BSP tracks huge cash flows amid flood mess

The Bangko Sentral ng Pilipinas (BSP) has launched an investigation into unusually large cash movements in the financial system, as it probes potential links to the recently exposed corruption scandal in flood control projects.

The shoddy flood control works involved hundreds of billions of pesos spirited away by legislators, Department of Public Works and Highways (DPWH) officials and contractors who may have carted off the money to safer foreign destinations.

In a television interview Friday, BSP Governor Eli Remolona Jr. confirmed the central bank was tracking “unusually large flows of cash” that may be connected to anomalous infrastructure project transactions.

“This flood control scandal was as much a shock to us as it was to you. But we’re working hard to fix things,” Remolona said.

“We’re making a lot of inquiries. We’re trying to identify the big flows of cash throughout the financial system, the unusually large flows of cash. But not just cash, any financial transaction that looks unusual,” he added.

Stunning magnitude

According to Remolona, many of the flagged transactions appeared to have been channeled through government-owned financial institutions, consistent with the flow of public funds used for infrastructure projects.

“That makes sense because it’s government money so that it will go through government financial institutions. So that’s what we’ve seen so far,” he said.

The BSP chief admitted being stunned by the magnitude of the cash involved in the schemes.

“The amounts involved, we had no idea. I think you and I knew there was corruption all along, right? But not on this scale. And the sight of the piles of cash on a table. That’s shocking. I didn’t know this was all done in cash and in such amounts. So that was shocking,” he said.

The investigation comes just days after the BSP issued Circular No. 1218 aimed at tightening regulations on large cash transactions.

Effective 18 September, all cash transactions exceeding P500,000 (or its equivalent in foreign currency) must now be processed through traceable channels, including bank checks, online fund transfers, direct credit to deposit accounts and digital payments.

“We want to make it more difficult for the contractors, for the guys involved in this flood control mess to take money out of the banks,” Remolona explained.

The new policy is part of the BSP’s broader effort to curb money laundering, enhance financial transparency and reduce risks associated with cash-heavy transactions.

The probe follows the Senate hearings in which former DPWH officials alleged massive kickbacks from flood control projects to both sitting and former lawmakers.

The revelations have prompted investigations by multiple government bodies, including the Office of the Ombudsman, Commission on Audit, and now the BSP.