THE House of Representatives has taken a major step toward strengthening the Marcos administration’s anti-corruption efforts with the committee-level approval of a long-overdue bill easing restrictions under the bank secrecy law.
Deputy Majority Leader Luigi Villafuerte said the House Committee on Banks and Financial Intermediaries has approved a consolidated measure amending Republic Act 1405, or the Secrecy of Bank Deposits Law, to grant the Bangko Sentral (BSP) authority to examine bank accounts of individuals or corporations when there is reasonable ground to believe they are involved in fraud, serious irregularities, or unlawful activities.
The bill-passed by the panel chaired by Manila Rep. Irwin Tieng-also seeks to relax the 70-year-old provision that bars bank officials from disclosing account details without the depositor’s consent, except in cases of impeachment or court orders in graft-related litigation.
The approved measure consolidates eight proposed amendments to RA 1405, including House Bill (HB) 1786, authored by Villafuerte along with Camarines Sur Reps. Migz Villafuerte and Tsuyoshi Anthony Horibata, and Bicol Saro Rep. Terry Ridon.
Villafuerte noted that a similar House-approved bill stalled in the Senate in the previous Congress owing to the absence of a counterpart measure.
He stressed that the proposal is among the 44 priority bills under the Common Legislative Agenda (CLA) endorsed by President Marcos and the Legislative-Executive Development Advisory Council (Ledac) during its meeting at Malacañang on September 30.
‘The congressional approval of this proposed amendment to RA 1405 is timely, given that it is among the priority bills of the Marcos administration in the 20th Congress and is in step with Malacañang’s efforts to double down on its anti-graft drive,’ Luigi Villafuerte said.
‘Lifting the secrecy of bank deposits will certainly complement the government’s drive for greater transparency with the recent decision by Ombudsman [Jesus Crispin] Remulla to restore public access to the SALNs [Statement of Assets, Liabilities, and Net Worth] of both appointed and elected public officials,’ he added.
He said that the measure also responds to the call of business groups-such as the Organizationof Financial Executives (Finex), Makati Business Club, and the Management Association of the Philippines-for stronger transparency and accountability mechanisms to curb corruption.
‘The approval of this bill further addresses the push by business groups for the government to strengthen transparency and accountability in government as a better means to combat official corruption,’ Luigi added.
Meanwhile, Migz Villafuerte said HB 1786 seeks to exempt the BSP from bank secrecy restrictions when exercising its supervisory powers, allowing it to examine accounts when there is reasonable ground to suspect fraud or unlawful activity.
Migz, who chairs the House committee on information and communications technology (ICT), said that with the advancement of technology, financial transactions have become easier, faster, more efficient, and more accessible through mobile banking, agent banking, and fintech platforms.
He said that, ‘There are even banks that allow online deposits of their checks, which means that depositing money in bank accounts can now be accessible with just a few clicks of the mobile phones of depositors, making money flow in the economy faster as well.’
Lawmakers said that there are individuals or corporations that use RA 1405 to their advantage, being aware that even if they deposit bank checks fraudulently, they are protected by this law on bank secrecy, especially its specific provision barring banks from examining deposits without the consent of their depositors.
They added that HB 1786 upholds the provision of RA 1405 that all deposits are considered as of an absolutely confidential nature and may not be examined, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited is the subject matter of the litigation.
However, HB 1786 amends this provision by stating that the ban can be lifted upon the Monetary Board’s determination that ‘there is a reasonable ground to believe that fraud, serious irregularity, or unlawful activity has been or is being committed by the above mentioned persons and that it is necessary to look into the deposit to establish such fraud, serious irregularity, or unlawful activity.’
This bill provides, too, that this proposed new authority of the BSP to examine deposits ‘shall also apply in the course of its investigation of closed banks as used in this Act; deposits shall refer to money or its equivalent received by a bank in the useful course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time, or thrift account .’
HB 1786 states that the results of the inquiry or bank examination shall be for the ‘exclusive use’ of the BSP and ‘shall not be made available to any person or entity, whether public or private, except to the Securities and Exchange Commission [SEC], Anti-Money Laundering Council [AMLC], Department of Justice [DOJ], and the courts.’
The sharing of information on deposits with the SEC, AMLC, DOJ, and the courts is premised in the bill on the necessity of examining such bank accounts to prevent or prosecute any offense or crime.