A GROUP of 26 financial and economic organizations are pressing for urgent passage of the Bank Deposits Secrecy Bill.
The group, led by the Financial Executives Institute of the Philippines (Finex), said the country’s existing bank secrecy laws weaken the Bangko Sentral ng Pilipinas’ exercise of its mandate of maintaining a sound and stable banking system, as it constrains BSP’s supervisory activities and assessment, especially in cases involving unsafe and unsound banking practices.
“The global trend is to relax bank deposits secrecy laws across jurisdictions to effectively combat both domestic and global tax evasion, money laundering and other financial crimes and comply with international standards on transparency. The Philippines has lagged behind this worldwide trend. Strict deposit secrecy in the country continues to make the Philippines a haven for tax evasion, a protected channel for international money laundering flows, and other illegal financial transactions,” the group’s statement on Thursday read.
“It also allows politicians and other government officials to hide unexplained wealth, constraining citizens’ ability to exercise their public duty to elect honest officials. It does not promote good governance principles of transparency, fairness and accountability. As a result, the Philippines scores low on the Economic Freedom Index,” it added.
Just last month, the BSP also called for urgent reforms in the country’s bank secrecy law, as the Philippines is now the only country in the world to have such measures in place.
BSP Governor Benjamin Diokno said the Philippines needs to change its current framework of bank secrecy in order to keep up with international standards on transparency and to help combat both domestic and global tax evasion, money laundering, and other financial crimes.
“Even countries with strong bank secrecy arrangements like Switzerland, Singapore and Hong Kong authorize their prudential supervisor to access all bank records, including depositor information,” the group said.
“The proposed Bank Deposits Secrecy Bill has wide-reaching implications. The bill will not only strengthen prudential supervision and allow BSP to effectively fulfill its mandate of maintaining stability of the banking system but also ensure compliance with the international standards on transparency and good governance which will preserve and fortify the public and the global community’s trust in the Philippine banking system,” it added.
House Bill No. 8991, the BSP’s version of the law amendment, is currently on second reading at the plenary.
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