Duterte certifies as ‘urgent’ bills on banks, laundering
MANILA, Philippines — A pending bill in the Senate that would allow banks to offload bad loans has been certified by the President as an urgent measure, along with amendments to the Anti-Money Laundering law, it was learned yesterday.
Malacañang said it transmitted to Senate President Vicente Sotto III the President’s certification dated Oct. 16, asking the urgent passage of Senate Bill No. 1849, the “Act Ensuring Philippine Financial Industry Resiliency against the Coronavirus Disease 2019 Pandemic.”
Now pending in second reading at the Senate, the bill aims to aid banks and financial institutions by allowing them to offload bad loans to cushion the economic impact of the COVID-19 pandemic.
In pushing for the bill, Duterte’s letter to the Senate underscored how the measure would “strengthen financial initiatives towards national economic recovery and maintain the stability of the financial sector amidst the COVID-19 pandemic.”
The bill was crafted on the premise that the State recognizes the role of banks and other financial institutions as mobilizers of savings and investments and in providing the needed financial system liquidity to keep the economy afloat.
“Thus, it is essential that banks and other financial institutions are able to maintain their financial health in order to cushion the adverse economic impact of the COVID-19 pandemic,” the bill read.
The bill also aims, among others, “to develop a sound financial sector for the country; address the non-performing asset problems of the financial sector; encourage private sector investments in non-performing assets; eliminate existing barriers in the acquisition of non-performing assets; to help in the rehabilitation of distressed businesses with the end in view of their becoming economic value-added contributors and improve the liquidity of the financial system which can be harnessed to propel economic growth and maintain financial stability.”
Malacañang said it also furnished Speaker Lord Allan Velasco copies of the certification.
Apart from this, Duterte also urged the Senate to immediately pass Senate Bill 1412, the proposed measure to strengthen the Anti-Money Laundering Act (AMLA), amending sections 3, 7, 10, 12, and 20 of Republic Act 9160.
Based on the explanatory note of the bill, there is a need to amend the current Anti-Money Laundering Law to further fight money laundering, terrorist financing and related threats to the integrity of the global financial system.
The President said the amendments are necessary for the country to “comply with legal standards for anti-money laundering and countering terrorism financing, as established by relevant international bodies.”
“Such compliance will avoid adverse finding against the country which could lead, among others, to increased cost of doing financial transactions, to the prejudice of the business sector and our overseas Filipino workers (OFWs),” he said.
Sen. Grace Poe, one of the bill’s authors, said the Senate bill has a counterpart measure, House Bill No. 6174, at the House of Representatives, introduced by Rep. Junie Cua.
Among the proposed amendments are: the inclusion of real estate developers and brokers as covered persons; the inclusion of tax crimes and violation of the strategic Trade and Management Act, which indirectly includes proliferation of weapons of mass destruction as predicate to money-laundering.
The Senate bill also aims to enhance the investigative powers of the Anti-Money Laundering Council (AMLC); authorize the AMLC to implement “Targeted Financial Sanctions” on proliferation financing; prohibition on the issuance of injunctive relief against freeze orders and forfeiture proceedings; and authorization of AMLC to preserve, manage or dispose of assets subject of Asset Preservation Order and Judgement Forfeiture.
Overall, the measure aims to improve the Philippines’ standing in the Financial Action Task Force (FATF), which was established to set and promote standards for the effective implementation of legal, regulatory and operational measures to combat money-laundering and terrorist financing.
The Philippines is a member of the regional arm of the FATF, known as the Asia Pacific Group on Money Laundering.
The Philippines is under the International Cooperation Review Group (ICRG)’s 12-month “observation period” from October 2019 to October this year. During this time, the Philippines is expected to remedy shortcomings under the Philippine Mutual Evaluations Report.
Amending certain provisions of the AMLA would prevent the Philippines from being grey-listed by the FATF.
Grey listing would mean that the European Union may impose “enhanced due diligence” (EDD) on Filipino nationals and businesses.
The EDD would entail additional cost and paperwork, higher interest rates/processing fees and higher cost of remittance for OFWs.