Money laundering, financial fraud to undermine PH economy—IMF

Senate blue ribbon chairman Teofisto Guingona III said the perception that Filipino banks have been accommodating deposits from illegal transactions “affect investors’ perception on whether or not we have a safe banking system.

MANILA, Philippines—The International Monetary Fund’s (IMF) recent warning that money laundering and other illegal finance-related activities could undermine a country’s financial system has made it urgent for Congress to pass the second round of amendments to the Anti-Money Money Laundering Act (AMLA).

Senate blue ribbon chairman Teofisto Guingona III said the perception that Filipino banks have been accommodating deposits from illegal transactions “affect investors’ perception on whether or not we have a safe banking system.

“A weak anti-money laundering legal framework discourages legitimate banking activities and invites instead criminals who seek to make the Philippines a safe haven for their unlawfully acquired money,” he added.

The IMF, in its December 14, 2012 report, said money laundering, terrorist financing and the related predicate crimes could undermine the stability of a country’s financial system.

Illegal money would most likely remain unaccounted for and affect the government data, the IMF said.

Due to its failure to update the AMLA, the Philippines is under pressure from the Finance Action Task Force (FATF), a global agency that monitors money laundering and terrorist-financing activities.

The FATF wants the country to amend the AMLA so that transactions including the purchase of big-ticket jewelry, real estate and other purchases that can be used to disguise illegally acquired currency would be included in the list of monitored activities.

The second set of AMLA amendments proposes to expand the list of “unlawful activities” including terrorism, conspiracy to commit terrorism, bribery, frauds and illegal exaction.

It also extends the definition of money laundering as a crime where it outlaws the proceeds of illegal activities that are transacted, converted, transferred, disposed of, moved, acquired, possessed, used, concealed or disguised.

Failure by Congress to approve the second set of AMLA amendments by the first quarter of the year would find the Philippines joining the FATF’s blacklist and make it more difficult to engage in international monetary transactions such as remittances from overseas Filipino workers.

Guingona said the Senate would discuss the AMLA amendments during the resumption of Congress session on Jan. 21.