As published on businessmirror.com.ph, Tuesday 1 June, 2021.
LOCAL businessmen threw their support behind the passage of the amendment to Republic Act 1405 (Bank Secrecy Act) help the government fight tax evasion and other financial crimes.
In a statement last Tuesday, the Philippine Chamber of Commerce and Industry (PCCI) said the country’s bank secrecy law has been referenced in international reports on offshore tax evasion, money laundering and corruption.
The PCCI said despite this, the bank secrecy law has been cited as a constitutional and statutory right despite causal evidence between the secrecy laws and illegal activities.
“The Bank Secrecy Act needs to be amended to align the country’s banking and financial systems with international best practices and meet global standards of transparency, combat illegal financial transactions and promote the safety and soundness of the financial system,” the PCCI said.
Further, the PCCI said safeguards must be put in place to avoid abuses and maintain public trust. They added that private banks must also be more transparent especially when it comes to suspicious transactions.
The PCCI said banks should restrict access to banking by potential criminals before they are able to place or manage illicit funds in offshore accounts.
It added that banks and honest depositors should be protected from the use of the law for harassment or other illicit motives.
Earlier, 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.
In April, 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 E. 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.