Bank records transparency seen to entail payback

The demand for the lifting of the bank-secrecy law because of recent allegations that it is being used to conceal unexplained wealth may have a backlash on efforts of the country to attract more investments, bankers said.

Under that law, no person except for the depositor is allowed to have access to money kept in a bank. A Bankers Association of the Philippines (BAP) official said serious consequences are expected if the law is amended, including the possible mass exodus of personal deposits going to banks abroad.

“If bank resources total P9.4 trillion, and nearly a fourth of that are deposits, what do you think will happen to banks role as safe keeper of deposits?” the BAP official asked. That law, formally known as Republic Act 1405, was enacted 61 years ago.

Sen. Teofisto Guingona III, chairman of the Senate blue ribbon committee, said that when this law was enacted, there was no e-mail, mobile phone or Internet yet.

“During the period when this was made into law, people have no avenue to cheat; the exchange rate was probably 1:1. Time has flown, but this law didn’t,” Guingona said.

Two former United States Ambassadors to the Philippines, Francis Ricciardone and Kristie Kenney, had noted in official communications that the bank-secrecy law was “hampering” transparent governance and anti-corruption mechanisms, and went against the global trend to relax bank-secrecy laws.

“With regard to bank secrecy, we’re going to work together with the Anti-Money Laundering Council to provide suggestions on this,” said Pia Roman Tayag, head of the Inclusive Finance Advocacy Staff of the Bangko Sentral ng Pilipinas (BSP). Tayag didn’t provide much details about the possible review of the law, citing the need for Congressional approval.

“Possibly, there are many approaches: total lifting or partial lifting with certain conditions, so we are yet to submit it,” Tayag said.

She also said the only way one can lift this law is if he or she signs a waiver, so that authorities, led by the courts, can check the deposits without opposition from the bank where the deposits are kept.

With the waiver, a “bank depositor can waive his or her right to privacy with respect to his bank deposit, so the BSP or other regulators and law-enforcement agencies can look into it,” according to another central bank official. JERRY MAGLUNOG