatiran Party