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Bill seeks stronger BIR, BSP powers |
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The Philippine STAR 06/28/2005
Amid serious allegations of bank accounts being used by senior police officials to stash unlawful and untaxed income from jueteng kickbacks, Negros Oriental Rep. Herminio Teves has proposed new legislation that would reinforce the powers of regulators, including the Bureau of Internal Revenue (BIR), to inspect bank deposits for the purpose of curbing tax evasion as well as illicit banking practices. Under Teves’ House Bill (HB) 2403, which seeks to amend the 50-year-old Bank Deposits Secrecy Act, examiners from the BIR, Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) may scrutinize bank deposits "for supervisory and tax audit purposes." "The absolute confidentiality of bank deposits, over the years, has abetted unsound banking practices, which, in turn led to the collapse of a number of banks and the financial ruin of tens of thousands of depositors," Teves lamented. At present, the Bank Deposits Secrecy Act provides that deposits are entirely secret and may not be examined by any person or office, except 1) when the depositor issues a written permission, 2) in cases of impeachment, 3) when there is a court order in cases of bribery or dereliction of duty by officials, or 4) when the deposit is the subject of a lawsuit. The Anti-Money Laundering Law also allows the probe of deposits, but only with a court order. "Owing to the absolute secrecy of deposits, unscrupulous, bankers have managed to manipulate financial reports to the detriment of the depositing public," Teves said, adding that unchecked fraudulent acts involving banks have also undermined the financial system. "Sadly, it is only after the Monetary Board has already closed down an erring bank that regulators are able to examine deposits and belatedly discover unsound banking practices," Teves added. In a recent global survey, it was found that the Philippines is the only country that has an obsolete law that bars regulators from examining deposit records and determining the actual financial condition of banks, Teves pointed out. Teves’ bill seeks to broaden the BSP’s powers by allowing it to delve into deposits simply "for supervisory purposes." The bill also grants similar powers to the PDIC. Additionally, the BIR may also inquire into deposits "for tax audit purposes." To prevent abuse and to safeguard depositors, Teves’ bill penalizes erring officials and bank officers who illegally disclose any information concerning deposits to any person other than those authorized by law to access such information. They shall face up to five years in prison plus a fine of up to P100,000. |
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