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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

FOREIGN DEBT SHRINKS TO $77.5
[Due to continued stronger dollar, higher investments in Philippine debt papers]


MARCH 22 -BSP Governor Amando Tetangco Jr. said external debt amounted to $77.47 billion last year, $200 million lower compared with $77.67 billion in 2014. Philstar.com/File Photo The country’s outstanding external debt slipped for the third straight year in 2015 due to the continued strengthening of the dollar as well as higher investments in Philippine debt papers, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. BSP Governor Amando Tetangco Jr. said external debt amounted to $77.47 billion last year, $200 million lower compared with $77.67 billion in 2014. This was the third straight year the country’s external debt declined from $79.95 billion in 2012 to $78.49 billion in 2013 and to $77.67 billion in 2014. Tetangco traced the improvement in the country’s external debt level to the $1.8 billion increase in investments largely by banks in Philippine debt papers. The BSP chief also cited the $456 million negative revaluation adjustments due to the strengthening of the greenback last year in view of the gradual recovery of the US economy and expectations of the interest rate liftoff by the US Federal Reserve. “A stronger dollar results in lower debt figure expressed in US dollar terms,” he said. However, the $2 billion net availments as debt drawdowns exceeded payments as well as previous periods’ audit adjustments negated the impact of higher investments and a stronger US dollar. External debt refers to all types of borrowings by Philippine residents from non-residents. More than 65 percent of the country’s external debt is denominated in US dollar, while 11.7 percent of total debt is denominated in Japanese yen. READ MORE...

ALSO: Cyber theft a blow to efforts to lure investors


MARCH 21 -THE PHILIPPINES’ failure to address loopholes in anti-money laundering safeguards could affect even foreign investments in the infrastructure space, a conduit for which is the Aquino administration’s flagship Public Private Partnership (PPP) program.
PPP Center executive director Andre Palacios said there was concern over how a recent $81-million cross-border money laundering scandal that hit the country could hurt effortsto lure foreign investors. The scheme involved the theft of funds from Bangladesh’s central bank, which passed through the Philippine financial system through Rizal Commercial Banking Corp. (RCBC) and was then laundered in local casinos. The worries come as the program pushes a pipeline of 37 deals worth P1.31 trillion to build or modernize crucial airports, trains and expressways, apart from power, water and social infrastructure projects. “There will be some negative implications on investor interest,” Palacios said. He clarified that the PPP Center was not directly involved in the matter and would not take an active lead in pushing for reforms in the law. One lawmaker already warned that a blacklisting by Paris-based Financial Action Task Force (FATF) places the country’s financial sector and credit ratings at risk. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said he was open to easing the bank secrecy law that was perceived to be hampering a probe launched by the Senate. READ MORE...RELATED, BSP to hold banks ‘accountable’...AND Cyber experts warn banks of more attacks posted...

ALSO: BSP sets own probe on money laundering


MARCH 21 -The Bangko Sentral ng Pilipinas (BSP) yesterday said it will conduct a separate independent investigation on all entities, institutions and personalities involved in the money laundering controversy. Deputy governor for supervision and examination sector Nestor Espenilla said they will just finish the result of the Senate committee on banks and financial intermediaries’ investigation before they start their own query. So far, four banks — Rizal Commercial Banking Corp., EastWest Bank, Philippine National Bank and Banco de Oro Unibank — are said to be involved in the money laundering activity. Espenilla said only those summoned by the Senate will be included in its investigation. A remittance center, Philrem, was mentioned as the channel for the funds after being withdrawn from banks. BSP regulates all banks as well as pawnshops, money changers and remittance centers No date has been set on the BSP’s own investigation lest the end of the Senate’s own probe. “It’s too soon to say anything about that. Senate inquiry and investigations are still ongoing,” Espenilla told the Daily Tribune in an exclusive interview last March 20, 2016. The Senate committee on banks and financial intermediaries has set the resumption of the investigation on March 29, 2016. READ MORE...RELATED, Deguito, Torres sacked...

