The Bangko Sentral ng Pilipinas (BSP) is urging financial institutions to be extra vigilant on the misuse of its digital channels for illegal vote-buying and vote-selling amid heightened election-related activities.
BSP Deputy Governor Chuchi G. Fonacier in a memo (Memorandum No. M-2021-074) issued on Friday, Dec. 31, said the BSP is strongly calling for banks and non-banks’ online and mobile wallet applications to adopt “enhanced surveillance and monitoring measures to prevent the misuse of the financial system as a conduit for this illegal activity.”
Vote-buying and vote-selling are prohibited acts under Section 261 of the Omnibus Election Code of the Philippines. The BSP issued the memo in view of the recent warnings from the Commission on Election and the Philippine National Police on the possibility of vote-buying and vote-selling using digital channels in the run up to the May 2022 national elections.
Fonacier said BSP-supervised financial institutions (BSFIs) are “urged to re-assess their existing controls in detecting or preventing the possible massive influx of fraudulent accounts and transactions.”
To detect and to prevent vote buying/selling activities, the BSP wants BSFIs to have the necessary enhancements and remedial measures to “ensure that appropriate customer onboarding processes and effective fraud management system (FMS) are in place, and ongoing account and transaction monitoring capabilities are commensurate to respond against the said fraudulent activities.”
Fonacier said that at the minimum, BSFIs should consider the following possible scenarios in calibrating their FMS and account and transaction monitoring rules/parameters: concentration and/or significant number of account registrations in the area or locality where vote-buying/selling is identified to be rampant; large cash transactions during election period; unusual transaction flows between accounts, including the velocity and frequency of transactions such as many-to-one, one-to-many; or unusual volume and/or value in cash in/cash out channels or agents.
When warranted, Fonacier also reminded BSFIs to submit suspicious transaction reports (STR) to the Anti-Money Laundering Council (AMLC) following investigation of “complex, unusually large transactions, unusual patterns of transactions, which have no underlying legal/trade obligation, purpose or economic justification, or the amount involved is not commensurate with the business or financial profile of the client, and other transactions that may be considered suspicious.”