Senators told: Protect PH growth, strengthen AMLA now

MANILA, Philippines – The Senate must approve proposed amendments to the Anti-Money Laundering Act (AMLA) to prevent volatility in the country’s financial system due to illegal transactions, Sen. Teofisto Guingona said.

Guingona said in a statement that investor confidence in the Philippines’ strong macroeconomic fundamentals could place the country at greater risk of becoming a depository of illegal transactions such as terrorist financing.

Guingona, chairman of the sub-committee on anti-money laundering amendments of the committee on banks, currencies and financial institutions, cited a recent report of the International Monetary Fund (IMF) which warned such transactions could undermine the stability of the financial system.

“How we deal with money coming from possibly 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,” Guingona said.

Senate Bill 3123 calls for the expansion of institutions covered by the AMLA to include:

• casinos
• real estate agents
• dealers in precious metals/stones
• foreign exchange corporations
• money changers
• pre-need companies

It also proposes to expand the list of predicate crimes or unlawful activities, including:

• terrorism
• conspiracy to commit terrorism
• bribery
• fraud
• illegal exactions

The IMF, in its December 14, 2012 report, indicated that money laundering, terrorist financing and related predicate crimes threaten Philippine growth.

It added that “corruption, especially grand corruption at the national level in the revenue administration, has a demonstrated negative effect on fiscal balances, foreign direct investment.”

Guingona explained that SB 3123 would prevent inflows of “hot money” in the country’s various financial institutions from destroying the economic progress that the administration of President Benigno Aquino III has achieved.

“SBN 3123 serves to reinforce our country’s Anti-Money Laundering legislative measures. It ultimately addresses the noted deficiencies in the Philippines’ legal framework with regard to anti-money laundering, by making our state fully compliant with international standards,” he said.

“There is a need to monitor possible money laundering activities in other institutions. More and more, ‘dirty money’ are being laundered by betting in casinos, buying jewelries and later on reselling them, and converting unlawfully acquired funds into real estate properties,” he added.

The bill is expected to be tackled in the plenary once the Senate resumes session on January 21. – Rappler.com