Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. assured that, despite a liquidity hit, the Philippine banking system remains resilient against bank runs, following the freezing of nearly 730 accounts, with the central bank still in search mode for more suspicious accounts.

“[Freezing more accounts] does affect liquidity in general, but our banks are very liquid at this point. I think I can say that with confidence: no bank runs,” Remolona said in a One News PH TV interview on Friday, Sept. 26, when asked about the impact of the account-freezing orders on banks’ liquidity.

Remolona said the BSP is currently investigating questionable, large cash flows throughout the banking system, noting that these financial transactions are mostly carried out through government financial institutions (GFIs).

“We’re making a lot of inquiries. We’re trying to identify the big flows of cash throughout the financial system—the unusually large flows of cash, but not just cash—any financial transactions that look unusual,” Remolona said.

These suspicious transactions, allegedly involving government contractors, were processed through GFIs, the BSP chief said. “That makes sense because it’s government money, so it would go through [GFIs].”

Among the large government-owned financial institutions are the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP).

Remolona admitted that the scale or amounts involved in the ghost flood control projects left him in deep shock. “It was worse than we thought.”

While corruption in the Philippines was not uncommon to the public, what appeared shocking to the BSP governor was the controversial stack of P1,000 cash on a table, which Department of Public Works and Highways (DPWH) contractors reportedly distributed to government officials linked to the anomalous projects.

On Sept. 16, the Anti-Money Laundering Council (AMLC) secured from the Court of Appeals (CA) a freeze order for 135 bank accounts and 27 insurance policies linked to corruption in flood control projects.

On Sept. 19, the AMLC secured another freeze order covering a total of 592 bank accounts, three insurance policies, 73 motor vehicles, and 28 real properties belonging to individuals and contractors linked to the corruption.

For its part, the BSP issued a circular that limits large cash transactions to ₱500,000 per day, effectively throwing sand in the gears.

“We wanted to make it more difficult for the contractors, for the guys involved in this flood control mess, to be able to take money out of the banks,” Remolona said.

However, businesses and individuals with legitimate needs for such an amount opposed this move, citing the inefficiencies it would cause. Remolona explained that clients may still be granted cash larger than half a million pesos if they can justify their need for such a value.

“We understand that there are businesses that are really cash-based, and I think banks also know that,” Remolona said, assuring that banks will accommodate justified cash requests for more than ₱500,000.