Bill amending bank secrecy law on Duterte’s list of legislative priorities —BSP

The central bank-backed bill seeking to amend existing bank secrecy law has been included among President Rodrigo Duterte’s legislative priorities for the 18th Congress, the Bangko Sentral ng Pilipinas (BSP) said Wednesday.

Citing the Presidential Legislative Liaison Office, the BSP said the Office of the President (OP) has also informed the central bank that it has referred the Bank Deposits Secrecy bill to the Legislative-Executive Development Advisory Council for prioritization and inclusion in the Common Legislative Agenda for the Executive and Legislative.

The OP’s actions were in response to separate communications sent by the BSP requesting that said bill be included in the list of priority bills and be certified as urgent by the President, it said.

“We are glad that the President has identified the Bank Deposits Secrecy bill as a legislative priority. In view of this, the BSP will further step up its efforts to coordinate with Congress and other stakeholders for the immediate passage of the measure,” said BSP Governor Benjamin Diokno.

In the House of Representatives, the BSP said it is in constant communication with the committee on Banks and Financial Intermediaries for the interpellation of the bill.

The central bank, likewise, said it has touched base with various offices of Senators for possible sponsorship and conducted briefings in this regard.

Moreover, the BSP said it was furnished with a copy of the joint statement by 22 private organizations, dated May 22, 2021, expressing their full support for the enactment of the Bank Deposits Secrecy bill. 

This was followed by a letter to the President by Philippine and foreign business groups calling for the passage of the bill to support economic recovery and higher growth, it said.

The BSP-backed measure seeks to amend the Republic Act 1405, or the Secrecy of Bank Deposits Law.

The proposed amendments also include provisions that seek to protect banks against suits from depositors in line with the BSP's inquiry or examination of deposits, and against the use of the law for persecution or harassment.

At its current version, the bank secrecy law is regarded as one of the toughest in the world, as it prohibits the disclosure, inquiry, and examination into Philippine currency deposits of whatever nature and kind, as well as investment in securities issued or guaranteed by the government.

The Bank Deposits Secrecy bill will equip the BSP with tools necessary to prove the commission of fraud, serious irregularity or unlawful activity if a reasonable basis exists, the central bank said.

Particularly, it said, this will allow the BSP to effectively fulfill its mandate and enable it to have a holistic examination of a banking institution so that certain risk areas will be considered in assessing a bank’s financial condition, risk management and corporate governance.

The results of the inquiry or examination by the BSP shall not be arbitrarily shared or disclosed but proposed to be for the exclusive use of the BSP.

Nevertheless, the BSP said it may share the results of its examination with the Courts and other regulators only if it is necessary to prevent or prosecute an offense or crime.

“This enhances the BSP’s capacity to fulfill its mandate of promoting the safety and soundness of the banking system,” Diokno said.

“It also enables compliance with international standards on transparency that will also bolster the public and the global community’s trust in the domestic banking system,” he added.

To recall, President Rodrigo Duterte in his first State of the Nation Address (SONA) in 2016 vowed to lower personal and corporate income tax rates, and relax the Bank Secrecy Law.

Both taxes have been lowered but the amendments to the Bank Secrecy Law have yet to be passed, making the Philippines currently the only country to have such a law after Lebanon lifted its version in May 2020.

Duterte, then a presidential candidate in 2016, was also dared to sign a bank secrecy waiver, but his accounts were not opened to the public.

At present, the central bank's proposals under House Bill 8991 are on second reading at the plenary.

House Bills 1498 and 3554, which exempt government officials, are being deliberated at the House Committee on Banks and Financial Intermediaries.

Meanwhile, Senate Bills 663, 634, 539, 374, 26, and 1802 are being discussed at the Senate Committee on Banks, Financial Institutions, and Currencies. — BM, GMA News