Sen. Osmeña: PH may suffer if money laundering is proven

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Metro Manila (CNN Philippines) — Sen. Serge Osmeña has warned that Filipinos will suffer if the country lands in the blacklist of the Financial Action Task Force on Anti-Money Laundering.

This comes after the country's financial regulators detected $100 million in illicit funds that have entered the Philippine banking system.

Osmeña explained that international financial institutions will thoroughly check the money going in and out of the country.

"Kapag dumating tayo sa blacklist, malilintikan tayo sapagkat lahat ng mga bangko natin, hindi na makaka-transact soon sa New York at sa London," explained Osmeña, who chairs the Senate Committee on Banks, Financial Institutions and Currencies.

[Translation: "If we reach the blacklist, we will be at a loss because our banks will not be able to transact with their counterparts in New York and London."]

As a result, Philippine banks might pay higher transaction costs when dealing with foreign banks. This might affect overseas Filipino workers' remittances, which might be targeted for costly scrutiny.  It might also lead to greater difficulty for Philippine consumers to to buy imported items online using their credit cards.

"It's going to make life harder for everybody. Your credit cards probably will not be honored by international banking institutions," Osmeña said.

The Anti-Money Laundering Council is conducting an investigation, but refuses to divulge further details.

"It is the policy of the Anti-Money Laundering Council (AMLC) to maintain confidentiality in any and all of its on-going investigations. Rest assured that the AMLC is fully committed to combating money laundering and helping preserve the integrity of the financial system pursuant to its legal mandate," it said.

The report revealed that China-based hackers hit money in some banks in Bangladesh. They then sold the money to the black market and deposited funds in several banks in Makati.

High net worth gamblers from Macau allegedly used the money to play in local casinos, and then moved the funds out of the Philippines in just a few days.

The Bureau of Internal Revenue (BIR) wants to initiate an investigation, but their hands are tied.

"Eh diba, hindi kami pwedeng makipagusap sa AMLC? Pingabawalan kami so anong role namin?" asked BIR commissioner Kim Henares.

[Translation: "We are not allowed to talk to the ALMC."]

"Ngayon ang AMLA (Anti-Money Laundering Act) pag nagfile na ng kaso at naging public document na yan, pwedeng naming reviewhin, tingnan namin," she added.

[Translation: "Based on the Anti-Money Laundering Act, if a case is filed and the document becomes public, we can review and look at it."]

The palace is open for amendments to the AMLA, such as including casinos to scrutiny.

"The Anti-Money Laundering Council is expected to act decisively on possible violations of the Anti-Money Laundering Act of 2001 (AMLA) that are detrimental to the country. It is important to ensure the integrity of financial and banking transactions and to thwart illegal activities that are channelled through the country's financial system. If there are perceived weaknesses, the AMLC should initiate reintroduction of amendments to the AMLA," said Communications Secretary Sonny Coloma.

Osmeña said the exclusion of casinos in the law served as a loophole for criminals.

"We don't want to develop a reputation that the Philippines is a rogue country as far as money laundering activity is concerned."

He is optimistic the country's bank secrecy laws will be eased by the next administration.

Meanwhile, the Philippine Amusement and Gaming Corp. (PAGCOR) launched its own probe and is now seeking the comments of involved casinos.

"PAGCOR has launched its own inquiry regarding the news that came out yesterday. The agency has already written the two licensees and Midas Hotel and casino to comment on the news article. We shall await for their reply," said Maricar Bautista, Assistant Vice President, of PAGCOR's Corporate Communications Department.