ALSO: RCBC president goes on leave; Chairperson takes over operations


MARCH 24 -Lorenzo Tan, center, president of Rizal Commercial Banking Corp., testifies before Philippine Senate Blue Ribbon Committee probe PHILSTAR FILE
The president of Rizal Commercial Banking Corp. (RCBC) has gone on leave as the bank tries to come to terms with the involvement of some of its officials in an $81-million heist. The bank’s board of directors said it has granted the second offer of president Lorenzo Tan to go on leave to allow him to focus on clearing his name in the money laundering issue being investigated by a board committee. The committee is assisted by SGV auditors and external counsels. The eldest of the eight children of taipan Alfonso Yuchengco is set to take over the helm of RCBC.
In a statement, the bank said chairperson Helen Yuchengco- Dee would take over and a management committee led by vice chairman Cesar Virata and Armando Medina would assist her in running the bank. RCBC said Tan insisted on taking a leave. Dismissed Jupiter branch manager Maia Santos-Deguito dragged Tan into the scandal by implying he had knowledge of her opening spurious accounts for the laundered funds. The Bangladesh Bank owned the $81 million stolen by Chinese hackers from its Federal Reserve Bank of New York account. “So far, no evidence has been presented against Tan linking him to the issue and the board has taken cognizance of the statement of Deguito before the Senate that Tan had nothing to do with the opening of the accounts that received the $81-million remittance,” the bank said. Last March 12, the bank’s board turned down Tan’s offer to go on leave. Lawyer Francis Lim of ACCRA Law earlier said the bank’s owners and management have vouched for the integrity of Tan. “The bank’s board thanked him for his gentlemanly and decent gesture but said their trust in him is intact and unshaken,” Lim said. Tan has vehemently denied involvement in the alleged multimillion-dollar money laundering scheme that is now subject of an investigation by the Anti-Money Laundering Council (AMLC). READ MORE...RELATED, AMLC files raps vs Wong, Xu...

ALSO: By Francis Kong - The best poem in the world


MARCH 27 -By Francis Kong -“What must I do to get into heaven?” This is one of the most poignant questions anybody can ask. Do you realize that this question carries the same uselessness as someone saying that there is no heaven?  If people who only do good things can go to heaven, then none of us would be qualified. What is good in our eyes might be rubbish in the eyes of God. The explanation is extremely simple: Our standards are too low compared to God’s standards.  Let me give you an example.  Scriptures say, “If you break just one law or commandment of God then you have practically broken every one.”  So, have you ever lied? You just did the moment you say “No.”  I am aware that I am a sinner and it is impossible for me to follow God’s commands, but I know that God has provided the solution through His Son, Jesus. As I traveled the world and met people from different fields, I learnt that the name “Jesus” never leaves people neutral. In certain places, the name Jesus is used as a curse. It also evokes vile reactions and responses. It is revered in certain quarters. No other name on Earth can trigger such responses. READ MORE...


READ FULL MEDIA REPORTS HERE:

Foreign debt shrinks to $77.5 B
[Continued stronger dollar, higher investments in Philippine debt papers]


BSP Governor Amando Tetangco Jr. said external debt amounted to $77.47 billion last year, $200 million lower compared with $77.67 billion in 2014. Philstar.com/File Photo

MANILA, MARCH 28, 2016 (PHILSTAR) B By Lawrence Agcaoili March 22, 2016 - The country’s outstanding external debt slipped for the third straight year in 2015 due to the continued strengthening of the dollar as well as higher investments in Philippine debt papers, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

BSP Governor Amando Tetangco Jr. said external debt amounted to $77.47 billion last year, $200 million lower compared with $77.67 billion in 2014.

This was the third straight year the country’s external debt declined from $79.95 billion in 2012 to $78.49 billion in 2013 and to $77.67 billion in 2014.

Tetangco traced the improvement in the country’s external debt level to the $1.8 billion increase in investments largely by banks in Philippine debt papers.

The BSP chief also cited the $456 million negative revaluation adjustments due to the strengthening of the greenback last year in view of the gradual recovery of the US economy and expectations of the interest rate liftoff by the US Federal Reserve.

“A stronger dollar results in lower debt figure expressed in US dollar terms,” he said.

However, the $2 billion net availments as debt drawdowns exceeded payments as well as previous periods’ audit adjustments negated the impact of higher investments and a stronger US dollar.

External debt refers to all types of borrowings by Philippine residents from non-residents. More than 65 percent of the country’s external debt is denominated in US dollar, while 11.7 percent of total debt is denominated in Japanese yen.

READ MORE...

About 11.8 percent of the external debt is US dollar-denominated multi-currency loans from the World Bank (WB) and Asian Development Bank (ADB) while 11 percent are denominated in 17 other currencies including the peso with 6.6 percent, the special drawing rights of the International Monetary Fund (IMF) with 2.2 percent, and the euro with 1.5 percent.

