Financial Crime World

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PDIC and Bangko Sentral Scrutinize Deposit Records in Event of PCA Failure

In the event of a Philippine Charter on Banks (PCA) failure due to capital deficiency, the Philippine Deposit Insurance Corporation (PDIC) and the Bangko Sentral ng Pilipinas (BSP) may conduct an examination or inquiry into the deposit records of a bank.

Disclosure of Deposit Information

According to the law, banks and their officers and employees are mandated to disclose and report required deposit account information to the PDIC and BSP or their authorized representatives. This power is not violative of laws protecting the secrecy of bank deposits, including:

  • The Law on Secrecy of Bank Deposits
  • Foreign Currency Deposits Act
  • General Banking Law of 2000

Confidentiality of Deposit Information

However, the PDIC and BSP, as well as their officers and employees, are prohibited from disclosing deposit information to any person, government official, bureau, or office. Unauthorized disclosure is subject to penalties under laws on secrecy or confidentiality of bank deposits.

AMLC Investigates Terrorist Financing

The Anti-Money Laundering Council (AMLC), upon the issuance of a preliminary order of proscription or designation by the court, may investigate any property or funds related to financing terrorism or violation of certain sections of the Anti-Terrorism Act of 2020. The AMLC may also:

  • Inquire into or examine deposits and investments with any banking institution or non-bank financial institution and their subsidiaries and affiliates without a court order

Terrorism Financing Prevention and Suppression Act

Under the Terrorism Financing Prevention and Suppression Act, the AMLC is authorized to investigate property or funds related to financing terrorism or acts of terrorism. For this purpose, the AMLC may:

  • Examine deposits and investments with any banking institution or non-bank financial institution and their subsidiaries and affiliates without a court order

Audit of Government Deposits

The Commission on Audit (COA) is authorized to examine and audit government deposits pertaining to:

  • Revenue and receipts
  • Expenditures or uses of funds
  • Properties owned or held in trust by the government or its subdivisions, agencies, or instrumentalities. The COA’s authority extends to all matters relating to:
    • Examination and inspection of books, records, and papers
    • Audit and settlement of accounts

Investigation To Recover Ill-Gotten Wealth

The Presidential Commission on Good Government (PCGG) may conduct investigations to recover ill-gotten wealth accumulated by former President Ferdinand E. Marcos and his associates. In the course of these investigations, the PCGG may:

  • Issue subpoenas requiring the attendance and testimony of witnesses and/or
    • The production of documents as may be material to its investigation

These laws underscore the importance of transparency and accountability in the financial sector, while also recognizing the need for confidentiality in certain circumstances.