COA's Heidi Mendoza favors changes to Bank Secrecy Law

The current version of the Bank Secrecy Law is hindering the Commission on Audit (COA) in its investigation of various government agencies and officials, outgoing COA Commissioner Heidi Mendoza said on Wednesday.

“While we would like to be more successful in our lifestyle check [of government officials] – kasi talagang importante ‘yan in the fight against corruption – the problem is there are certain limitations.

"Number one, 'yung Bank Secrecy Law. Hindi namin ma-access 'yung mga private accounts ng mga officials,” Mendoza told reporters in a chance interview at the sidelines of the Philippine Data Summit 2015 forum in Quezon City.
 
When her team was auditing the Armed Forces of the Philippines (AFP) and would like to look into its bank account, Mendoza noted they were barred from doing so because they weren't able to present a waiver from the AFP allowing them access to its account.

“Noong nag a-audit kami ng AFP, I was so surprised na nung titignan na namin 'yung government account, we are being asked by the bank to give a waiver… Because the Bank Secrecy Law daw is to protect the owners of the fund,” Mendoza recalled.
 
“But we are the auditors, we should not be protecting the owners of these funds when we are doing our audit,” she added, pointing out that the account they wanted to look into was a government account and not an account of a private individual.
 
Under Section 2 of Republic Act 1405 or the Law on Secrecy of Bank Deposits, "all deposits of whatever nature with banks and banking institutions in the Philippines... are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government officials, bureau or office" except when there is an expressed permission from the depositor or when the depositor is subject to the litigation of the court.
 
Under the current law, Mendoza said “even the auditors are barred from accessing certain financial information and bank documents even if it [concerns] a public transaction.”
 
She emphasized how important it is to carefully study the proposals to amend certain provisions of the law.

To gain public trust
 
At least two bills were filed at the House of Representatives this year, seeking to mandate banks to reveal the signatory and other information of a depositor who issues a bouncing check.
 
At the Senate, Sen. Chiz Escudero filed a bill that would lift the confidentiality clause of the Bank Secrecy Law in the case of civil servants and government officials who are undergoing an audit.
 
Relaxing certain provision of the law is only proper as the country has a stricter rule when it comes to investigating corruption, Mendoza noted.
 
“Ang sabi  ko nga, unlike sa Hong Kong, dito sa ating, 'yung burden of proof wala dun sa iniimbestigahan, kundi nandun sa nagiimbestiga. Napakahirap nun, nasa iyo 'yung burden of proof pero napakaliit ng pwede mong galawan dahil napaka higpit ng Bank Secrecy Law,” she said.
 
Mendoza also emphasized on the importance of government agencies being more transparent when it comes to its records and transactions by allowing the public easy access to the data, “because it is the only way to gain the public’s trust.
 
“Democracy must be built through open societies that share information. When there is information, there is enlightenment. When there is debate, there are solutions,” Mendoza said in her speech at the Philippine Data Summit.
 
“When there is no accountability there is abuse, corruption, subjugation and indignation,” she added. – VS, GMA News