The country’s external debt at end-2015 was 2.5 percent higher compared to the end-September level of $75.6 billion. The increase was attributed to net availments amounting to $1.8 billion by private banks and corporations to finance various projects arising from positive sentiment.

Data from the central bank showed the country’s gross international reserves (GIR) amounted to $80.7 billion last year, enough to cover 5.3 times the country’s short-term debt under the original maturity concept.

“Key external debt indicators remained at comfortable levels at the close of the year,” Tetangco said.

The debt service ratio continued to improve to 5.3 percent in end December from 5.6 percent in September and from 6.3 percent in December 2014 due to a larger decline in payments.

About 80.5 percent of the country’s outstanding external debt consisted of medium- and long-term accounts set to mature in over a year. The weighted average maturity of these accounts stood at 16.5 years.

“This means that foreign exchange requirements for debt payments are well spread out and, thus, more manageable,” he added.

On the other hand, short-term external debt comprised 19.5 percent of the country’s total external borrowings. 


INQUIRER

Cyber theft a blow to efforts to lure investors @inquirerdotnet Philippine Daily Inquirer
03:35 AM March 21st, 2016



THE PHILIPPINES’ failure to address loopholes in anti-money laundering safeguards could affect even foreign investments in the infrastructure space, a conduit for which is the Aquino administration’s flagship Public Private Partnership (PPP) program.

PPP Center executive director Andre Palacios said there was concern over how a recent $81-million cross-border money laundering scandal that hit the country could hurt effortsto lure foreign investors.

The scheme involved the theft of funds from Bangladesh’s central bank, which passed through the Philippine financial system through Rizal Commercial Banking Corp. (RCBC) and was then laundered in local casinos.

The worries come as the program pushes a pipeline of 37 deals worth P1.31 trillion to build or modernize crucial airports, trains and expressways, apart from power, water and social infrastructure projects.

“There will be some negative implications on investor interest,” Palacios said.

He clarified that the PPP Center was not directly involved in the matter and would not take an active lead in pushing for reforms in the law.

One lawmaker already warned that a blacklisting by Paris-based Financial Action Task Force (FATF) places the country’s financial sector and credit ratings at risk. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said he was open to easing the bank secrecy law that was perceived to be hampering a probe launched by the Senate.

READ MORE...

The cyber theft prompted the resignation of the central bank governor of Bangladesh and has placed the spotlight on the Philippines as a weak spot in the global battle to curb money laundering activities. Casinos in the Philippines are not covered by the Anti-Money Laundering Law.

Palacios said the PPP Center would do its part in explaining and allaying investor fears should the issue be raised in investment briefings and roadshows.

For his part, Astro del Castillo, First Grade Finance Inc. managing director, downplayed risks that the country would be demoted to the “gray” list of the FATF as both the government and private sector were cooperating to “plug the leaks.”

But he noted that risks remained as a probe was still ongoing and the “real picture” has yet to emerge.

Luring foreign investors with deep pockets and technological expertise is a key part of sustaining the country’s PPP program, whose projects continue to grow larger in scale and complexity.

Local conglomerates in the PPP space have already tapped global railway and airportcompanies in previous and ongoing bids.

In 2014, the world’s biggest airport operators joined the auction for the Mactan Cebu International Airport contract, which was eventually bagged by Megawide Construction Corp. and India’s GMR Infrastructure.

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RELATED FROM THE MANILA STANDARD

BSP to hold banks ‘accountable’ posted March 21, 2016 at 11:55 pm by Bloomberg
By Clarissa Batino and Andreo Calonzo

The Philippines will hold accountable any bank or banker found responsible or remiss in their duties in the $81-million cyber heist of Bangladeshi foreign reserves that wound up in the Southeast Asian nation’s financial system, officials said.

“You can be assured that banks that fail to perform their responsibilities will be held accountable,” Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla, who heads the central bank’s supervision and examination division, said in reply to a text message.

Philippine lawmakers last week started an investigation into how the stolen funds ended up in Rizal Commercial Banking Corp., wired to remittance company Philrem Service Corp., and transferred to casinos.

Senator Teofisto Guingona, who’s leading the inquiry, said the theft could threaten the wider financial sector in the Philippines and put the country’s credit rating at risk.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said March 18 he sees “risk associated” with the incident and the nation has “to show that action has been taken.”

