The Bangko Sentral ng Pilipinas (BSP) is planning to set new thresholds not just for large cash withdrawals but also for digital and other fund transfers, as part of efforts to prevent the misuse of public funds and strengthen banks’ ability to detect suspicious transactions.
BSP Governor Eli Remolona Jr. said the move aims to help banks guard against questionable withdrawals and transfers, especially those involving government disbursements to private contractors, without having to make difficult judgment calls on their own.
‘We’re looking very carefully into this. One will be a threshold on how much can be withdrawn. We have a threshold on how much cash can be withdrawn. But now, there will be a threshold on transfers in general – it could be cash, it could be digital,’ Remolona said in a press briefing yesterday.
The BSP’s ongoing review forms part of broader efforts to tighten financial integrity safeguards following past corruption controversies and to ensure banks can act decisively against suspicious activity without fear of liability.
State-owned lenders, such as the Land Bank of the Philippines and the Development Bank of the Philippines, have faced scrutiny for allowing large withdrawals tied to flood control accounts.
Landbank earlier rejected allegations of irregular activity following reports of unusually large cash withdrawals by contractors of the Department of Public Works and Highways involved in flood control projects, saying all questioned transactions were legitimate and fully compliant with banking laws.
Remolona explained the BSP is studying transaction patterns to determine appropriate limits and may also introduce new rules ‘that would make it hard for this thing to continue,’ referring to instances where public funds end up in questionable hands.
Banks, he noted, often found themselves in a bind when asked to release funds that appeared suspicious but were technically legitimate transfers from government agencies.
‘These banks were not comfortable with releasing the funds, but they couldn’t refuse,’ he said. ‘The money that got into their account was from our Treasury. So that was a legitimate transfer. As a bank, how do you say no to that?’
The central bank now intends to ‘take that decision out of their hands’ by clearly defining when banks can refuse transactions based on suspicion of corruption.
‘We’re going to figure out when the banks can actually refuse based on suspicion of corruption. The banks, I think, would appreciate that,’ he said.
Remolona added that applying uniform rules across all financial institutions would prevent depositors from simply moving their funds elsewhere.
Last month, the BSP required financial institutions to cap large-value cash transactions at P500,000 per banking day unless the amount is processed through traceable channels.
The BSP chief said all banks are currently complying with existing cash withdrawal limits and that lenders themselves welcome clearer guidance.
For now, the planned thresholds will likely cover government-related transactions, particularly those involving transfers from the state to private individuals or contractors.