BSP cracks down on illegal money changers, orders four closed

MANILA, Philippines—The Philippine central bank is cracking down on the proliferation of illegal money changers in the country and has started by banning four such “money services businesses” from operating following the discovery of several violations.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said one money changer in Laoag and three others operating in one locale in Mandaluyong City have been barred from engaging in any kind of financial service.

These firms are LM’s Money Changer or L.M.’s Money Changing Services at the Laoag City Public Market in Ilocos Norte owned by Monique Diana Castro, Adahn Money Changer owned by Tandiko Ajibon Boyo, Mudzmar Money Changing Services owned by Farida Adjula, and Zhenrihada Money Changing Services owned by Tadzmahal Andag.

The last three are located at numbers 477, 323 and 64-D, all in Maysilo, Plainview, Mandaluyong City.

“The Monetary Board has disqualified these [money service businesses] and any sole proprietorship owned or controlled by their respective owners or operators from registering with the BSP, or obtaining a license with the BSP to engage in any activity that is authorized or supervised by the BSP,” the statement said.

The BSP explained that these firms were found operating without central bank registration in violation of the agency’s rules and regulations governing operations. As such, they were also in violation of reporting obligations for non-bank entities engaged in remittance and money changing or foreign exchange dealing.

“The above disqualification is part of the BSP’s efforts to crack down on illegally operating money service businesses,” the central bank said.

Late in 2020, the Anti-Money Laundering Council — which is chaired by BSP Governor Benjamin Diokno — urged financial industry stakeholders to remain cautious and vigilant amid increasing evidence that criminal elements have become more active due to the pandemic.

The AMLC chair said proper know-your-customer and customer due-diligence procedures must always be conducted while clients’ risk ratings must be periodically assessed.

According to the dirty money watchdog, suspicious transaction report submissions for 2020 increased by 57 percent compared with the same months in 2019.

Of the total number of suspicious transactions, only 29 percent, however, occurred between the start of the lockdown in March to the end of August 2020. Red flag submissions of electronic money issuers soared by 688 percent while those of pawnshops and money service businesses climbed by 51 percent.

TSB