SEC pushes to ease bank secrecy shield

The Securities and Exchange Commission (SEC) is backing amendments to the bank secrecy law to give regulators and government agencies stronger tools to curb corruption and financial crimes, especially as investigations into the flood control scandal continue.

“As a corporate and capital market regulator, the SEC welcomes the proposed easing of our bank secrecy laws as a necessary measure to uphold trust and confidence in the Philippine capital market and overall economy,” SEC chairperson Francis Lim said on Wednesday. 

“Corruption is a major concern for local and foreign investors alike. It not only creates crippling uncertainties; it translates to real, unnecessary, additional costs of doing business in the country,” he stressed..

Tackling corruption

Several bills pending in the House of Representatives seek to lift the bank secrecy law to promote transparency and tackle corruption.

Proposed amendments would allow the Bangko Sentral ng Pilipinas (BSP) to examine deposits when fraud, irregularities, or unlawful activity are suspected.

Lim said access to critical financial information in cases such as insider trading, market manipulation, and investment fraud would greatly strengthen the SEC’s enforcement powers and send a clear signal that the capital markets are governed by transparency and accountability.

The SEC said the bank secrecy law has long shielded account owners in securities and corporate code violations, limiting enforcement. 

Amending it would allow the agency to verify company finances, gather bank records, and trace funds in suspected fraud cases.

“We are optimistic that further easing of bank secrecy — especially relating to securities law violations — can significantly aid enforcement efforts.

Flood control fiasco

A clear example is the BSP’s use of the Anti-Financial Account Scamming Act to investigate financial accounts linked to the flood control corruption fiasco,” Lim said.

The SEC chief said the reforms align with international standards, as the International Monetary Fund, Organisation for Economic Co-operation and Development, and Financial Action Task Force have urged the Philippines to ease secrecy rules to fight money laundering, tax evasion, and other financial crimes.