Easing bank secrecy laws will aid in the implementation of the Anti-Financial Account Scamming Act (AFASA) in going after financial criminals—including corrupt politicians—according to Bangko Sentral ng Pilipinas (BSP) General Counsel Roberto L. Figueroa.

Speaking on the sidelines of the BSP’s recent interagency Information Sharing Agreement (ISA) signing on Friday, Figueroa said the central bank’s proposed reforms to the country’s existing bank secrecy laws will enhance AFASA’s ability to go after financial scammers, from small-time crooks to politicians implicated in graft and plunder.

“[The existing] bank secrecy law[s]—that's the problem right now,” he said. “One limitation of AFASA is that if we invoke our powers under AFASA, the information we gather can only be used for investigating and prosecuting violations of AFASA. Now, the relaxation or the easing of the bank secrecy law, that would be broader,” he added.

Philippine bank secrecy is primarily governed by Republic Act No. 1405 and Republic Act No. 6426. These laws make bank deposits confidential and generally prohibit disclosure, except in limited cases such as court orders, impeachment proceedings, or authorized investigations under other laws like the Anti-Money Laundering Act. The purpose is to protect depositor privacy and maintain trust in the banking system.

Republic Act No. 12010 (AFASA) introduced a targeted exception to these secrecy protections. When financial accounts are suspected of being used for scams, the Bangko Sentral ng Pilipinas (BSP) and relevant authorities may investigate and verify transactions even if this requires accessing otherwise confidential bank information. In these situations, certain secrecy and privacy restrictions under existing laws do not apply.

At the onset of investigations into the flood control scandal last year, AFASA was invoked by the BSP for the first time to investigate suspicious accounts used to move illicit funds, obtain banking information despite bank secrecy restrictions, and require banks to temporarily hold suspicious funds for 30 days, all while coordinating with relevant law enforcement personnel.

The probes focused partly on money muling, which AFASA criminalizes—using financial accounts to receive, transfer, or withdraw proceeds of crime. Since AFASA suspends bank secrecy protections for accounts under investigation, regulators could legally inspect financial records tied to the scheme.

“For example, if you're a corrupt politician, so [if] you receive commissions or bribes from a briber, if you deposit that in a financial account, that's clearly a violation of AFASA. But again, if the easing or relaxation of bank secrecy law also becomes a law, we can also use that power to prosecute him for other crimes. Because AFASA introduced new crimes, one of which is money muling,” said Figueroa.

The Anti-Money Laundering Council (AMLC), chaired by BSP Governor Eli M. Remolona Jr., has frozen about P25 billion in assets of individuals or entities implicated in the “floodgate” controversy, with findings from AFASA playing an integral role in certifying the veracity of such financial crimes. Figueroa noted that once money traced to an alleged crime is deposited into an account, it falls under the purview of the law. He added that the BSP’s ongoing push for reforms to bank secrecy laws—which would provide the central bank provisional access to financial account data under reasonable suspicion—would ease the process of catching criminals, including corrupt politicians.

“The reality is if you're a scammer, if you're a [fraudster], or you're a money launderer, or you're a politician engaged in graft and corruption, the reality is the money that you're going to get or that you will embezzle, that will have to be transferred somewhere,” Figueroa said.

“The way AFASA defines the activities that are prohibited, like money muling specifically, it doesn't distinguish between a small-time consumer or a big-time consumer,” he added.

“Money muling as a prohibited act and defined under AFASA is that so long as the proceeds of a crime or offense have been deposited, withdrawn, or transferred in a financial account—which would include, again, bank accounts or e-wallets—that would be considered money muling.”

Figueroa previously expressed support for the BSP’s ongoing push for reforms to Philippine bank secrecy laws, which remain among the strictest in the world.

“I'm optimistic that it will be passed by Congress given the public statements made by our legislators,” he told reporters at a BSP event in Dumaguete City earlier this month. “This advantage being used by perpetrators of illegal or unlawful activities is definitely connected or related to these flood control projects, and then of course, the allegations of illegal wealth or hidden wealth.”

Figueroa’s comments on Friday followed the signing of an information sharing agreement with the Cybercrime Investigation and Coordinating Center (CICC) and the Securities and Exchange Commission (SEC) to help combat the growing number of financial scams in the Philippines. The agreements authorize the lawful sharing of confidential financial account information to support investigations involving scams and related offenses, in accordance with existing bank secrecy laws and regulatory safeguards.