TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) AUb -6 P2:20 SENATE RECEIVED 1 S. No. 1047 Introduced by Senator Jinggoy Ejercito Estrada AN ACT AMENDING REPUBLIC ACT NO. 1405, OTHERWISE KNOWN AS THE SECRECY OF BANK DEPOSITS LAW EXPLANATORY NOTE The Bank Secrecy Law of the Philippines has long been a crucial piece of legislation that ensures the privacy of individuals and entities in their financial dealings. However, this law has also become a tool for abuse, particularly in shielding ill-gotten wealth, facilitating tax evasion, and obstructing efforts to combat money laundering and other financial crimes. With growing concerns regarding transparency and accountability, it has become evident that the current provisions of the law need to be revisited to strike a balance between safeguarding privacy and promoting the greater public interest, especially in ensuring financial integrity and justice. This proposed measure seeks to amend the Bank Secrecy Law by introducing provisions that will allow for greater transparency in financial transactions, particularly in relation to illicit activities. By modifying the law, this bill aims to empower government agencies and financial institutions to better combat corruption, money laundering, and the financing of terrorism, while still protecting the fundamental rights of Filipino citizens. The bill proposes specific amendments that will allow for exceptions to the secrecy of bank accounts in cases of suspected illegal activity, subject to proper
judicial process, thereby enhancing the country's ability to pursue cases of financial malfeasance effectively. This measure is particularly timely as the global financial landscape continues to evolve, and as international standards on transparency and anti-money laundering grow ever more rigorous. By aligning the Philippines with these global norms, this bill will strengthen the country's financial integrity, fostering a more transparent and accountable financial system. The amendment to the Bank Secrecy Law strives to create a transparent and fair environment that supports not just the arts, but all sectors of Philippine society, including business and governance. By ensuring that financial misconduct is more easily detected and prosecuted, the bill reinforces the idea that financial accountability is essential for fostering a fair economy, one that is capable of supporting industries like film, arts, and culture. In conclusion, the amendments to the Bank Secrecy Law are critical to advancing the nation's efforts to combat corruption and financial crimes. This measure is essential in creating a transparent financial ecosystem that supports equitable growth and prosperity for all Filipinos, while upholding their rights and ensuring that the country meets international standards of financial accountability. A similar version of this bill was filed by Senator Grace Poe during the 19th Congress. In view of the foregoing, the immediate passage of this bill is earnestly sought. JINGGOY EJERCITO ESTRADA
Shite D! TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -6 P2:20 SENATE RECAN DE! S. No. 1047 Introduced by Senator Jinggoy Ejercito Estrada AN ACT AMENDING REPUBLIC ACT NO. 1405, OTHERWISE KNOWN AS THE SECRECY OF BANK DEPOSITS LAW Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
Section 1. Section 2 of Republic Act No. 1405, otherwise known as "The Secrecy
of Bank Deposits Law" is hereby amended to read, as follows: "Section 2. All deposits, [of whatever nature with banks or banking institution in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities,] are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited [or invested] is the subject matter of the litigation, OR IN CASES WHERE THE INQUIRY OR EXAMINATION IS MADE BY THE BANGKO SENTRAL NG PILIPINAS (BSP) IN THE EXERCISE OF
