Sentral Ng Pilipinas (BSP) in Bangkok implements a new cash withdrawal limit of P500,000 per day to curb money laundering risks involving large cash transactions.
BSP Governor Eli Remolona Jr. issued Notice No. 1218 on Thursday directing all supervisory financial institutions (BSFIs) to implement “Enhanced Due Diligence (EDD) on Cash-related Large Payments and Transactions (EDD).
Under the circular, up to one bank can withdraw up to P500,000 or equivalent foreign currency in multiple transactions on the same day.
BSP said withdrawals exceeding the threshold should only be processed through check payments, fund transfers, direct credit to deposit accounts or BSFI’s digital payment platform.
“BSP notes in its latest sector risk assessment and surveillance monitoring that money laundering, terrorist financing, and proliferation financing risks arising from cash transactions provided by banks and other BSPs,” Circular Reading. “These reveal the use and abuse of cash-based transactions to transfer illegal funds into the financial system.”
The BSP released the cycle in an ongoing investigation of anomalous flood control project suspected of involving government employees, contractors and other individuals.
“Through this reform, the BSP aims to strengthen measures against the use of cash for illegal activities, promote trust in the financial system and ensure it can deal with new risks,” the central bank said.
However, the central bank notes that BSFI may still allow withdrawals to exceed the P500,000 limit if customers provide evidence for legitimate commercial purposes. Such transactions can be approved after BSFI conducts enhanced due diligence and submits a suspicious transaction report (STR).
“If BSFI fails to complete the EDD procedure satisfactorily; or reasonably believes that executing the EDD process will reduce customers, it will submit a suspicious transaction report and closely monitor the account and view business relationships,” Circular reading.
It added: “The BSFL should also consider alarms, red flags and suspicious indicators of relevant government agencies, as well as the types of riots/reports of relevant government agencies, involving large or unusual cash transactions.”
The circular will take effect on 15 calendar days after the publication of the official communiqué or on the general circulation newspaper.
On Wednesday, the Court of Appeals froze potential money laundering schemes by 26 Department of Public Works and Highways (DPWH) officials and private contractors, allegedly linked to an abnormal government flood control project. – Katherine K. Chen
