While the Bangko Sentral ng Pilipinas (BSP) moves to ramp up its anti-money laundering system, the central bank chief said the ₱500,000 cash withdrawal limit has so far been a “very effective” measure.

“I think it’s very effective so far. As best we can tell, it’s a very effective measure,” BSP Governor Eli M. Remolona Jr. told reporters during an Oct. 13 press chat on the central bank’s thought leadership in research.

Remolona said the ₱500,000 cap aligns with the reporting threshold for covered transactions, since banks must report any deal at that amount or higher. Beyond these reports, lenders also file Suspicious Transaction Reports (STRs) for cases that warrant closer scrutiny.

“We’re looking at it to enhance [the system] and make it easier for us to connect the dots,” Remolona said.

According to Remolona, BSP-supervised financial institutions (BSFIs) are supportive of the new regulation, which took effect on Oct. 7, noting that it adds a layer of power for banks in flagging suspicious cash flows.

“They love it. They’ve always been suspicious of some transactions, but they couldn’t refuse [to process those transactions],” Remolona said, explaining that banks were unsure if rejecting suspicious transactions could be considered a “criminal offense or something.”

With the BSP applying this rule across the board, lenders are now more confident about rejecting questionable transactions. They can point to the BSP when faced with complaints. “It makes their life easier.”

Remolona, who also chairs the Anti-Money Laundering Council (AMLC), stated that while the country's financial intelligence unit can flag some questionable transactions, its system still needs to be enhanced to cover a large volume of reports.

“There are some [successful flagging], but not enough, I would say. We’re hiring — we’re looking for the right AI [artificial intelligence] and the right analysts, data scientists to improve things and make full use of the STRs, which are in the millions,” Remolona said.

“I say we can do more, but we need help from AI,” he added, noting that the AMLC has become even more overwhelmed by the deluge of suspicious transactions, comparable to the 2016 Bangladesh Bank heist involving Rizal Commercial Banking Corp. (RCBC).

As such, Remolona said the AMLC will further enhance the unit’s STR system.

Meanwhile, Remolona said the call to ban ₱1,000 and ₱500 notes is “a tantalizing proposal, but it’s not so simple. To me, it’s like the saying, you cut off your nose just to spite your face. You’re doing more damage than it’s worth.”

He said banning the highest peso bills is not straightforward, noting that other countries struggled with similar moves. He added that the ₱1,000 note is widely used, which means it holds significant value for the public.

“For a small inconvenience to flood [control] contractors, you’re going to make life hard for many people. We’re still looking at it — we haven’t decided yet. But if you think about it, banning [the ₱1,000 bills] is not going to stop these guys.”