BSP chief: Ease bank secrecy to flush out tax evaders, money launderers

The Philippine central bank governor wants Congress to ease the country’s restrictive deposit secrecy laws as part of a broader drive to help authorities flush out money launderers and tax evaders.

In a statement, the Bangko Sentral ng Pilipinas said amending the Bank Secrecy Law—first enacted in 1955—is meant to “make financial institutions comply with international standards on transparency and combat both domestic and global tax evasion, money laundering, and other financial crimes.”

This move, which will be presented as part of a package of priority reforms to the incoming Congress, will “further promote access to quality financial products and espouse the interests of the general public,” the central bank said.

Other proposals include amendments to the financial consumer protection bill and agricultural financing reforms, among others.

“We shall work with the 18th Congress in the legislation of laws that support a strong economy and promote a high quality of life for all Filipinos,” BSP Governor Benjamin Diokno said. “This is the BSP’s vision. But we cannot do it alone. We need the help of various stakeholders to make this happen.”

The financial consumer protection bill aims to provide a comprehensive financial consumer protection regime that consolidates financial inclusion, financial education, good governance, and effective supervision for the purpose of consumer protection.

Reforms to agricultural financing include changes in the Agri-Agra Reform Credit Act of 2009, which mandates banks to allot at least 10 percent of total loanable funds for agrarian reform beneficiaries and 15 percent for farmers and fisherfolk.

Amendments to this law will allow banks to merge their loan allocation to the farm sector as a measure to improve banks’ compliance rate.

Over the past year, the BSP has supported the passage of key laws that helped strengthen its functions as the central monetary authority and primary banking regulator, further promote financial inclusion, and introduce more reforms in the financial system.