BSP: Withdrawals of P500K+ cash with proof of purpose should've no undue delays

PANGLAO, Bohol — The Bangko Sentral ng Pilipinas (BSP) on Tuesday clarified that customers can withdraw over P500,000 cash or its equivalent amount in foreign currency easily and without unnecessary delays, provided they present documents showing the legitimate purpose.

In an advisory, the central bank said customers withdrawing P500,000 or more in cash need only to present documents that indicate the legitimacy of the purpose of withdrawal, such as a deed of sale or a hospital bill, among others.

“The Bangko Sentral ng Pilipinas reiterates that customers can withdraw amounts above P500,000.00 or its equivalent amount in foreign currency, easily and without unnecessary delays,” the advisory read.

“The submission and review of said proof, nevertheless, should be straightforward and not unduly delay customers’ access to their funds as these are already part of the BSP-supervised financial institutions’ (BSFIs) existing customer due diligence or know-your-customer process,” it added.

Under BSP Circular 1218, withdrawals exceeding the P500,000 threshold shall only be made, facilitated, or transacted through check payment, fund transfer, direct credit to deposit accounts, and/or other forms using the digital platform of the BSFI.

Cash transactions exceeding the threshold are also subject to the conduct of appropriate enhanced due diligence (EDD) measures, such as having the customer submit additional identification information, and/or proof of legitimate business purpose or transaction.

“Several briefings with stakeholders have been conducted by the BSP. Efforts are ongoing to continuously cascade the policy to various relevant industries,” the BSP said.

“The circular is not intended to burden or financially exclude legitimate business or transactions entered into by customers of entities. Through this reform, the BSP reinforces its current measures against the use of cash for illegal activities, strengthens financial system integrity, and promotes the use of traceable and efficient payment channels to safeguard the public and financial institutions,” it added.

According to BSP Deputy Governor Zeno Abenoja, the central bank is also looking at the possible impact of the circular on economic growth, after former Finance secretary, now Executive Secretary, Ralph Recto reportedly said this was a possible factor behind the slowdown recorded in the third quarter.

“I think they are looking at the new feedback, kasi aware naman lahat (because everyone is aware) which ones are cash oriented, marami talagang cash oriented na clients (there really are a lot of cash-oriented clients), and there was guidance how to treat ‘yung mga clients na ganon (like that) so we’re dealing with less disruption,” he said on the sidelines of the Central Banking Symposium.

Philippine economic growth clocked in at 4.0%, the slowest in four years since the 3.8% recorded in the first quarter of 2021 when the country implemented strict lockdown measures due to the COVID-19 pandemic.

“At that time, kaka-impose, kaka-implement pa lang nun eh, before the third quarter numbers were released, so siguro, wala siya dun sa Q3 numbers for GDP. Very recent lang naman ‘yung requirements na ‘yun,” Abenoja said.

(At the time, it was just newly imposed, newly implemented, before the third quarter numbers were released, so maybe, it does not reflect in the Q3 numbers for GDP. These requirements were very recent.)

“They are looking at the implementation of the guidelines to make sure na ‘yung (that the) legitimate transactions flow as smooth as possible. They don’t want this to delay kung ano ‘yung mga (the) financial transactions, so that was considered, and we got good cooperation with banks,” he added.

BSP Governor Eli Remolona Jr. in October said the central bank is also looking at implementing caps on fund transfers and allowing banks to refuse suspicious withdrawals, as it seeks to implement more measures that would address the ongoing corruption issues related to government spending on infrastructure projects.—AOL, GMA Integrated News