Bank officials found to be involved in the money-laundering case will be held accountable, Communications Undersecretary Manolo Quezon also said on Saturday in a briefing on government radio.

The Philippines banking regulatory framework is already strong and the remedy isn’t necessarily more regulations, Espenilla said. Strict deposit secrecy law, inadequate protection of bank examiners and delays in the judiciary are among the challenges banking regulators face in enforcing effective compliance, he said.


AQUINO

President Benigno Aquino III will wait for recommendations from Bangko Sentral ng Pilipinas on the easing of the bank secrecy law, Quezon said.

Senate hearings on the heist focused on testimony by Maia Santos Deguito, the manager of the RCBC branch from which the money was withdrawn, who agreed to a tell-all in a in closed-door session with lawmakers last week.

RCBC president Lorenzo Tan, who has denied Deguito’s claims, invoked the law on bank secrecy during the Senate hearing.

The case is an isolated one and has nothing to do with the bank’s strength and stability, RCBC said in a statement Friday.

“RCBC follows global best practices but even the most stringent rules and restrictions are only as good as the people who must follow them,” it said.

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RELATED

Cyber experts warn banks of more attacks posted March 19, 2016 at 11:15 pm by Roderick T. dela Cruz Global cyber security experts visited Manila last week, amid a high-profile Senate probe into an $81-million theft of Bangladesh central bank’s money that reportedly ended up in a Philippine bank and three casinos, only to be withdrawn by unknown individuals later.

“It was the first time it happened, to the best of my knowledge,” David Holmes, senior manager for global security of F5 Networks Inc., says in an interview at Makati Shangri-La Hotel, referring to the attack on the Society for Worldwide Interbank Financial Telecommunication or Swift network, which handles messaging among international banks.


F5 Networks Inc. senior manager for global security David Holmes (left) and country manager Oscar Visaya

“To the extent of my knowledge, there has not been a Swift compromise before. That’s not necessarily my expertise, but from the people I talked to, they said it is the first one and it is very significant. Now people know that it could be done, and you could pull off a heist of $100 million, every hacker in the world who deals with banks may be focused on that right now,” says Holmes, who is based in Colorado.

Holmes, who was born in Quezon City but grew up in the US, says the risk was much higher last week, than it was a year ago. “But the protection will be better a year from now because of this,” he says.

Holmes, who has a 25-year experience in security and product engineering, says many Philippine banks are already customers of F5 Networks, a US company which specializes in application delivery networking technology.

“We have a lot of banking customers here in the Philippines. It is a problem everywhere. When the amount is $100 million, I expect some finger pointing in the months to come,” he says, referring to the Bangladesh’s heist, allegedly perpetuated by a group that used Philippine banks and casinos as conduits.

Holmes says as the banking technology becomes more digital, the sector will be more exposed to threats, and there will be a greater demand for cyber security experts. He says based on a study by research firm IDC, some 20 million jobs in cyber security will be unfilled globally by 2020.

Cybercrime is estimated to cost the global economy some $455 billion annually, according to F5 Networks. In 2014 alone, around 42.8 million security incidents were detected by businesses, up 48 percent from 2013.


Fortinet Inc. global security strategist Derek Manky

Kapersky Lab, an international software security group, says in a separate report that in the third quarter of 2015, the Philippines ranked as the 33rd most malware infected country in the world. These attacks included mobile threats and money stolen from online bank accounts.

Meanwhile, Derek Manky, a global security strategist of Vancouver-based Fortinet Inc., says the state of cyber security now lags behind cybercrime in countries such as the Philippines. He says cybercrime is now valued anywhere between $500 billion and $1 trillion. Fortinet is a $1.2-billion cyber security organization, with 4,100 employees, with a goal to become the world’s leading cyber security solutions provider by 2020.

“Cybercrime has no borders. When we look at the global cybercrime trend, it is incredibly busy. We are seeing almost 500,000 hacking attempts in just one minute. In terms of malware, we are seeing 100,000 attempts to plant malicious software,” Manky says in an interview at a restaurant in Makati City.

Manky, who formulates security strategy, has more than a decade of advanced threat research. His ultimate goal is to make a positive impact towards the global war on cybercrime. He is in the board of the Cyber Threat Alliance where he works to shape the future of actionable threat intelligence.

“When it comes to threat of cybercrime, there is no single silver bullet. Activities are happening at all levels. Cyber criminals are coming from all these verticals,” he says.

