Duterte’s first SONA, one year later: Bank secrecy and microfinancing

Every State of the Nation Address is both a look back and a look ahead—to the President's accomplishments the previous year, and to what he or she plans to do next.

When President Rodrigo Duterte delivered his first SONA on July 25, 2016, he had only been in office for less than a month. However, many of the issues he talked about were already familiar to Filipinos as being close to his heart, thanks to the presidential campaign and his long tenure as Davao City mayor.

GMA News Online looks at some of the issues he discussed in his first SONA, and what the administration is doing to address them.

Almost a year after President Rodrigo R. Duterte vowed to relax Philippine laws on bank secrecy, said to be among the strictest in the world, proposals to amend them have yet to be implemented.

As of July 13, Senator Francis "Chiz" G. Escudero said moves to relax Republic Acts 1405 and 6426, which protect local and foreign currency deposits respectively from scrutiny, have yet to be enacted into law.

Escudero, who chairs the Senate Committee on Bank, Financial Institutions and Currencies, said the proposal to amend the law is now being circulated for signatures.

"Reported out repeal of secrecy law. Still being routed for signature," he said in a text message, adding that this is targeted to be completed "before adjournment."

Among those who support moves to relax bank secrecy laws is Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr., who said that he is willing to work with Congress for such a reform.

"We have an ambitious legislative agenda that is essential towards achieving our goals," he said, noting that "these are just of the very important pieces of legislation that we have to act on with Congress," he said.

According to former BSP Deputy Governor Vicente S. Aquino, the Philippines is one of only two countries in the world—along with Lebanon—with such measures in place.

With the repeal of the laws, Aquino said processing bank records would be fast-tracked especially in cases of litigation, as current laws state that bank deposits must be treated as confidential and may only be opened with a written consent from the account holder.

To recall, officials of the BSP last year said they would work with the Anti-Money Laundering Council (AMLC) to provide suggestions to relax the laws and make bank transactions records accessible when needed.

Duterte also stressed that the government will be rolling out a microfinancing program for small and medium entrepreneurs.

"[I]f employment is not an option, for instance in extremely rural neighborhoods, entrepreneurship would be advocated," he added.

Following this, the Department of Trade and Industry (DTI) this year launched its Pondo sa Pagbabago at Pag-asenso (P3) Program, which allows micro-entrepreneurs to borrow from P5,000 to P100,000 with a monthly interest of 2.5 percent.

The P3 program, which is also aimed at curbing the usurious 5-6 lending scheme, was first launched in Tacloban, Occidental Mindoro, and Sarangani.

Asked for an update on the program, Trade Secretary Ramon M. Lopez in a text message said the service has already been rolled out "nationwide." He did not elaborate.

"Sari-sari stores form part of the economic backbone of the country. Providing them more opportunities can only mean greater economic development," he said in June.

"The shared vision to address inequality and reduce income gaps is the thrust of the Dutertenomics. The current growth story of the Philippines can only matter to our countrymen if it reaches the bottom of the pyramid," he added.

As of May 31, 2017, a total of P104.9 million has been released to those who availed of the program.

According to the latest available data from the DTI, there are 18 local micro-financing institutions accredited in Luzon, six in the Visayas, and three in Mindanao.

Just last week, Senator Juan Miguel M. Zubiri pledged to double funding for the program to P2 billion from the current P1 billion.

"Kasi itong taon na ito nagbigay kami ng P1 billion para sa microfinancing program ng DTI pero nakita po natin na napakaliit non... kulang," he said.

"So hopefully by 2018, kasama ang ating Chairman sa Committee on Finance ba si Senator Loren Legarda... we committed to double it to make it from P1 billion to P2 billion ang ating pondo para sa microfinancing," he added. — BM, GMA News