PH one of few countries with secrecy of bank deposits—Tetangco

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. FILE PHOTO

The Philippines is among the only two or three countries in the world which have secrecy of bank deposits, Banko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. disclosed on Monday.

“I think there are only two at this point and we’re one of them,” Tetangco said during the hearing of the committee on banks joint with the committee on ways and means.

The BSP official was responding to Senator Francis Escudero, chairman of the committee on banks, who asked how many countries in the world have existing bank secrecy laws.

Aside from the Philippines, Tetangco said the other countries that have secrecy of bank deposits are Lebanon, and probably North Korea.

“So wala ng ibang bansa sa mundo ang may (there are no other countries in the world that have a) secrecy of bank deposits?” Escudero asked again.

“Siguro yung (Perhaps) North Korea,” the BSP chief answered.

Escudero then asked if the bank secrecy laws are still effective and if there would be any adverse effects, such as bank runs, if Congress decides to repeal them.

“Pag ni-repeal namin (if we repeal it), worse case, ang secrecy of bank deposits, magkaka-bank run po ba (would there be a bank run)? Mag aalisan po ba ang mga tao sa bangko dahil baka malaman ang bank accounts nila, ganun po ba yan (Would people close their accounts because these would be open to public?)?” asked the senator.

He noted that other countries that have lifted the secrecy of bank deposits seemed to have survive even without it.

“To your knowledge, was there any adverse effect to the banking sector when it was lifted in those jurisdictions? I’m sure with some meron, with the others wala (there were adverse effects, with the others, there were none)…” Escudero said.

Responding to the senators’ queries, Tetangco said he was not aware of “any adverse impacts in the form of bank runs” in other countries that have lifted their bank secrecy laws.

“Your right chairman, because if only two or three countries in the world have bank secrecy laws, then the concern really is not with respect to possible bank runs because these laws have been lifted in other countries. The concern really is for the possibility of dirty money or laundered money pending up in those jurisdictions that have bank secrecy laws,” he said.

Tetangco could not give a categorical answer, however, when asked if the BSP would support a repeal of the Secrecy of Bank Deposits Law.

Instead, the BSP chief expressed some concerns if the law is repealed.

“Our main concern, Mr. chairman with respect to the Bank Secrecy Law is in terms of being able to ensure that existing regulations are being complied with. That’s number one. And number 2, to provide some form of deterrent for possible fraud, unlawful activity or irregularity…” Tetangco said. RAM/rga

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