ITS SUPERVISORY POWERS: PROVIDED, THAT UPON DETERMINATION BY THE MONETARY BOARD, THERE IS REASONABLE GROUND TO BELIEVE THAT A FRAUD, SERIOUS IRREGULARITY OR UNLAWFUL ACTIVITY HAS BEEN OR IS BEING COMMITTED AND THAT IT IS NECESSARY TO LOOK INTO THE DEPOSIT TO ESTABLISH SUCH FRAUD, IRREGULARITY OR UNLAWFUL ACTIVITY. THE AUTHORITY OF THE BSP TO INQUIRE AND EXAMINE DEPOSITS SHALL ALSO APPLY IN THE COURSE OF ITS INVESTIGATION OF CLOSED BANKS. AS USED IN THIS ACT, DEPOSITS SHALL REFER TO MONEY OR ITS EQUIVALENT RECEIVED BY A BANK IN THE USUAL COURSE OF ITS BUSINESS, AND FOR WHICH IT HAS GIVEN OR IS OBLIGED TO GIVE CREDIT TO A COMMERCIAL, CHECKING, SWINGS, TIME OR THRIFT ACCOUNT, EVIDENCED BY A PASSBOOK, CERTIFICATE OF DEPOSIT, OR OTHER EVIDENCE OF DEPOSIT, ISSUED IN ACCORDANCE WITH BSP RULES AND OTHER APPLICABLE LAWS, AS WELL AS SUCH OTHER OBLIGATION OF A BANK THAT FORMS PART OF ITS DEPOSIT LIABILITIES PURSUANT TO BSP RULES AND REGULATIONS. "THE RESULTS OF SUCH INQUIRY OR EXAMINATION SHALL BE FOR THE EXCLUSIVE USE OF THE BSP AND SHALL NOT BE MADE AVAILABLE TO ANY PERSON OR ENTITY, WHETHER PUBLIC OR PRIVATE, EXCEPT UNDER SUCH CONDITIONS AS MAY BE PRESCRIBED BY THE MONETARY BOARD OF BSP FOR THE PROSECUTION OF AN OFFENSE OR CRIME: PROVIDED, THAT NO DEPOSIT SHALL BE EXAMINED, INQUIRED OR LOOKED INTO BY THE BANGKO
SENTRAL NG PILIPINAS DURING AN ELECTION PERIOD TO THE PREJUDICE OF A CANDIDATE FOR AN ELECTORAL OFFICE: PROVIDED, FURTHER, THAT THE AUTHORITY OF BANGKO SENTRAL NG PILIPINAS TO INQUIRE, EXAMINE OR LOOK INTO DEPOSITS IN THE EXERCISE OF ITS SUPERVISORY POWERS SHALL NOT APPLY TO FUNDS DEPOSITED AND PLACED IN A DEPOSIT ACCOUNT PRIOR TO THE EFFECTIVITY OF THIS ACT. "THE FOREGOING EXEMPTIONS SHALL APPLY TO FOREIGN CURRENCY DEPOSITS IN BANKS OPERATING IN THE PHILIPPINES INCLUDING OFF- SHORE BRANCHES OF DOMESTIC BANKS."
Sec. 2. Section 3 of Republic Act No. 1405, is hereby amended to read as
follows: "Section 3. NO BANK OR FINANCIAL INSTITUTION, OR ANY OF ITS DIRECTORS, OFFICERS OR EMPLOYEES, SHALL BE SUBJECT TO ANY ACTION, CLAIM OR DEMAND IN CONNECTION WITH, AND SHALL BE HELD FREE AND HARMLESS FROM LIABILITY FOR, ANY ACT DONE IN COMPLIANCE WITH AN ORDER FOR INQUIRY OR EXAMINATION OF DEPOSITS FROM THE BSP. "HOWEVER, [flit shall be unlawful for any official, employee, of a banking institution OR THE BSP, to disclose to any person other than those mentioned AND UNDER SUCH CONDITIONS PROVIDED in Section 2 hereof, information concerning said deposits. IT SHALL ALSO BE UNLAWFUL FOR ANY PERSON TO USE THIS ACT FOR POLITICAL PERSECUTION OR HARASSMENT OR AS AN INSTRUMENTTO HAMPER COMPETITION IN TRADE AND COMMERCE."
Sec. 3. Repealing Clause. - The following are hereby repealed subject to the
provisions of this Act: a) Sections 2,3, 4 and 6 of Republic Act No. 1405, as amended, also known as the "Secrecy of Bank Deposits Act"; b) Sections 8 and 12-A of Republic Act No. 6426, as amended, also known as the "Foreign Currency Deposit Act of the Philippines" ", with respect to foreign currency deposits; c) Section 6 Republic Act No. 8367, also known as the "Revised Non-Stock Savings and Loan Association act of 1997" with respect to all deposits of whatever nature with a Non-Stock Savings and Loan Associations as provided under Republic Act No. 8367; d) Section 33 of Republic Act No. 6848, also known as the "Charter of the Al- Amanah Islamic Investment Bank of the Philippines", with respect to banking transactions relating to all deposits of whatever nature as provided under Republic Act No. 6848; e) Section 26(a)(2) of Republic Act No. 7353, also known as the Rural Banks Act of 1992, as amended; and f) Section 21(a)(2) of Republic Act No. 7906, also known as the Thrift Banks Act of 1995. All other Acts or parts of Acts, Special Charters, Executive Order, Rules and Regulations, which are inconsistent with the provisions of this Act, are hereby repealed.
Sec. 4. Separability Clause. - If any provision or section of this Act is held to
be unconstitutional or invalid, the other provisions or sections hereof, which are not affected thereby shall continue to be in full force and effect.
Sec. 5. Effectivity. - This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in a newspaper of general circulation in the Philippines Approved,