MANILA, Philippines— Senators on Wednesday frowned on a proposal that would require the mandatory reporting of a person buying a P1 million real estate in cold cash.
During Wednesday’s hearing of the Senate committee on public services, Anti-Money Laundering Council Executive Director Mel Georgie Racela disclosed the P1 million threshold for real estate transactions agreement they would propose to be covered by the Anti-Money Laundering Act (AMLA).
“That was the result of our committee hearings in the House of Representatives where we reached the threshold of P1 million cash transaction,” Racela said, responding to queries of Senator Grace Poe, who heads the committee.
“To illustrate, this is a customer or a buyer of the real estate bringing in P1 million cold cash to purchase a real estate,” he further said.
But some senators questioned the proposal, which Senator Imee Marcos branded as “absurd.”
“P1 million can’t be the threshold. You ask real estate developers. Today, what is low-cost housing, or socialized housing…” Senate Minority Leader Franklin Drilon asked.
“P1 million is simply too onerous and burdensome. That’s 20,000 dollars. Can you please tell me Mr. AMLC, in other jurisdiction, ano po ang mabibili ng bahay na 20,000 dollars?” Drilon later said.
Poe agreed with Drilon, noting the number of reports the AMLC would receive if each real estate agent and broker would do the reporting.
“There’ll be like hundreds of thousands probably in a week ?” Poe asked.
The committee was earlier told that the latest records showed about 11,000 registered salespersons and about 31,000 brokers in the real estate industry.
For her part, Senator Cynthia Villar explained that in 2005, the cost of a house was already P3 million.
“If you adjust inflation… it should be more than P4M. Kasi noong 2005, if we have an inflation rate of 2.5 percent e more than P4M na iyon,” Villar said.
“E puro ano iyon e para sa mahihirap na Pilipino. Nagma-money laudendering ba yun? Maloloka ako,” she added.
Before this, the senators also questioned the proposed inclusion of the agents and brokers in the AMLA’s coverage when real estate transactions are available in the Register of Deeds.
“Are you telling us that real estate transactions are used generally by money launderers in our country so that the transactions must be covered by the anti-money laundering law? And assuming so, isn’t the remedy to require the Registry of Deeds to report all suspicious transactions or transactions beyond the threshold amount rather than imposing an additional burden to the real estate agents?” Drilon said.
Responding to this, Racela explained that there were several real estate “found to be related [to] terrorism financing.”
“So we confirm, Senator Drilon, that real estate vehicle is being used as a money-laundering scheme,” he then said. [ac]