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The Department of Finance main office in Manila. (Photo: Team Vega via Wikimedia Commons)

DOF, Congress to revise AMLA

The Department of Finance (DOF) is ready to work with the Congress to speed up the approval of measures amending the Anti-Money Laundering Act (AMLA) and the Bank Secrecy Law, in line with the Duterte administration’s goal to arm the government with “formidable tools” to effectively fight tax evasion and other financial crimes. 

Finance Secretary Carlos Dominguez III recalled that the DOF and the Bangko Sentral ng Pilipinas (BSP) have been jointly pushing for these amendments to strengthen the country’s financial system, which is plagued with loopholes that allow travellers to bring unrestricted amounts of foreign cash into the country, possibly to launder them here, or worse, for use by international criminal syndicates or terrorist networks. 

“It is also very likely that the bulk foreign currencies are coming through our financial system through other channels, not only through the ports. They do this because they can. Our laws have no teeth to investigate and prosecute these activities effectively. We don’t have enough tools to know where all this money is going, without being hamstrung by stringent bank secrecy laws,” said Dominguez during the oathtaking of local treasurers and the awarding of the ISO 9001:2015 certification to the Bureau of Local Government Finance (BLGF). 

The oathtaking and awarding ceremonies were held Friday morning at the Ayuntamiento de Manila building of the Bureau of the Treasury (BTr) in Intramuros, Manila. 

Finance Undersecretary Antonette Tionko, swore into office 123 local treasurers and assistant treasurers from Metro Manila, the various regions in Luzon, and the Cordillera Administrative Region (CAR). 

Before the oathtaking, Dominguez stressed in his speech the need for local treasurers to continue building on their competencies, through the Standardized Examination and Assessment for Local Treasury Service or SEAL Program that is designed to professionalize and modernize the local government treasury service. 

“Apart from bridging whatever skills gap there may be, the program also helps insulate the appointment and designation of treasurers of local governments from politicization. This ensures the cultivation of a meritocracy and inhibits the transfer, detail or reassignment of duly appointed local government treasury officials without due cause,” he said. 

“Slowly but surely, we are building a strong cadre of treasurers capable of undertaking financial management of local governments. Improved revenue generation for local governments will make devolution a more meaningful process for our communities,” he added. 

The BLGF, meanwhile, was awarded the ISO 9001:2015 certification for the quality of its processes in issuing the Certificate of Net Debt Service Ceiling and Borrowing Capacity to local government units (LGUs). 

In line with the objectives of the Ease of Doing Business (EODB) Act, the BLGF has streamlined the certification process, reducing documentary requirements from 12 to 4. It also strengthened the evaluation procedures through the continuous monitoring of LGU borrowing using electronic channels. 

“The ISO Certification is a statement of the Bureau’s service excellence in providing technical assistance and undertaking oversight functions to local government units (LGUs) to guide them towards fiscal sustainability,” Dominguez said. 

Dominguez congratulated the BLGF for this achievement, as well as the newly sworn local treasurers, who he described as “the real front liners in ensuring grassroots development through effective economic investments made by our local governments.” 

“While we are busy plugging the loopholes of our financial system, I am happy that in the area of local government finance, we can rely on the BLGF to effectively carry out its mandate of empowering LGUs to attain fiscal sustainability,” Dominguez said. 

The Finance chief noted that the AMLA, enacted in 2001, remains a weak tool against money laundering and other unlawful activities, especially because tax evasion and other financial crimes are not among the predicate offenses listed under the law that would allow the Anti-Money Laundering Council (AMLC) to examine bank accounts after securing a court order. 

“This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities,” Dominguez said. 

He noted that as early as 2016, the DOF has called on the Congress to pass amendments to Republic Act (RA) No. 1405, or the Bank Secrecy Law, to enable the government “to penetrate the wall of confidentiality used to conceal ill-gotten money by lifting the bank secrecy rules for suspected criminal cases.” 

The DOF again tried to include the lifting of bank secrecy in the tax amnesty bill, but this was excluded by the Congress in the final version of the measure. 

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