The Bangko Sentral ng Pilipinas (BSP) is implementing a new cash withdrawal limit of P500,000 per day in a move to curb money laundering risks involving large cash transactions.
BSP Governor Eli Remolona Jr. issued on Thursday Circular No. 1218 directing all supervised financial institutions (BSFI) to implement “enhanced due diligence (EDD) on large value cash-related payments and transactions.”
Under the circular, a maximum of P500,000 or its equivalent in foreign currency may be withdrawn at once or via multiple transactions within one banking day.
The BSP said withdrawals exceeding the threshold shall only be processed via check payment, fund transfer, direct credit to deposit accounts or BSFI’s digital payment platforms.
“The BSP in its latest sectoral risk assessment and surveillance monitoring has noted money laundering, terrorism financing, and proliferation financing risks arising from cash transactions of banks and other BSP-supervised financial institutions,” the circular read. “These disclosed the use and abuse of cash-based transactions to move illicit funds into and out of the financial system.”
The BSP issued the circular amid on-going investigation into allegedly anomalous flood control projects 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 that it can respond to new risks,” the central bank said.
However, the central bank noted that BSFIs may still allow withdrawals beyond the P500,000 limit if the client provides evidence of a legitimate business purpose. Such transactions may be approved after the BSFI conducts enhanced due diligence and files a suspicious transaction report (STR).
“If the BSFI fails to satisfactorily complete the EDD procedures; or reasonably believes that performing the EDD process will tip-off the customer, it shall file a suspicious transaction report and closely monitor the account and review the business relationship,” the circular read.
“The BSFl shall also consider the alerts, red flags. and suspicious indicators, as well as typologies rioted/reported by relevant government agencies, involving large or unusual cash transactions in filing STR,” it added.
The circular will take effect in 15 calendar days following the publication in the Official Gazette or in a newspaper of general circulation.
On Wednesday, the Court of Appeals froze assets pointing to a potential money laundering scheme of 26 Department of Public Works and Highways (DPWH) officials and private contractors allegedly linked to anomalous government flood control projects. — Katherine K. Chan