PH reputation unharmed by Wirecard scandal – BSP

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Metro Manila (CNN Philippines, July 2) — Investor attitude towards the Philippine banking system remains strong even as two big local banks are tagged in the Wirecard financial scandal, the central bank chief said.

"Overall, the Wirecard issue does not pose significant reputational impact on the Philippines. We also do not see a negative impact on investor optimism or shareholder confidence," Bangko Sentral ng Pilipinas Governor Benjamin Diokno told reporters Thursday.

Investor sentiment and even stock market fluctuations remain largely a reaction to the global pandemic rather than the Wirecard fiasco, he added.

BDO Unibank and the Bank of the Philippine Islands have been tagged in the financial crunch faced by the German payments firm after denying Wirecard's claim that they held $2.1 billion in trust.

This was discovered after Wirecard's auditor presented bank certificates to the local banks, which both said the documents were fake.

Wirecard has filed for insolvency and admitted that the missing money might have never existed in the first place.

Diokno refused to share details of the BSP investigation on the issue, but maintained that there is "no proof" that the funds are lodged with the two banks.

"So far, our investigation does not lead to any trace of the alleged missing 1.9 billion euros entering the Philippines, which by its value alone will trigger reporting to the Anti-Money Laundering Council and internal due diligence or review by our banks," he said, describing the Wirecard's issue as mainly a case of an "internal financial reporting fraud."

CNN Philippines reported earlier this week that a BPI treasurer-in-trust-for account carrying P100 million was certified in 2017 to fulfill the requirements for Wirecard e-Money Philippines, Inc. — the local arm of the German company — to register with the Securities and Exchange Commission.

BPI President Cezar Consing has said the bank cetificate looked fake and maintained that his bank never had a relationship with Wirecard.

However, a law firm said the bank account was legitimate and was used as repository of the paid-up capital, or "show money", of the local unit when they sought to operate in the Philippines.

READ: Law firm confirms working with Wirecard to open PH unit, says BPI account under treasurer's name real

However, Diokno did say that the case bolsters the BSP's numerous attempts for the easing of the country's bank secrecy laws to allow regulators to peer into deposit and transaction records and better guard against questionable deals and possible financial crimes. The measure has been long pending in Congress, but has never been passed by lawmakers.

He added that "strong corporate governance" protocols within banks would allow officials to catch rogue employees and prevent any wrongdoing.

Wirecard's former chief executive officer Markus Braun has been arrested in Germany for charges of accounting fraud, while its former chief operating officer Jan Marsalek is reportedly being pursued by authorities.

The Philippines' Department of Justice mounted its own probe upon learning that Immigration records showed that Marsalek may have flown to the country just last week and could be staying here.

Back here, a BDO marketing officer has been sacked while a BPI assistant manager has been suspended pending internal investigations, with the lenders saying they may have been involved in issuing the fake bank certificates to Wirecard.

"I would like to emphasize that the banking industry is resilient amid the Wirecard and the DOSRI transaction issues," Diokno added.

A separate probe has been carried out by the Anti-Money Laundering Council in an attempt to uncover who may be involved in the supposed money trail that found its way from Munich to Manila.