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AMLC to seek more powers

Legislative agenda includes tackling financial crimes to ensure financial stability
By: - Reporter / @bendeveraINQ
/ 05:18 AM May 06, 2019

NADI, Fiji—The Anti-Money Laundering Council (AMLC) will seek additional powers to combat financial crimes as part of the Bangko Sentral ng Pilipinas’ bigger responsibility in ensuring financial stability, Bangko Sentral Governor Benjamin E. Diokno said.

Diokno, who also chairs AMLC, told the Inquirer on Saturday that the lifting of bank secrecy for tax purposes, as being pushed by the Department of Finance (DOF), was also part of the BSP’s legislative agenda for the upcoming 18th Congress, noting that only the Philippines and Lebanon remained having this restriction.

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But Diokno said that as the recently signed Republic Act (RA) No. 11211 or the amendments to the BSP charter broadened its responsibilities to cover not only monetary policy and bank supervision but also financial stability, AMLC would look at the possibility of expanding its mandate.

“If the lifting of bank secrecy will be passed, it will help us (AMLC) because it would allow us to check all accounts. Right now, AMLC only requires reporting if transactions reach a certain threshold,” Diokno explained.

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Opening up all bank accounts to AMLC scrutiny will serve as a “transition” to possibly uncovering financial crimes, the BSP chief said. “Maybe that’s the key, you have to provide transition.”

It will also help that the amended BSP charter now allows the central bank to issue subpoenas, Diokno said.

“Since we’re responsible for financial stability, even for housing and insurance we can ask for information. Before, they can refuse unless there’s a court order. Now, the BSP can issue a direct subpoena,” he said.

Diokno said a number of bills passed by Congress and subsequently signed by President Duterte during the 17th Congress helped the Philippines secure a higher credit rating from S&P, two notches above investment grade and the country’s highest to date.

Former BSP Governor Amando M. Tetangco Jr., before he finished his second term, had sought the 17th Congress’ approval of amendments to the BSP charter in order to raise the central bank’s capitalization and issue its own debt, among other reforms.

“I think that’s one of the considerations why we were upgraded—these [laws] are structural reforms. The Central Bank Act amendments were 25 years in the making. The national ID system was being pushed since former President Fidel V. Ramos’ administration. And they [S&P] recognized that BSP should be responsible for financial stability. So I think they were impressed that these bills were approved fast. For me, it was a pleasant surprise,” Diokno said.

He added that the bill providing tax exemption to the BSP’s gold purchases from local miners was expected to be signed by the President.

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“It gives the BSP priority, and there’s an incentive to big or small gold-mining companies to sell to the BSP because they are tax-exempt. If they sell gold to others, it will be slapped with a tax. For small mining companies, instead of selling elsewhere, they can sell to the BSP,” he said.

Diokno said the BSP would have a shorter list of legislative priorities for the 18th Congress as it focuses on implementing the laws that already took effect, especially the BSP charter amendments.

While Diokno as former budget chief got into some trouble, especially with the Lower House leadership, in passing the 2019 national budget, he expects a smooth working relationship with the incoming 18th Congress in his new role at the BSP.

“We’re independent from them. We’re expecting a friendlier Congress,” he said.

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TAGS: Anti-Money Laundering Council (AMLC), Benjamin E. Diokno, Business
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