The Philippine Chamber of Commerce and Industry (PCCI), the largest business organization in the country, has joined other business groups in supporting the immediate passage of the Banking Secrecy Act Amendment to fight tax evasion and deter financial crimes.
“The PCCI believes the government needs stronger monitoring and enforcement tools to fight tax evasion and other financial crimes. And this could only happen if the country's stringent bank secrecy law is amended,” PCCI said in a statement.
Republic Act (RA) 1405 forbids the disclosure of or inquiry into deposits with any banking institution, unless the depositor gives permission or a competent court orders the examination of bank accounts.
The country's stringent bank secrecy law has frequently been referenced in international reports spotlighting offshore tax evasion, money laundering, and corruption. Bank secrecy has continued to be cited as a constitutional and statutory right despite causal evidence between the secrecy laws and illegal activities.
The Bank Secrecy Act needs to be amended to align the country’s banking and financial systems with international best practices and meet global standards of transparency, combat illegal financial transactions and promote the safety and soundness of the financial system.
Greater transparency could bolster the country’s reputation as compliant and well-regulated. A transparent financial banking system cultivates trust and represents a commitment to restricting money laundering, corruption, tax evasion and other fraudulent banking schemes.
The PCCI further stresses that safeguards need to be put in place to avoid abuses and maintain public trust.
On one hand, PCCI said that private banks will need to embrace accountability not only in sharing information over bank activities where there are suspicions or evidence of criminal activity, but also in restricting access to banking that potential criminals might have before they are able to place and manage illicit funds in offshore accounts.
On the other hand, banks and honest depositors must also be protected from the use of the law for harassment or other illicit motives.