“These attacks are spreading from anything around home automation, healthcare, medical, smartphones, infrastructure. Everything that is being connected to the Internet, in things that are becoming a part of our daily lives, we are seeing attacks on these networks,” says Manky.

Money, he says, is the top motivation of cybercriminals. “What is driving all these numbers? Now, there is a lot of middlemen. There are affiliates that get paid to infect systems by criminal organizations,” he says.

He says malware, or malicious code implanted in computer systems, increased 10 times in just two years from May 2013 to July 2015. “Mobile malware is very active in the Philippines...We are seeing worms that are affecting things like smart television, like routers. These worms are sitting on the routers and changing DNS settings, so they can possibly filter and steal credentials for online banking,” he says.

“We are in a big problem for 2016 and beyond when we will see a massive outbreak of big infection, surpassing the largest botnets [zombie army] in PC. I am talking 40 million to 50 million devices more,” says Manky.

Manky, however, says going after the people behind cybercrimes such as the Bangladesh’s heist will take months, if not years. “I have heard three or four theories over the last day. They are jumping to conclusions. It took four years to investigate TJ Maxx, to get evidence. It takes time to understand these things,” he says, referring to the hacking of TJ Maxx credit cards.

Philippine banks are now under pressure to increase their protection, after a branch of Rizal Commercial Banking Corp. was reportedly used by hackers to transfer $81 million from an account of Bangladesh central bank at the New York Federal Reserve.

Hackers reportedly used a malware, similar to the one carried out by the Carbanak gang, to commit the illegal transfer to a Philippine bank. Carbanak gang reportedly stole $1 billion from financial institutions from 2013 to 2015.

In the Bangladesh’s heist, the money transferred to RCBC was converted into Philippine pesos by remittance company Philrem Service Corp., through RCBC Treasury Remittance. It was then transferred to three casinos before it was delivered to unknown individuals.

“These sort of things have been happening for a long time now. Transferring money to offshore account is one thing. But [banks] need to secure from the inside out. Traditionally, security has been focused on the outside, keeping hackers out of the systems. What about the insider threat? If you have proper protection, you can quarantine threats...so that the attacker cannot even communicate,” Manky says.

Manky says the alleged theft of nearly $100 million from Bangladesh’s central bank to banks in the Philippines would have not have happened without a middleman or an inside person.

“I would not be quick to conclude that these are hackers. It could be an inside job,” he says. “People were quick to attribute that to Russia or China. We don’t know. The case of malicious code planted in cyber network, that could be used to transfer money out. That is case No. 1. The other case is insider job.”

Jeff Castillo, country manager of Fortinet Philippines, says technology alone is not enough to execute a multi-million-dollar theft. “It always involved a person...a middleman,” he says.

Fortinet, in its latest cyber threat assessment program, says no country is immune to security risks and attacks and computer networks around the world are now at risk with sophisticated markets being no exception.

The company says that in the first quarter of 2015, malware attacks in the Philippines mostly leveraged the use of JS (Java Script) and PHP (Hypertext Preprocessor) based malware.

“The key contributors to this growth are the WM and Android malware, both of which have since exploded by as much as 4 digit percentage points. The current top malware is WM/TrojanDownloader.9BB7!tr and serves as a downloader for malicious executables using enabled Word macros,” Fortinet says.

The study says among mobile malware, Triada is currently the top mobile malware in the Philippines. Triada is a sophisticated and modular Android malware that seeks to redirect the money used in in-app purchases to the threat actors.

Kaspersky Lab says Triada, a new Trojan targeting Android devices, is stealthy, modular, persistent and written by very professional cybercriminals.

The stealth capabilities of this malware are very advanced. After getting into the user’s device, Triada implements in nearly every working process and continues to exist in the short-term memory. This makes it almost impossible to detect and delete using antimalware solutions, according to Kaspersky Lab.

The Philippines is among the countries attacked by the Triada malware. The percentage of users attacked in the country is not as many as the incidents recorded in Russia, India and China. However, Kaspersky Lab says makers of Triada are still actively lurking and waiting for more prey.

“Kaspersky Lab has recorded a few incidents of Triada infection in the country last year. This clearly shows Filipino Android users are not safe. With nine out of 10 Filipino mobile users using Android-powered devices, the Philippines is definitely at risk of more Android malware infections,” says Anthony Chua, territory channel manager for the Philippines and Singapore at Kaspersky Lab Southeast Asia.

