BSP vows to help lawmakers amend bank secrecy law

Published August 19, 2021, 1:46 PM

by Lee C. Chipongian

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno on Wednesday, August 18, renewed the central bank’s commitment and support to have the Bank Deposits Secrecy Bill passed as soon as possible after Malacanang has tagged it as one of its legislative priorities for the 18th Congress.


“We are glad that (President Duterte) has identified the Bank Deposits Secrecy Bill as a legislative priority. In view of this, the BSP will further step up its efforts to coordinate with Congress and other stakeholders for the immediate passage of the measure,” said Diokno in a statement, citing information received from the Presidential Legislative Liaison Office.

The BSP said the Office of the President (OP) has referred the Bank Deposits Secrecy Bill to the Legislative-Executive Development Advisory Council for prioritization and inclusion in the Common Legislative Agenda for the Executive and Legislative.

“The OP’s actions were in response to separate communications sent by the BSP requesting that said bill be included in the list of priority bills and be certified as urgent by the President,” said the BSP.

The BSP and Diokno have long pursued amendments to the controversial law as the Philippines is already the last country in the world that still has a law as restrictive as Republic Act No. 1405 or the Secrecy of Bank Deposits law. Amending this law will not only empower the BSP more in its supervisory functions but will also benefit Filipino depositors.

“This enhances the BSP’s capacity to fulfill its mandate of promoting the safety and soundness of the banking system,” said Diokno. “It also enables compliance with international standards on transparency that will also bolster the public and the global community’s trust in the domestic banking system,” he added.

The BSP is in constant communication with the House of Representatives’ Committee on Banks and Financial Intermediaries for the interpellation of the bill and it has also “touched base with various offices of Senators for possible sponsorship and conducted briefings in this regard.”

“Moreover, the BSP was furnished a copy of the joint statement by 22 private organizations, dated May 26, 2021, expressing their full support to the enactment of the Bank Deposits Secrecy Bill,” said the BSP. This was followed by a letter to the President by Philippine and foreign business groups calling for the passage of the bill to support economic recovery and higher growth.

With amendments to the RA No. 1405, the BSP will have the tools necessary to “prove the commission of fraud, serious irregularity or unlawful activity if reasonable basis exists.”

“Particularly, this will allow BSP to effectively fulfill its mandate and enable it to have a holistic examination of a banking institution so that certain risk areas will be considered in assessing a bank’s financial condition, risk management and corporate governance,” said the BSP. The inquiry or examination “shall not be arbitrarily shared or disclosed but proposed to be for the exclusive use of the BSP (but nevertheless) the BSP may share the results of its examination with the Courts and other regulators only if it is necessary to prevent or prosecute an offense or crime.”

Currently there are three proposals to amend RA No. 1405, such as: House Bill No. 8991 which is on second reading at the plenary; House Bill Nos. 1498 and 3554 at the House Committee on Banks and Financial Intermediaries; and Senate Bill Nos. 663, 634, 539, 374, 26, and 1802 at the Senate Committee on Banks, Financial Institutions and Currencies.

The BSP favors House Bill No. 8991 version, which recommends that the easing of deposit secrecy be limited within the confines of BSP’s banking supervision and its investigation of closed banks.