With six months left in his term as the chief monetary and banking regulator, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. Thursday began a final push to reform the country’s financial system including a proposal to strengthen anti-money laundering laws that will likely be scrutinized thoroughly by lawmakers.
Speaking before members of the Rotary Club of Manila on Thursday, the BSP chief said the measures were meant to strengthen the local banking system, and to align the Philippine practices with increasingly strict international measures meant to combat cross border flows of illicit funds.
“We want to include tax evasion on the list of predicate crimes,” he told reporters, referring to illegal activities that would warrant the Anti-Money Laundering Council (AMLC) to freeze bank accounts of suspected violators and prosecute them.
Tetangco, whose second six-year term at the helm of the central bank ends on July 5, also wants Congress to strengthen the Anti-Money Laundering Act of 2001 to include the Philippines’ growing casino industry under the coverage of the AMLC which acts as the country’s financial intelligence unit.
The move to strengthen anti-money laundering measures gained fresh impetus last year after cyber thieves attempted to steal $1 billion from the Bangladeshi central bank, $81 million of which was successfully funneled into the local financial system through the Rizal Commercial Banking Corp. before disappearing into the local casino industry.
At present, however, there is little evidence to show that Tetangco’s push to strengthen the anti-money laundering law has the support of the Executive, with no less than President Duterte himself regularly criticizing the AMLC and BSP for alleged anomalies which resulted in the 2016 release of bank account information allegedly belonging to then presidential candidate Duterte.
Nonetheless, the BSP chief said he believed there was a “good chance” his final push for reforms would be successful, especially with the support of Finance Secretary Carlos Dominguez III whose department stood to benefit with the decline in tax evasion incidences should a strengthened anti-money laundering law be enacted.
Tetangco also outlined other market reforms he intended to pursue as his term winds down.
This includes policy reforms and advocacies to broaden access to and affordability of financial services, improving the quality and variety of financial products, and promoting competitiveness and efficiency in the financial system.
The BSP chief also wants to strengthen good governance in banks, particularly in managing conflicts of interest, promoting financial transparency and enhancing market conduct.
Most importantly, Tetangco also wants to rein in the activities of non-bank financial firms currently outside the supervisory ambit of the BSP and other government regulators “to enhance consumer protection and consumer protection, and to contain shadow banking [activities].”
Asked about the possibility of serving a third term, Tetangco declined to speculate on the possibility ahead of reported efforts to convince lawmakers to amend the BSP charter to allow for it. Without naming names, however, he noted there are senior central bank officials who would be well qualified to replace him.