“The Triada malware is a stealthy and continuously evolving malware with the sole target of infecting more and more Android devices. Because it is modular, it can expand and upgrade and we cannot tell exactly who their next targets would be,” Chua says.

Kaspersky Lab says Triada is yet another sign that malware developers are taking Android seriously, and the latest samples are almost as complex and hard to withstand, as their Windows-based kin. The only good way to fight all these threats is to be proactive, and so a good security solution is a must, it says.

John Maddison, senior vice president of products and solutions at Fortinet, says in a statement that businesses, being constantly under cyber attack, should be more prepared.

“With the attack surface dramatically increased and a mature attackers ecosystem, companies have to be ever more vigilant across all their IT assets,” says Maddison.


TRIBUNE

BSP sets own probe on money laundering Written by Ed Velasco Tuesday, 22 March 2016 00:00

The Bangko Sentral ng Pilipinas (BSP) yesterday said it will conduct a separate independent investigation on all entities, institutions and personalities involved in the money laundering controversy.

Deputy governor for supervision and examination sector Nestor Espenilla said they will just finish the result of the Senate committee on banks and financial intermediaries’ investigation before they start their own query.

So far, four banks — Rizal Commercial Banking Corp., EastWest Bank, Philippine National Bank and Banco de Oro Unibank — are said to be involved in the money laundering activity. Espenilla said only those summoned by the Senate will be included in its investigation.

A remittance center, Philrem, was mentioned as the channel for the funds after being withdrawn from banks. BSP regulates all banks as well as pawnshops, money changers and remittance centers

No date has been set on the BSP’s own investigation lest the end of the Senate’s own probe.

“It’s too soon to say anything about that. Senate inquiry and investigations are still ongoing,” Espenilla told the Daily Tribune in an exclusive interview last March 20, 2016.

The Senate committee on banks and financial intermediaries has set the resumption of the investigation on March 29, 2016.

READ MORE...

Espenilla didn’t mention what punishments the entities can suffer at the hands of the BSP. Under the general banking law, the BSP can place any bank official on its blacklist if proven to be involved in severe offenses, money laundering included.

“Besides, I cannot talk about any specific institution beyond what’s discussed in the Senate hearing,” he said.

Meanwhile, EastWest Bank clarified it already followed the order of the Anti-Money Laundering Council (AMLC) to freeze the accounts of five persons involved in the money laundering controversy on the day that it was given last March 5, 2016.

“We already complied,” a top official of EastWest Bank told the Tribune.

At the Senate, committee chairman Sen. Sergio Osmeña III said it will be the turn of the three other banks mentioned in the controversy to be questioned on the continuation of the investigation on March 29, 2016.

Osmeña said all the representatives of BdO, EastWest and PNB were present in the two hearings but were not asked due to the attention focused on Maia Santos-Deguito, the RCBC branch manager believed to be at the center of the controversy.

“They have all been in attendance but we have not yet gotten around to questioning them,” the senator said.

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RELATED FROM THE MANILA TIMES

Deguito, Torres sacked March 22, 2016 11:11 pm by KRISTYN NIKA M. LAZO AND JEFFERSON ANTIPORDA, REPORTERS


Image from Bloomberg Philippines TV.

Rizal Commercial Banking Corp. (RCBC) has fired MaiaSantos-Deguito, the manager of the bank’s Jupiter Branch, and her assistant, Angela Torres, for falsification of commercial documents and breach of policies.

In a statement late Tuesday, RCBC said the two officials violated policies and procedures and falsified commercial documents to facilitate the laundering of $81 million in stolen money.

“Other branch and bank officials are expected to be meted out various sanctions ranging from termination to suspension in the coming days when the internal investigation is expected to be completed,” the Yuhengco-owned bank said.

It added that appropriate charges will be filed in court against Deguito and Torres next week.

Deguito appeared at the Senate inquiry into the money scam last week but she only disclosed what she knew of the bank transaction behind closed doors.

Senators said the manager of the Jupiter Branch in Makati City (Metro Manila) can be made a state witness so that she can testify against other bank officials involved in the scam.

Senator Sergio Osmena 3rd said they offered to place Deguito under the Witness Protection Program (WPP) but she turned it down.

Senator Aquilino Pimentel 3rd said the bank manager “is a potential state witness against some people who are more guilty.”

