BSP wants cap on funds transfers, banks to refuse suspicious withdrawals

The Bangko Sentral ng Pilipinas (BSP) on Thursday said it is looking at implementing caps on the transfers of funds and allowing banks to refuse suspicious withdrawals, as it seeks to implement more measures that would address the ongoing corruption issues on government spending, particularly on infrastructure projects.

According to BSP Governor Eli Remolona Jr., the central bank is studying more measures that would deter the use of funds for illicit activities, after it earlier set a P500,000 maximum for daily cash withdrawals.

“Now we have a threshold on how much cash can be withdrawn, now there will be a threshold on transfers in general — could be cash, could be digital,” he told reporters in a briefing at the BSP headquarters in Manila City.

“We’re looking at the patterns more carefully in trying to decide what would be the threshold. We’re also looking at other rules that will make it hard for this thing to continue,” he added.

This developed as lawmakers previously questioned the state-led Land Bank of the Philippines (Landbank) for allowing a private contractor to withdraw nearly half a billion pesos in cash within just two days.

The Landbank, for its part, said withdrawals followed standard procedures and were processed only after proper authorization from government agencies.

“These banks, they were not comfortable with releasing the funds that were released, but they couldn’t refuse. These funds were being taken out by people who. owned the account. These were accounts owned by contractors, so how do you stop them? The money got into their account from our treasury,” Remolona said Thursday.

“As a bank, how can you say no to that? You can’t say ‘Baka corruption ‘yan,’ so now we’re taking the decision out of their hands. We’re going to figure our when the banks can actually refuse, based on suspicion of corruption, and the banks, I think, will appreciate that,” he added.

Remolona said the measures should also apply to government transfers to private individuals, with banks also being required to file suspicious transactions reports for certain thresholds.

Such reports, Remolona said, will review whether the withdrawals or movement of funds is disproportionate to what the depositor does or what the depositor earns.

This comes as the governor noted that the governance issues have impacted investor appetite, which have in turn affected economic growth which could have hit as high as 6% if funds were used properly.

“We’ve been making the assumption that we will be growing at 6%. If you look at the past, we said 6%. It turned out to be lower than that, and now we know why. We know because what we thought was going to investment wasn’t going there at all,” Remolona said.

“The reason why we were underperforming is, I think, in large part because of the governance issues related to infrastructure spending,” he added.

Economic growth was recorded by 5.4% in the first quarter, and at 5.5% in the second quarter. The government’s economic team has set a target of 5.5% to 6.5% for this year.

Several investigations are currently being made on government infrastructure projects, particularly on flood control projects, as President Ferdinand “Bongbong” Marcos Jr. earlier bared that 20% of the total P545-billion budget for such projects went to only 15 contractors.

For his part, Marcos last month ordered a sweeping review of the proposed budget of the Department of Public Works and Highways (DPWH) under the National Expenditure Program (NEP), the agency tasked to implement the flood control projects.

He also earlier launched a website on flood control projects sumbongsapangulo.ph, and urged citizens to report any wrongdoings through the platform, as he found that only 15 firms have cornered 20% of contracts across the country.

Aside from this, the administration has also established the Independent Commission for Infrastructure (ICI), in response to public calls for greater transparency and accountability in infrastructure spending.

It is tasked to conduct an in-depth investigation into the alleged irregularities and misuse of funds in flood control, and other infrastructure projects. –NB, GMA Intergrated News