I’ve always wondered how two laws that sound almost exactly the same can mean two different things. I’m talking about our country’s Law on Secrecy of Bank Deposit and the US Bank Secrecy Act. Our version states that no one can look into your bank accounts. While the US version says that the government and financial institutions CAN spy on your bank transactions. The Filipino law was ratified in 1955 to encourage people to deposit their money in banks. The American one was enacted in 1970 to monitor and freeze the accounts of people engaged in illegal activities.
Excerpts from RP Bank Secrecy Act:
“All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office.”
Excerpts from US Bank Secrecy Act:
“The purpose is to require financial institutions to maintain appropriate records and file certain reports which have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. It is originally intended to aid investigations into an array of criminal activities, from income tax evasion to laundering of money by organized crime.” Another Bank Secrecy Act requirement is that individual taxpayers must file Treasury Form 90-22.1 to report foreign bank accounts that they own or have control over. The form is required if you have a total of $10,000 or more across all your foreign bank accounts.
Can you imagine what would happen if we adopted the US version? Can you imagine requiring banks to keep an eye out for suspicious financial transactions? Can you imagine requiring everyone to declare their foreign accounts? It’s an absolute nightmare (for those who have unexplained wealth)!
It’s quite tempting to think, especially for a simple-minded citizen like me, that if we put these things in place, it will be harder to hide ill-gotten wealth. And at the risk of committing petitio principii, I dare say that there would be less corruption in our government.
Now all we need to do is convince our legislators that they should amend our law on bank secrecy so that we can make everyone’s bank accounts, including theirs, open to scrutiny. Don’t say, “That’s impossible!” There are a lot of fresh voices in our Congress. Just look at Rep Juan Edgardo “Sonny” Angara’s Freedom of Information Act of 2008 (HB 3732) which was passed in Congress last month and is now with the Senate. Who knows? They might do it for love of country 
Isn’t that why they’re in power?
[...] Newsmaker: Money Laundering in the Philippines Two news reports caught my eye this week: Newsbreak’s Palace, Congress on collision course with SC on money-launder case and ABS-CBN’s Anti-money laundering campaign nets billion-peso suspicious deposits. According to the Law Encyclopedia, money laundering is the process of taking the proceeds of criminal activity and making them appear legal. After reading the articles, I found out why we should be concerned about money laundering and “Bank Secrecy”. I posted my views here. [...]
I guess any anti-money laundering measure will always have convenient loop holes and very hard to correct. One sure way to hold it in check is to require everybody to declare what is given away to others like the car being used by junior, the condo unit being used by someone’s pet teenager, In short people should declare other peoples’ money that he spent or transferred to him (her). A neighbor could help thru unsolicited informations. Such info cannot be a basis for libel or any suit at all.
Hi Kutkut. I just hope that the non-trapos who are more open to greater transparency will continue to push for the reforms they believe in.