But Sen. Joseph Victor Ejercito said Deguito should show that she is the least guilty.

“In fact, aside from her former senior customer relations officer [Torres], all other witnesses are contradicting her claim of innocence in this story,” Ejercito pointed out.

Osmena earlier said Deguito’s testimony is closer to the truth because it can be verified.

Deguito has claimed that businessman William So Go demanded 10 percent of the $81 million that was stolen by hackers from the Bangladesh Bank.

The money was transferred to four bank accounts opened at the RCBC Jupiter Branch.


PHILSTAR

RCBC president goes on leave; Chairperson takes over operations  By Lawrence Agcaoili (The Philippine Star) | Updated March 24, 2016 - 12:00am 19 834 googleplus0 1


Lorenzo Tan, center, president of Rizal Commercial Banking Corp., testifies before Philippine Senate Blue Ribbon Committee probe PHILSTAR FILE

MANILA, Philippines – The president of Rizal Commercial Banking Corp. (RCBC) has gone on leave as the bank tries to come to terms with the involvement of some of its officials in an $81-million heist.

The bank’s board of directors said it has granted the second offer of president Lorenzo Tan to go on leave to allow him to focus on clearing his name in the money laundering issue being investigated by a board committee. The committee is assisted by SGV auditors and external counsels.

The eldest of the eight children of taipan Alfonso Yuchengco is set to take over the helm of RCBC.

In a statement, the bank said chairperson Helen Yuchengco- Dee would take over and a management committee led by vice chairman Cesar Virata and Armando Medina would assist her in running the bank. RCBC said Tan insisted on taking a leave.

Dismissed Jupiter branch manager Maia Santos-Deguito dragged Tan into the scandal by implying he had knowledge of her opening spurious accounts for the laundered funds.

The Bangladesh Bank owned the $81 million stolen by Chinese hackers from its Federal Reserve Bank of New York account.

“So far, no evidence has been presented against Tan linking him to the issue and the board has taken cognizance of the statement of Deguito before the Senate that Tan had nothing to do with the opening of the accounts that received the $81-million remittance,” the bank said.

Last March 12, the bank’s board turned down Tan’s offer to go on leave.

Lawyer Francis Lim of ACCRA Law earlier said the bank’s owners and management have vouched for the integrity of Tan.

“The bank’s board thanked him for his gentlemanly and decent gesture but said their trust in him is intact and unshaken,” Lim said.

Tan has vehemently denied involvement in the alleged multimillion-dollar money laundering scheme that is now subject of an investigation by the Anti-Money Laundering Council (AMLC).

READ MORE...

“I condemn as malicious and actionable insinuations that the top management of the bank knew of and tolerated alleged money laundering activities in one branch. I will fully cooperate with all ongoing inquiries and believe that I and consequently the bank’s management will be fully vindicated,” Tan said.

Macel Fernandez-Estavillo, legal and regulatory affairs head at RCBC, announced on Wednesday the bank has terminated Deguito and senior customer representative officer Angela Torres for violating bank policies and procedures and for falsification of commercial documents.

Estavillo maintained more heads are expected to roll as the RCBC is looking at all angles in the money laundering scandal.

“Other branch and bank officials are expected to be meted out various sanctions ranging from termination to suspension in the coming days when the internal investigation is expected to be completed,” she added.

She said appropriate charges would be filed by RCBC against Deguito and Torres by next week.

Apology

RCBC yesterday also issued an apology to the bank’s shareholders, clients and the general banking public for the culpability of its personnel in the money laundering issue.

“RCBC offers its sincerest apologies for the involvement of its personnel in the money laundering scheme now subject of Senate Blue Ribbon and AMLC investigations,” the bank said in a full-page advertisement.

The bank said it is also conducting its own inquiry to identify and address “any weaknesses in its controls and operations which may have facilitated the scheme.”

“Needless to say, it will take appropriate action against any bank officer or staff found guilty of fault or negligence,” it pointed out.

“RCBC recognizes the evils wrought by money laundering and will do its utmost in the fight against it,” the bank said.

The AMLC has filed criminal complaints against Deguito and several others in connection with the issue.

A lawyer of one of those facing charges said his client is not in hiding and is in fact ready to face investigators to clear his name.

Victor Fernandez, counsel for Kim Wong, said the latter is ready to tell all before the Senate Blue Ribbon Committee on March 29.

