Bankers oppose Comelec resolution curbing cash withdrawals

(Updated 10:44 p.m.) Banks see no compelling reason to comply with the  Commission on Elections' (Comelec) resolution limiting cash withdrawals to P100,000 starting Wednesday in the run up to the May 13 national elections, saying it is a disruptive order that go against the grain of normal banking and business transactions in the Philippines. Instead, the powerful Bankers Association of the Philippines (BAP) which groups the country's largest commercial and universal banks made it clear it will only heed the call of regulators that exercise jurisdictions over the industry. "We will comply with the directives of our regulatory bodies, the BSP (Bangko Sentral ng Pilipinas) and SEC (Securities and Exchange Commission)," BAP president Lorenzo Tan said in a text message to reporters Wednesday. Apart from the BAP, the Management Association of the Philippines (MAP) and Philippine Chambers of Commerce and Industry criticized the Comelec for its issuing such a resolution, which the industry groups claim are counterproductive to business. "That is a poorly made resolution. It will not really address concerns on vote buying but will create difficulties for businesses, especially medium and small establishments, and workers who depend on them," said PCCI vice chair Donald Dee. MAP president Melito Salazar Jr.  said "establishments are business as usual [even during elections season and] will need to start paying suppliers." The chamber is the largest aggrupation of business associations in the country, and MAP is the largest  organization whose members are the top managers of domestic and foreign businesses in the country. In categorical terms in separate messages to the media on Wednesday, some senators also opposed the Comelec order.  Senate Majority Floor Leader Vicente Sotto III, Senators Ralph Recto, Panfilo Lacson, and Francis Pangilinan criticized the poll body for prohibiting cash withdrawals above P100,000 a day and people carrying more than P500,000 in cash. Hampering business transactions On Tuesday night, the Bangko Sentral refused to comply with the May 7 Comelec Resolution 9688, which prohibits withdrawals of more than P100,000 in a single day or carrying cash exceeding P500,000. The resolution also empowers ordinary citizens to arrest vote buyers and vote sellers. This "may disrupt normal business and commercial transactions in the Philippines," the Bangko Sentral noted in an e-mailed brief to media outlets late Tuesday. The central bank strongly opposed the Comelec resolution, saying its implementation would violate bank secrecy laws on peso and foreign currency deposits as this "would necessarily entail looking into bank deposit accounts." Resolution 9688 ordered the Anti-Money Laundering Council—a central bank agency—to "monitor and initiate investigations, and if necessary, inquire into and examine the deposits" with withdraws of over P100,000. Tan, who is also president of Rizal Commercial Banking Corp., said in his text message the Comelec resolution "will hamper the commercial and business transactions of banks in general." "Workers and suppliers of certain industries are paid weekly. Public markets operate on cash basis daily," he added. The Comelec and Bangko Sentral—two constitutional bodies—locked horns Tuesday over the restrictions, a situation which drew strongly worded reactions from various sectors against the poll body. In a strongly worded but brief statement on the matter, the Bangko Sentral refused to comply with the Resolution 9688. Comelec chief Sixto Brillantes defended the commission from the avalanche of criticisms and oppositions to its resolution, noting the resolution only seeks to control cash transactions. “Puro cash ito, which means trade and industry will not be affected,” he said. “Cash lang... It means you can issue as many checks as you like, as many [and] as big amounts you would like but not cash,” Brillantes noted, saying no politician buys votes using checks. Resolution 9688 also empowers ordinary citizens to arrest vote buyers and vote sellers. “Persons who committed, [are] actually committing or [are] attempting to commit vote-buying and vote-selling, an election offense, can be arrested by any law enforcement officer or private person without warrant,” the resolution read. It is the first time the poll body is imposing a "money ban" during elections. Violating bank secrecy laws This "may disrupt normal business and commercial transactions in the Philippines," the Bangko Sentral noted in an e-mailed brief to media outlets late Tuesday. Implementing the Comelec resolution would violate bank secrecy laws on peso and foreign currency deposits as this "would necessarily entail looking into bank deposit accounts." Tan, who is also president of Rizal Commercial Banking Corp., said in his text message the Comelec resolution "will hamper the commercial and business transactions of banks in general." "Workers and suppliers of certain industries are paid weekly. Public markets operate on cash basis daily," he added. In an emailed statement to reporters Wednesday afternoon, Chamber of Thrift Banks executive director Suzanne Felix said they are wary of the resolution's repercussions on banks' normal transactions. "While we recognize and support the Comelec's efforts to ensure clean and honest elections, we are concerned that limitations or hindrances on withdrawals, check encashments, and transportation of cash may disrupt banking operations as well as normal business and commercial transactions in the country," she noted. — VS, GMA News