THE Bangko Sentral ng Pilipinas (BSP) intends to tighten bank regulations surrounding cash or digital money transfers, especially involving publicly funded projects in light of the flood control controversy.
In a briefing on Thursday, BSP Governor Eli M. Remolona Jr. said this may take the load off of local banks. He said most of the banks who disbursed these large amounts were not comfortable releasing the funds they released.
By issuing a BSP policy on money transfers, Remolona said there may be conditions set when banks can refuse to release or transfer amounts based on suspicion of corruption.
‘We’re looking very carefully into this. One would be a threshold on how much can be withdrawn. Now we have a threshold on how much cash can be withdrawn,’ Remolona said.
‘Now there would be a threshold on transfers in general. Could be cash, could be digital. And so we’re looking at the factors more carefully in trying to decide what would be a threshold. And we’re also looking at other rules that would make it harder for this thing to continue,’ he added.
These new guidelines will allow banks to reconsider releasing funds after careful evaluation of whether these withdrawals of funds is disproportionate to what a depositor does or earns.
The latest corruption scandal, Remolona said, is now a bigger factor for the country’s growth than external factors. Nonetheless, the BSP is hoping that the impact of the controversy would be short-lived.
‘I think we need a credible resolution on this issue,’ Remolona said.
AMLC’S fear: Complicit banks
Earlier, the Anti-Money Laundering Council (AMLC) raised the possibility that banks and their employees may be complicit in the release of funds from accounts linked to the anomalous flood control projects.
In a radio interview, AMLC Executive Director Matthew M. David said if this were the case, the AMLC can initiate an examination or compliance checking against the banks, including their employees.
David said AMLC can also file criminal cases of money laundering against banks and their employees who are complicit in the current corruption controversy.
He said banks should file suspicious transaction reports to the AMLC if there are withdrawals that are suspicious, as provided under the law.
The flood-control mess could threaten the country’s growth given its potential to slow down government spending, according to Nomura.
In a separate development, however, President Ferdinand Marcos Jr. gave assurances on Monday that public works will still push through next year to keep the country’s economy going, despite the ongoing government crackdown on anomalous flood control projects.
In its latest brief, Nomura said the slowdown in government spending as a result of the floodworks fiasco could prompt the Bangko Sentral ng Pilipinas (BSP) to reduce policy rates to help support the country’s growth.
A reduction in policy rates could provide a much-needed boost to domestic demand, which Nomura said, is expected to encounter ‘significant downside risks’ compared to August 2025.