BSP pushes to alter its charter

By Ronnel Domingo Philippine Daily Inquirer

Posted date: April 22, 2009

MANILA, Philippines -- The Bangko Sentral ng Pilipinas is pushing for changes in its charter to allow examiners to access deposit accounts and enable the monetary authority to gather evidence against bank fraud. Juan de Zuñiga Jr., BSP assistant governor and general counsel, said proposed amendments to the New Central Bank Act of 1993 were already pending in Congress. The changes—contained in Senate Bill No. 871 sponsored by Sen. Edgardo J. Angara, and House Bill No. 5858 filed by Rep. Jesus Crispin C. Remulla—will enhance the BSP’s administration of monetary, credit and banking system, as well as strengthen its supervisory powers. Zuñiga said the BSP would need greater authority in supervising and examining banks, and get around deposit secrecy, which has become a legal obstacle in gathering evidence against perpetrators of bank fraud. “Fraudulent transactions and unsafe and unsound banking practices, coursed through deposit accounts, have been shielded from the reach of BSP examiners,” Zuñiga said. “This limitation on BSP powers is one reason why we have problems such as (that related to) the Legacy group.” The lawyer was referring to a network of at least 12 rural banks against which the BSP has filed four complaints of syndicated estafa and two cases of falsification of public and commercial documents with the Department of Justice. Named respondents in the complaints were Legacy owner Celso G. delos Angeles Jr. and several officers and employees of the company. BSP data show that banks’ total deposits in the fourth quarter of 2008 amounted to P3.2 trillion, or 14.4 percent higher than the P2.8 trillion posted in the same period of 2007. Representing about half of the funding base, savings deposits declined year-on-year by 5.4 percent to about P1.4 trillion.