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Comelec money ban met with defiance

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Reluctance from the Palace and defiance from the Bangko Sentral ng Pilipinas (BSP) and the financial institutions it regulates greeted the “money ban” that the Commission on Elections (Comelec) imposed from May 8 to 13.

Instead of ordering law enforcement authorities to impose the money ban, President Aquino on Wednesday ordered the economic cluster of the Cabinet to first conduct a thorough study of the Comelec resolution.

The cluster consists of Justice Secretary Leila de Lima, Trade Secretary Gregory Domingo and Finance Secretary Cesar Purisima.

“While we understand very well the objective of the Comelec to want to prevent any vote-buying activities, this has to be studied,” said deputy presidential spokesperson Abigail Valte at a briefing in Malacañang.

The BSP, the Bankers Association of the Philippines (BAP), the Chamber of Thrift Banks (CTB) and the Rural Bankers Association of the Philippines (RBAP) were one in saying that the ban would be highly disruptive to business and would adversely affect financial and trade transactions in the country.

The Comelec prohibited the withdrawal of more than P100,000 from banks and other financial institutions to stop vote-buying on Election Day.

Under Resolution No. 9688, the poll body also prohibited the “possession, transportation and/or carrying” of more than P500,000 in cash.

“The BSP supports the Comelec’s goal to ensure clean and honest elections in the Philippines. However, the BSP believes that limiting cash withdrawals to P100,000 and for the monetary authority to enforce this may not be the best way to achieve the goal,” the central bank said in a statement.

Deposit secrecy laws

The BSP said that besides being disruptive to economic activities in the country, implementation of the money ban would run counter to deposit secrecy laws.

This is because investigation of violations to the money ban would entail checking of deposit accounts, which the laws on secrecy of peso and foreign currency-denominated deposits prohibit.

“The BSP is constrained from enforcing the Comelec resolution because this would necessarily entail looking into bank deposit accounts. This is essentially unsound and in violation of Republic Act No. 1405 [secrecy law on peso deposits] and RA 6426 [secrecy law on foreign currency-denominated deposits],” the central bank also said.

Comelec weighing options

Amid the opposition to the ban, Comelec Chairman Sixto Brillantes said he and the other election commissioners were expected to decide Wednesday night on the fate of the money ban.

“We are discussing whether we should recall, amend or supplement or simply retain (the money ban order),” he told reporters at the Supreme Court before attending the oral arguments on a petition for a review of the source code for counting machines.

But he shrugged off suggestions that the order was crazy, saying that the Comelec had studied the ban for two months while his critics only read the order on Tuesday or Wednesday.

Brillantes noted that the BSP did not say that it would not implement the money ban. He said he got a letter from the BSP though advising him “if possible not to implement” the ban.

Asked whether he would take the BSP advice: “I don’t think we should take the advice of anybody. We are supposed to be an independent commission.”

De Lima questions order

Justice Secretary De Lima said she had “reservations about the validity or constitutionality” of the Comelec order even as she recognized that the poll body “has broad powers” during the election period and the order’s objective “is laudable.”

De Lima said the Comelec order “seems to have engaged in over-inclusion, which is similar to over-breadth doctrine, hence raising issues of possible violation of equal protection clause.”

“And precisely due to such ’over-inclusion,’ the implementation of the resolution may have unintended dire or negative consequences that may far outweigh the benefits,” the justice secretary said in a text message to reporters.

Legitimate expenses

“Also, doesn’t the Comelec realize that candidates and political parties have legitimate expenses at this stage of the election period up to Election Day that need to be transacted in cash, such as poll watcher’s fees?” De Lima said.

She said the ban also “seriously undermines the constitutional proscription on laws impairing the obligations of contracts when it effectively limits cash transactions involving even legitimate contractual obligations to P100,000.”

While the poll body used its power to deputize government agencies like the BSP and the Anti-Money Laundering Commission as among its bases for the order, the Constitution provides that such power “bear the concurrence of the President,” De Lima said.


Banks said they were not inclined to follow orders from the Comelec.

BAP, CTB and RBAP said their members considered the ban as an impractical solution to the problem of vote-buying and that they would take orders only from the BSP, their regulator.

BAP is an organization of universal and commercial banks. CTB is the group of thrift banks and RBAP is composed of rural banks in the country.

“[Money ban] will hamper the commercial and business transactions of banks in general. Workers and suppliers of certain industries are paid weekly. Public markets operate on cash basis daily,” BAP president Lorenzo Tan said in a text message.

CTB said elections should not cause disruptions to businesses.

Serious implication

“While we recognize and support the Comelec’s efforts to ensure clean and honest elections, we are concerned that limitations or hindrances on withdrawals, check encashment, and transportation of cash may disrupt banking operations as well as normal business and commercial transactions in the country,” CTB said in a statement.

In a separate statement, RBAP president Edward Leandro Garcia said the group would comply only with BSP regulations.

“We will respect and follow the decision of the BSP as a regulating body, especially since the Comelec resolution may cause serious implications not only to the services we provide to our people in the countryside but also with the entire rural banking industry,” Garcia said.


Business leaders described Comelec Resolution No. 9688 as poorly crafted.

“It will not really address concerns on vote-buying but will create difficulties for businesses, especially medium and small establishments (SMEs), and workers who depend on them,” said Donald Dee, vice chairman of the Philippine Chamber of Commerce and Industry.

Dee noted that businesses too small to automate payroll were still paying wages in cash. “What will happen to workers who are supposed to get their wages on Saturday? Will small businesses have to make several small withdrawals instead of P100,000 or more? That’s too much hassle for them,” Dee said.

The Management Association of the Philippines (MAP) said the resolution seemed “well-intentioned” but it would adversely affect businessmen who have to pay suppliers, usually in cash.

“(The amount) P100,000 is not that big these days so the impact really is on SMEs. If I were a businessman I may just sacrifice being liable and explain later that I used the money for my business. In other words, it is a law that people will not take seriously,” MAP president Melito Salazar said in a text message.

Besides, Salazar said, it was likely that the money to buy votes had already been withdrawn.

No more time

Election lawyer Romulo Macalintal said the Comelec had no more time to implement its controversial resolution.

Electoral Reforms Law of 1987 (RA 6646) states that Comelec resolutions take effect only seven days after they are published in two newspapers of general circulation, Macalintal said.

“The Comelec resolution on the money ban cannot be implemented due to time constraints. If the resolution (were) published it would be effective May 15 or two days after the May 13 polls,” Macalintal said.

Archbishop Emeritus Oscar Cruz said the ban would not be effective because certain candidates were getting money not from banks to finance their campaign but from the illegal numbers racket or “jueteng,” donations and other illegal activities.—With reports from Michael Lim Ubac, Philip C. Tubeza and Jocelyn R. Uy

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Tags: Bangko Sentral ng Pilipinas , Banking , Business , Commission on Elections (Comelec) , Elections , Laws , money ban , Politics , reactions

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