Philippines: Finance dep’t eyes approval of bank secrecy easing in 2019

  • THE DEPARTMENT of Finance (DoF) is hopeful the easing of bank secrecy laws, which was lacking in the provisions of the partly vetoed Tax Amnesty Act, will be implemented within 2019.
  • President Duterte removed the provision for a general tax amnesty — which could have raised PHP13.63bn if implemented. Duterte said he was forced to remove the measure in the absence of powers for the state to better run after tax evaders, namely the relaxation of the deposit secrecy law and the automatic exchange of information with foreign tax authorities.
  • Finance Undersecretary Gil S. Beltran said for a tax amnesty program to be implemented, the government should be able to look into the bank accounts of individuals.
  • He added that the bank secrecy law results in loss of revenues for the Philippines and affects the country’s attractiveness to international investors as it cannot join the ASEAN Trading Link which connects stock markets of Singapore, Malaysia and Thailand, to securities brokers.
  • However, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said separately that the lifting or easing of bank secrecy laws should be done under certain conditions.
  • One of the conditions is when the deposit account is being used for an unlawful activity or for unsafe and unsound banking activity. The decision on the filing for the petition for lifting will come from the monetary board,” Ms. Fonacier said.
  • Still, BSP Deputy Governor Diwa C. Guinigundo said the central bank has been advocating for many years to ease deposit secrecy laws. It was part of the reforms sought by the central bank when it was pushing for amendments to its charter, along with the authority to look into conglomerates that own banks.
  • However, these reforms were left out by Congress as they approved the BSP charter’s amendments or what is now RA 11211, which was signed into law in 14 Feb 19. BSP officials have said they will consider asking Congress for these amendments as the central bank looks to further boost its regulatory powers.

External Link: