Deposits Disclosure Act

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES UL -9 12:50 First Regular Session SENATE S. No. _ Introduced by Senator FRANCIS N. PANGILINAN AN ACT ALLOWING DISCLOSURE OF DEPOSITS, REPEALING FOR THE PURPOSE THE PERTINENT LAWS ON SECRECY OF DEPOSITS EXPLANATORY NOTE The "era of bank secrecy is over,"' a declaration made by the Group of 20 or G20 Leaders as early as 2009 and reinforced by the 2014 OECD standard for automatic exchange of financial information. Despite this, the Philippines remains the sole country with highly restrictive bank secrecy laws, severely impeding its fight against tax and money laundering. 4 This antiquated framework denies the State's crucial tools for fiscal integrity and international financial standing. The Department of Finance (DOF) highlights that these laws contribute to hundreds of billions of pesos in uncollected taxes and duties annually, significantly compromising funding for essential public services. Furthermore, this policy undermines the country's effort to enhance transparency, 1 Global Forum on Transparency and Exchange of Information for Tax Purposes, "Transparency and Exchange of Information for Tax Purposes-Multilateral Co-operation Changing the World." Available at https://www.oecd.org/content/dam/oecd/en/networks/globat-forum-tax-transparency/global-forum-10-years-report.pdf 2 The Group of Twenty (G20) is the premier forum for international economic cooperation. It plays an important role in shaping and strengthening global architecture and governance on all major international economic issues. 3 Organisation for Economic Co-operation and Development. Accessed on July 7, 2025. * Bangko Sentral ng Pilipinas. "The Laws on Secrecy of Bank Deposits: A Legal Primer." Published in 2024. Available at https://www.bsp.gov.ph/Media and Research/Primers%20Faqs/Primer on Bank Secrecy.pdf. Accessed on July 6, 2025. 5 Manila Bulletin, "DOF estimates P668-B tax losses due to bank secrecy", Published on 03 May 2017, Available at https://business.m b.com .ph/2017/05/03/dof-estimates-p668-b-tax-losses-due-tobank-secrecy/. Accessed on July 6, 2025.

deter illicit financial flows, and improve its global financial reputation, including its standing with the Financial Action Task Force (FATF). The International Monetary Fund (IMF) has noted that these secrecy laws undermine financial stability, integrity, and banking sector development, urging prompt legislative amendments to grant the Bangko Sentral direct and full access to depositor information for effective supervision. Amending said laws is crucial in fostering a more robust and transparent financial system, attracting legitimate investments, and ensuring equitable tax collection. The immediate passage of this bill is earnestly sought to align the Philippines with global transparency standards, safeguard national revenue, uphold international financial commitments, and enhance the rule of law. FRANCIS N. PANGILINAN Senator

TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) First Regular Session ) SENATE S. No. _ Introduced by Senator FRANCIS N. PANGILINAN AN ACT ALLOWING DISCLOSURE OF DEPOSITS, REPEALING FOR THE PURPOSE THE PERTINENT LAWS ON SECRECY OF DEPOSITS Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. - This Act shall be known as the "Deposits Disclosure Act."

Sec. 2. Declaration of Policy.- It is hereby declared the policy of the State to

3 effectively combat domestic and global tax evasion, money laundering and other financial crimes, and corruption; to promote harmonious and supportive international relations; and to comply with international standards on transparency. It is likewise the policy of the State to protect the fundamental human right of privacy of communication, while ensuring free flow of information to promote innovation and growth.

Sec. 3. Non-Confidentiality of Deposits.- All deposits of whatever nature of

currency denomination with banks and non-banking financial institutions in the Philippines are hereby no longer considered as absolutely confidential in nature and can now be examined, inquired, or looked into under the following legitimate purposes, subject to, if applicable, Section 4 of this Act: a) Upon written permission or waiver of the depositor; b) In the course of investigation or inquiry by the Office of the Ombudsman, or pursuant to or in relation to its Constitutional and/or statutory mandate; c) Upon written permission or waiver of the depositor;

d) In the course of investigation or inquiry by the Office of the Ombudsman, or pursuant to or in relation to its Constitutional and/or statutory mandate; e) Upon order of a competent court in relation to a case pending before it; f) Investigations by the Senate, the House of Representatives ("HoR"), or any of its Committees, in the course of, or pursuant to, the exercise of its Constitutional and/or statutory mandate; 9) Investigations necessary in the exercise of its mandates by any government agency or financial regulator, including, but not limited to, the Anti-Money Laundering Council ("AMLC"), Bureau of Internal Revenue ("BIR"), the financial regulators such as the Bangko Sentral ng Pilipinas ("BSP"), Securities and Exchange Commission ("SEC"), Philippine Deposit Insurance Corporation ("PDIC"), and Insurance Commission ("IC"); h) Inquiry by independent auditors or a qualified agent engaged by the bank to provide independent audit or technical services subject to a strict confidentiality agreement; and i) Inquiry on the account/s of a deceased depositor by his/her immediate family members or compulsory heirs. Further, any examination or inquiry and any results thereof shall be for the exclusive use of the requesting body and shall not be made available to any persona or entity, whether public or private, except upon prescription by the persons enumerated under Section 4 of this Act, as the case may be. Furthermore, no court shall issue a temporary restraining order or writ or injunction against any act to examine, inquire, or look into bank deposits except upon order issued by the Court of Appeals or the Supreme Court.

Sec. 4. Authority to Issue Order. - In cases where the deposit shall be examined,

inquired, or looked into, the authority to issue the Order requiring such examination or inquiry shall be limited to the following persons; a) In the case of Section 3 (B) of this Act, the Ombudsman; b) In the case of Section 3 (C) of this Act, the Regional Trial Courts, the Court of Tax Appeals, the Court of Appeals, or the Supreme Court; c) In the case of Section 3 (D) of this Act, the Senate President of the Speaker of the Hor, as the case may be; and

d) In the case of Section 3 (E) of this Act, the head of the government agency or financial regulator concerned, provided that if the government agency or financial regulator has a governing board or council, consent of the latter shall also be required.

Sec. 5. Clearing House, Authentication of Order. - The BSP shall act as the

6 clearing house of any order issued pursuant to Section 4 hereof. It shall ensure that 7 the Order is authentic and for a legitimate purpose and is not violative of RA No. 10173 8 of the Data Privacy Act of 2012.

Sec. 6. Mandatory Disclosure. - Pursuant to the provisions of this Act, the bank

10 or non-bank financial institution concerned, their officers, and employees are 11 mandated to disclose and report the requested deposit account information; the bank 12 or financial institution concerned, their officers, and employees shall not refuse to 13 allow such examination or to provide the desired information.

Sec. 7. Right to Privacy. - Inquiry, examination, disclosure or use of deposits

15 shall always be for a legitimate purpose pursuant to Section 3 and in relation to 16 Sections 4 and 5 of this Act and shall not be used in any manner to harass, threaten, 17 or violate the right to privacy of any person.

Sec. 8. Penalty Clause. - Any abuse on the initiation, conduct, or use of any

19 inquiry or examination of accounts or the refusal to disclose or report deposits as 20 required pursuant to the provisions of this Act without justifiable reason shall, upon 21 conviction and without prejudice to other liabilities provided by law, suffer the penalty 22 of imprisonment of at least three (3) years or a fine of at least two hundred thousand 23 pesos or both, upon the discretion of the court. In the case of government officials or employees, the penalty of perpetual absolute disqualification to hold public office shall be likewise imposed.

Sec. 9. Implementing Rules and Regulations. - Within sixty (60) days from the

effectivity of this Act, the BSP shall, in consultation with the Department of Justice and other concerned financial regulators, promulgate the necessary implementing rules and regulations for the effective and efficient enforcement of this Act. Provided, That the implementing rules and regulations shall take effect fifteen (15) days following its publication in two (2) newspapers of general circulation.

Sec. 10. Separability Clause. - If any of the provisions of this Act is declared

invalid, the other provisions not affected thereby shall remain in full force and effect.

Sec. 11. Repealing Clause. - The following provisions of the law insofar as they

relate to deposits are hereby repealed: a) 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 of 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 Association 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 55(b) of Republic Act No. 8791, also known as the General Banking Law of 2000; f) Section 26(a)(2) of Republic Act No. 7353, also known as the Rural Banks Act of 1992; 9) Section 21(a)(2) of Republic Act No. 7906, also known as the Thrift. Banks Act of 1995; n) Section 22 of Executive Order No. 81, also known as the 1986 Revised Charter of the Development Bank of the Philippines with respect to banking transactions relating to all deposits of whatever nature; and i) Section 11 of Republic Act No. 9160, as amended, also known as the Anti- Money Laundering Act of 2001, as amended, in so far as it requires an order of any competent court before the AMLC can inquire into bank deposits, including related accounts, with any banking institution or non-bank financial institution.

All laws, presidential decrees, executive orders, rules and regulations, and other 2 issuances, or any parts thereof, inconsistent with this Act, are hereby repealed, modified, or amended accordingly.

Sec. 12. Effectivity. - This Act shall take effect fifteen (15) days after its

5 publication in the Official Gazette or in at least two (2) newspapers of general 6 circulation. Approved,