Strict bank secrecy rules protect the corrupt
Transparency International ranked our country 115th out of 180 countries with a score of 34 out of 100 in the 2023 Corruption Perceptions Index (CPI). In 2018 we were 99th. Our corruption is deeply rooted, and its trend worsening.
In school, 70 out of 100 is the passing mark. The Philippines’ score of 34 out of 100 is mind-boggling. This could well mean that out of every P1 of the people’s money, P0.34 go back to them, and P0.66 are lost.
We cannot deny that a great many of our elected officials and personnel in government are corrupt. Others who are good and admirable are helpless.
The late Jesse Robredo said: “It’s not enough for an official to be good. There has to be a system that forces them to be good.” This begs the question: What system or institutional reform is necessary to minimize if not end corruption?
The Philippines, along with Lebanon and North Korea, is one of the three remaining countries in the world with ultra secrecy in banking transactions. For this reason, the Bangko Sentral ng Pilipinas is at the forefront of an effort to ease our bank secrecy law by one knot.
The decades-old Republic Act No. 1405 enacted in 1955 guarantees bank secrecy except under two conditions: when waived by the depositor or issued a court order. This is unsustainable.
A third exception is being proposed in cases where the inquiry or examination is made by the Bangko Sentral ng Pilipinas (BSP), provided that there is reasonable ground to believe that fraud, serious irregularity, or unlawful activity has been or is being committed by persons and that it is necessary to look into the deposit to establish such fraud, irregularity, or unlawful activity.
The results of the inquiry or examination shall be for BSP’s exclusive use and shall not be made available except as applicable to the Securities and Exchange Commission, Philippine Deposit Insurance Corp., Anti-Money Laundering Council, Department of Finance, Department of Justice, and/or the courts, provided, that the sharing of the results or examination of the inquiry or examination is necessary to prevent or prosecute any offense or crime.
Corruption perturbs the delivery of basic services making the poor unable to live a decent life. The Asian Development Bank cited that 18.1 percent of the country’s population lived below the national poverty line in 2021.
Corruption brings with it far-reaching economic consequences. It affects local businesses resulting in joblessness. It puts us under stricter global economic monitoring and regulation. According to the International Monetary Fund, the Philippines would be able to remove itself from the Financial Action Task Force’s “gray list” by revising governing bank secrecy rules.
In recent years, we have become a haven for dirty money. It’s been said: “No country can progress if its politics is more profitable than its industries. In a country where politicians are richer than entrepreneurs, they manufacture poverty.”
Professor Randy David, in his article “Sociology of corruption” (Public Lives, 10/20/24), aptly declared: “Unless we acknowledge this as the root of our nation’s persistent crisis … there is no way we can pull ourselves out of the rut in which we are stuck.” Change realization involves acknowledging that the current state is no longer aligned with what ought to be our nation’s goals or values.
Make this thus a clarion call on President Marcos to certify as urgent the amendment of our bank secrecy law for Congress to enact. Let’s all keep a close watch.
Norman Cabrera,
president,
Kapatiran Party
