MANILA, FEBRUARY 21, 2012
(INQUIRER) EDITORIAL - Perhaps unwittingly, the Senate
impeachment trial has shown more and more the urgent need to amend the country's
bank secrecy laws and make them dovetail with current global paradigm shift from
secrecy to transparency and accountability.
The shift has been provoked by the 2008 global financial crisis in which
banking secrecy hampered attempts to crack down on profiteers and implement
reforms, even as in the Philippines, antiquated and very strict bank secrecy
laws abetted corruption and made of the banking system a safe haven for
ill-gotten wealth.
Last Feb. 13, the impeachment court voted to respect the temporary
restraining order on the Senate subpoena on alleged dollar accounts of Chief
Justice Renato Corona with PSBank, which was issued by the Supreme Court in
relation to the Foreign Currency Deposit Act (FCDA) or Republic Act 6426.
Associate Justice Maria Lourdes Sereno had dissented from the Supreme Court
injunction, noting that "it pushes the law to an absurdity" and may invite
"unscrupulous public officers to convert their peso deposits to foreign currency
accounts in order to hide from the law and evade criminal liability."
The potential of arcane secrecy laws hindering the drive against graft and
corruption had been raised by two US envoys to Manila in a series of cables
between 2005 and 2008.
The secret cables have been made public by the whistle-blower website,
WikiLeaks. Former US envoys Francis Ricciardone and Kristie Kenney, in separate
cable dispatches sent to Washington, said the banking secrecy laws in the
country were "hampering" transparent governance and anticorruption mechanisms,
and went against the global trend relaxing bank secrecy laws.
Kenney talked of "institutional challenges" such as too-strict bank secrecy
laws and poor protection for whistle-blowers, as major obstacles to
anticorruption campaigns in the Philippines. Ricciardone noted the same concern
earlier in a January 2005 cable, saying: "The bank secrecy laws in the
Philippines are among the strictest in the world."
The Bank Secrecy Law (Republic Act No. 1405) was enacted on Sept. 9, 1955. It
declares all deposits absolutely confidential, with the exceptions of: written
consent of the depositor; in cases of impeachment; upon order of a competent
court in cases of bribery or dereliction of duty of public officials; or in
cases where the money deposited or invested is the subject of litigation.
The FCDA is of more recent vintage although its legacy may be no less lethal:
It is a product of martial law, signed into law by the late dictator Ferdinand
Marcos in 1974. The FCDA makes the revelation of foreign currency details
unlawful, except upon a written permission of the depositor. The FCDA was
invoked by PSBank in refusing to open Corona's alleged dollar accounts.
Ricciardone's and Kenney's comments were made because of rising concerns
about money laundering in the Philippines, but the paradigm shift in watering
down bank secrecy has been a global development in the aftermath of the 2008
financial meltdown.
"The era of banking secrecy is over," declared members of the Group of 20
leading economies (G20) at the 2009 summit in London in a joint communiqué. In
order to manage the crisis and prevent its repeat, financial institutions need
to pursue accountability reforms, said the G20.
Thankfully there are already bills in both houses of Congress seeking changes
in banking secrecy laws.
Sen. Francis Escudero has filed Senate Bill 107 that would require government
employees to provide the Office of the Ombudsman with written permission to look
into their bank accounts if they are accused of crimes.
In the House of Representatives, party-list member Antonio Tinio (Alliance of
Concerned Teachers, or ACT) has filed a counterpart bill that seeks to amend the
FCDA by revoking the absolute confidentiality conferred upon foreign currency
deposits, but only in cases involving bribery and dereliction of duty.
Only the other week, Sen. Ralph Recto filed Senate Resolution 711 seeking a
review of the FCDA and RA 1405.
The Batangas senator is taking a different tack, saying that the financial
sector must not be dragged into the politics of the impeachment trial.
"The review is not meant to defang [these] laws but to make certain that no
one gets hurt or gets special treatment when the claws of these laws start to
pounce on the object of prey," he said.
A thoughtful review will allow a careful fleshing out of issues involved in
amending bank secrecy laws, including the need to prevent banks from becoming a
safe refuge of grafters and money launderers.
Chief News Editor: Sol Jose Vanzi
© Copyright, 2012 by PHILIPPINE
HEADLINE NEWS ONLINE
All rights reserved
PHILIPPINE HEADLINE NEWS
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