Manila, Feb. 28, 2003 -- Lifting the country's 48-yearold tradition of bank secrecy to conform to the demands of the Paris-based Financial Action Task Force (FATF) will scare away bank depositors and undermine the local banking system, Sen. Edgardo J. Angara said yesterday.

'In the final analysis, the amendments to the Anti-Money Laundering Act as proposed by our financial and monetary authorities are against the interests of our local financial institutions, against our economy, and against the Filipino people," he said.

Angara said that Filipinos should learn from the country's experience in 1999, when the government started to discuss the passage of AMLA and the possibility of relaxing the Secrecy of Bank Deposits Law.

"The discussion about relaxing bank secrecy began to scare away depositors. Inward remittances dwindled and our local banks suffered. Local deposits were siphoned abroad or transferred to foreign banks or to domestic banks with overseas branches," he said.

As a result, the peso steadily lost its value, and the exchange rate with the US dollar continued to depreciate. "This has resulted in damage and prejudice to the local banking industry and to the economy as a whole," he added.

Angara further said that Filipinos should first secure the strategic interest of the country and the economy before considering the demands of wealthy economis represented in FATF.

"The team of FATF ends next year. It will continue to exist only if the member countries agree to extend its term. But our banking system stays with us for as long as our country exists. We must protect our banking system and stop being pushed by the wealthy member-countries of FATF," he said.

Angara added that if countries like Switzerland, Ausria and Luxembourg continue to uphold their bank secrecy, there is no justifiable reason why the FATF should impose sanctions on the Philippines for trying to uphold and protect the integrity of its banking system.

"Switzerland itself is a major member of FATF. It continues to uphold its bank secrecy. Swiss bank accounts cannot just be opened without a court order. Why can't we do the same? There shouldn't be double standards," Angara said.

Reported by: Sol Jose Vanzi

All rights reserved