BSP raises scrutiny trigger for cash withdrawals from P500K to P1M
Bank depositors can now withdraw up to P1 million in cash without automatically triggering enhanced checks, according to a new circular of the Bangko Sentral ng Pilipinas (BSP).
The BSP raised the threshold for cash withdrawals that trigger heightened scrutiny over possible illicit activity in an effort to avoid delays for routine, legitimate transactions while maintaining tighter oversight of higher-risk dealings.
Under BSP Circular No. 1230 dated Feb. 27, the threshold requiring banks to examine the legitimacy of large cash withdrawals was doubled from P500,000 to P1 million.
The BSP said the decision followed consultations with banks and industry groups, which flagged a high volume of legitimate transactions breaching the previous cap, including payroll releases, loan proceeds and project-based disbursements.
The central bank first introduced the P500,000 trigger in September last year after investigations into anomalous government flood control projects showed how lawmakers allegedly received millions of pesos in cash from contractors as kickbacks.
The findings prompted the BSP to tighten safeguards to curb money laundering and prevent the financial system from being used for illicit activity.
Digital not covered
Under the revised rules, however, transactions exceeding P1 million will require documentation to establish legitimacy, although BSP-supervised financial institutions may set lower thresholds based on their own risk assessments.
For individuals and companies with recurring large cash transactions, enhanced due diligence will be conducted on a per-customer, rather than on a per-transaction, basis, meaning regular activity should not face repeated reviews.
The BSP also reiterated that the stricter scrutiny applies only to large cash withdrawals, but not transactions conducted through digital or other traceable channels.
“This is designed to focus on higher-risk activity while streamlining the process for legitimate and normal cash transactions, including recurring ones,” it said.
According to the central bank, the adjustment also reflected findings from the latest National Risk Assessment (NRA) of the Anti-Money Laundering Council (AMLC) and ongoing surveillance monitoring.
The AMLC’s third NRA covering 2021 to 2024 gave the country a score of 0.67 on a scale of zero to one for combating dirty money, a rating classified as “medium-high.” That marked an improvement from a score of 0.60 in the previous assessment.
Improved rating
The report attributed the gains to stronger anti-money laundering laws, a more active financial intelligence unit, tighter supervision and more frequent asset freezing and forfeiture.
Despite the progress, the report said the national level of money laundering threat remained “high,” citing predicate crimes that generate large illicit proceeds, including drug trafficking, fraud, environmental crimes and tax offenses.
Overall vulnerability, however, was assessed as “medium,” with a score of 0.51, reflecting strengthened laws, institutions and controls.
Risks related to terrorism financing have eased since the previous assessment cycle, as domestic extremist groups weakened and intelligence coordination and oversight improved, particularly over nonprofit organizations. Still, the report warned that risks persist in parts of Mindanao and in certain remittance channels.
******
Get real-time news updates: inqnews.net/inqviber
