Ayala Avenue, dubbed the Wall Street of the Philippines. Source: Wikimedia
Manila is scrambling to tighten rules on illicit fund transfers after an US$81-million bank theft exposed lax security and the weakness of the archipelago’s money-laundering laws.
A further US$850 million was supposed to be wired to personal bank accounts in the Philippines but was blocked by the authorities at the last minute, the Philippine Daily Inquirer reported.
Bangladesh Bank’s foreign reserves held at the Federal Reserve Bank of New York were transferred to the Philippines’ Rizal Commercial Banking Corporation (RCBC) by hackers and then ended up in Philippine casinos in February. The Philippine Anti-Money Laundering Council is launching a probe into the scandal that has shaken the banking world.
John Gomes, Bangladeshi ambassador to the Philippines, said Dhaka wanted the money returned, even though the Philippine gambling regulator said that tracing the funds would be a tricky task.
The Philippine Senate is looking into loopholes in the country’s money-laundering legislation. This week MPs and financial and gambling officials were resolute in including casinos under the act, which was amended in 2012 to exclude casinos.
With the May 9 presidential election looming, the nation’s politicians will be distracted and it is seen as unlikely that law will be amended before President Benigno Aquino leaves office in June. The Securities and Exchange Commission, Bangko Sentral ng Pilipinas or the Philippines’ central bank, and the Insurance Commission, which together form the Anti-Money Laundering Council, have moved to bolster existing policies.
On Thursday, the SEC said it had strengthened its anti-money laundering framework. This includes prohibiting anonymous accounts being set up under fictional names, requiring brokers to keep an electronic database containing client information. A ban on brokers creating accounts without face-to-face meetings has been enforced and the SEC is empowered to conduct surveillance and investigations by requiring brokers to provide account details.
The senate investigation revealed that a RCBC Makati branch manager Maia Santos Deguito, created a fake account in which stolen funds were deposited.
She refused to comment on the charges, invoking her right against self-incrimination.
Manila sought help from the US Federal Bureau of Investigation and its counterpart in Hong Kong.
Bangladesh Bank spokesman Muhammad Asaduzzaman said the bank had been able to recover some of its funds. “So, we don’t know where those funds went”.
The Philippine gambling regulator said it welcomed the proposal to cover casinos under the Philippines’s anti-money laundering law but added that it was dubious if such a move would guarantee against laundering.