Amid the heightened efforts by Malacañan Palace to flush out official corruption, a group of lawmakers has re-filed a bill seeking to promote greater transparency in public governance by empowering the Bangko Sentral ng Pilipinas (BSP) to examine the bank deposits of certain individuals or corporations once there is reasonable ground to believe these persons or firms are involved in serious irregularities or unlawful activities.
These legislators led by Camarines Sur (CamSur) Reps. Migz Villafuerte and Luigi Villafuerte said the Congress can boost the Marcos administration’s anti-corruption drive by amending Republic Act (RA) No. 1405, or the “Secrecy of Bank Deposits Law,” by exempting the BSP from this law’s prohibition on the examination of the bank accounts of persons or companies without the depositors’ consent.
Migz and Luigi said they introduced House Bill (HB) No. 1786 to exempt the BSP from this ban in the exercise of its supervisory powers, so it could examine the deposit or deposits of certain individuals or entities or corporations “if there is a reasonable ground to believe that there is an existing fraud, serious irregularity or unlawful activity.”
The other authors of HB 1786 are Reps. Tsuyoshi Anthony Horibata and Terry Ridon (Bicol Saro partylist).
The sharing of information on deposits with the SEC, AMLC, DOJ and the courts is premised in the bill on the necessity of examining such bank accounts to prevent or prosecute any offense or crime.
Migz, who chairs the House committee on information and communications technology (ICT), recalled that RA 1405 was enacted in 1955 “to protect the currencies of Filipinos by declaring their deposits as confidential and may not be examined, inquired, or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon the order of a competent court in cases of bribery or dereliction of duty of public officials.”
In 1981, former President Ferdinand Marcos Sr. signed Presidential Decree (PD) No. 1792 to amend RA 1405 by authorizing the Monetary Board (MB) of the then-Central Bank of the Philippines (now the BSP) to examine banks for bank frauds or serious irregularities.
However, in 1993, PD 1792 was repealed by RA 7653, otherwise known as “The New Central Bank Act,” which established the BSP.
Luigi, who is Deputy Majority Leader, said that “With the advancement of technology, financial transactions became easier, faster, efficient, and accessible through mobile banking, agent banking, and fintech platforms.”
“There are even banks that allow online deposits of their checks, which means that depositing money in bank accounts can now be accessible with just a few clicks of the mobile phones of depositors, making money flow in the economy faster as well,” he said.
However, said Luigi, “there are individuals or corporations that use RA 1405 to their advantage, being aware that even if they deposit bank checks fraudulently, they are protected by this law on bank secrecy, especially its specific provision barring banks from examining deposits without the consent of their depositors.”
Migz and Luigi said that easing the bank secrecy law aligns with President Marcos’ reiterated commitment to cleanse the bureaucracy.
During the awarding of the 2025 Metrobank Foundation Outstanding Filipinos in Malacañan Palace, the President said: “Patuloy tayo sa paglilinis ng hanay ng pamahalaan upang matiyak na ang bawat opisyal, bawat lingkod-bayan ay karapat-dapat sa tiwalang ibinibigay sa kanila ng taumbayan.”
“It shall also be unlawful for any person to use this Act for persecution or harassment or as an instrument to hamper competition in trade and commerce.”
Migz and Luigi said HB 1786 is a re-filed bill from the 19th Congress that was approved on third and final reading.
The Senate failed to pass, however, a counterpart measure.
HB 1786 upholds the provision of RA 1405 that all deposits are considered as of an absolutely confidential nature and may not be examined, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited is the subject matter of the litigation.
However, HB 1786 amends this provision by stating that the ban can be lifted upon the Monetary Board’s determination that “there is a reasonable ground to believe that fraud, serious irregularity or unlawful activity has been or is being committed by the abovementioned persons and that it is necessary to look into the deposit to establish such fraud, serious irregularity or unlawful activity.”
This bill provides, too, that this proposed new authority of the BSP to examine deposits “shall also apply in the course of its investigation of closed banks as used in this Act, deposits shall refer to money or its equivalent received by a bank in the useful course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time or thrift account …”
HB 1786 states that the results of the inquiry or bank examination shall be for the “exclusive use” of the BSP, and “shall not be made available to any person, entity, whether public or private, except to the Securities and Exchange Commission (SEC), Anti-Money Laundering Council (AMLC), Department of Justice (DOJ) and the courts.”
The sharing of information on deposits with the SEC, AMLC, DOJ and the courts is premised in the bill on the necessity of examining such bank accounts to prevent or prosecute any offense or crime.
This bill frees from any liability any bank or financial institution, or any of its directors, officers or employees for any act done in compliance with a BSP order for an inquiry or examination of bank deposits.
But it shall be unlawful for any official or employee of a bank or of the BSP to disclose any information concerning such deposits to any person.
“It shall also be unlawful for any person to use this Act for persecution or harassment or as an instrument to hamper competition in trade and commerce,” according to this bill.
Any violation of this Act will subject the offender upon conviction, to jail time of not less than 2 years to not more than 10 years, or a fine of not less than P50,000 to not more than P2 million.
Migz and Luigi pointed out that the BSP and a number of the country’s most prominent business groups fully support the easing of the bank secrecy law.
In a research blog posted recently, BSP officials said that in lieu of the proposal to demonetize P1,000 and P500 bills as a way to curb corruption, “financial transparency reforms offer far greater promise. Chief among them is reforming the bank secrecy law (RA 1405), still one of the strictest in the world.”
This blog post was authored by BSP Assistant Governor Maria Margarita Debuque-Gonzales, BSP Deputy Governor Mamerto Tangonan, and Eloisa Glindro, who is a director at the BSP’s Currency Policy and Integrity Department (CPID).
They said in their research blog that: “Easing bank secrecy—with appropriate safeguards—would empower investigators to trace illicit funds, match deposits to asset declarations, and build prosecutable cases.”
In a joint statement, meanwhile, various business organizations, including the Financial Executives of the Philippines (FINEx), Management Association of the Philippines (MAP) and the Makati Business Club (MB ), sought the easing of bank secrecy laws, which, they said, have “acted and continue to act as straitjackets on regulators, preventing them from being efficient in undertaking measures, such as investigating and prosecuting people involved in corruption and money laundering.”
“By empowering regulators and enforcement agencies with the authority to investigate corruption, tax evasion, and other illicit economic activities, the reforms will help ensure integrity across both public and private financial systems,” they said. “In doing so, they will also boost the country’s credibility and competitiveness within the global financial community.”
Presidential Communications Office (PCO) Undersecretary and Palace Press Officer Claire Castro said earlier that President Marcos is open to supporting a bill to compel public officials to waive their bank secrecy rights under the law.
“Ang Pangulo po ay sang-ayon po at dapat lang po natin ipatupad itong accountability at transparency sa gobyerno,” said Castro in a press briefing.
This proposal is one the 44 measures on the Common Legislative Agenda (CLA) that the President and the Legislative-Executive Development Advisory Council (LEDAC) endorsed for priority congressional action during the first LEDAC meeting of the 20th Congress that was held at the Palace last Sept. 30.