Fernandez said his client returned to the country from Singapore last Sunday.

Fernandez questioned the timing of the filing before the Department of Justice of a money laundering complaint against his client by AMLC.

“The timing of the case filing is suspicious. It is our impression that some very powerful people are afraid of what our client will disclose, that’s why a premature case was filed against him by AMLC,” he said.

“They probably think that filing the case will deter our client from coming home and testifying before the Senate. They are wrong,” he said.

Wong’s counsel said he was surprised that a criminal complaint was filed against his client based solely on the statement of Dequito before the Senate committee.

“The investigation is still ongoing yet the AMLC used the transcript of stenographic notes as their only basis for the complaint. Why is the AMLC in such a hurry?” he added.

‘Inhospitable’ to launderers

The Bangko Sentral ng Pilipinas (BSP), meanwhile, vowed to make the Philippines “inhospitable” to launderers and other groups specializing in financial fraud.


TETANGCO

BSP Governor Amando Tetangco Jr. vowed to leave no stone unturned and hold all those involved accountable under the Anti-Money Laundering Act (AMLA).

“Investigations commenced earlier and still ongoing. Charges have not been filed in court and we are not ruling out additional charges,” he said.

Tetangco also chairs the AMLC, which has filed criminal cases against Deguito, Kam Sin Wong or Kim Wong, Xu Weikang and others before the DOJ.

The BSP chief lamented AMLA has made the work of AMLC difficult.

“AMLC is an investigative body. When an investigation is started, the unlawful activity has already been committed,” he added.

Tetangco pointed out there is a need to relax Republic Act1406 or the Bank Secrecy Law of 1995 “under certain conditions.”

“We need to make the Philippines inhospitable to money laundering as a jurisdiction,” he said.

BSP deputy governor Nestor Espenilla Jr. echoed Tetangco’s call, saying banks or bankers involved in the bank heist would be held accountable.

“You can be assured that banks that fail to perform their responsibilities will be held accountable,” Espenilla said in a text message to reporters.

Espenilla, who heads the BSP’s Supervision and Examination Sector (SES), said the bank regulator would review all relevant regulations to minimize or eliminate risks that make possible the laundering of dirty money in the country.

Julia Bacay-Abad, executive director of AMLC, for her part, expressed belief the Philippines is not a safe haven for money laundering.

“I would like to believe that we are not a haven for money laundering. Money laundering could happen anywhere,” she added.

Since AMLA’s enactment in 2001, Abad said AMLC has filed 365 anti-money laundering cases before the DOJ, the Office of the Ombudsman, Sandiganbayan and regular courts. Of the cases filed, 250 were resolved while 115 are still pending.

The agency has forfeited P4.83 billion, including P1.5 billion that was returned to victims or investors.

------------------------------------------

RELATED FROM THE MANILA TIMES

AMLC files raps vs Wong, Xu March 22, 2016 11:17 pm by JOEL M. SY EGCO, SENIOR REPORTER AND KRISTYN NIKA M. LAZO, REPORTER


Julia Abad, executive director of the AMLC

THE Anti-Money Laundering Council (AMLC) on Tuesday slapped money-laundering charges against two businessmen linked to the controversial transfer of the $81 million stolen from the Bangladesh Bank to the Rizal Commercial Banking Corporation (RCBC).

In a nine-page complaint filed at the Department of Justice, the AMLC accused Kam Sin Wong, a.k.a. Kim Wong, and Weikang Xu of laundering “hacked” or stolen funds from New York that ended up in local casinos.

Wong has been tagged as the mastermind of the money-laundering scheme. He flew out of the country when the controversy broke out.

On the other hand, Xu is said to be a junket operator who allegedly owned the bank accounts where the funds ended up.

The two businessmen have been tagged as the main players who facilitated the illegal transfer of the funds in connivance with their local bank contacts.

The AMLC complaint stemmed from testimonies of witnesses who appeared before the Senate blue ribbon committee that also investigated the scam.

Xu was said to have received $30.5 million from withdrawals he made between February 5 and 13 this year.


KIM WONG, one of six individuals investigated by AMLC. INQUIRER PHOTO

Wong, president and general manager of Eastern Hawaii Leisure Co. Ltd., was also accused of amassing P1 billion ($21.6 million) through several withdrawals he made from his personal and corporate accounts on February 10 and 11 this year.

During the hearings, it was claimed that Wong introduced RCBC branch manager Maia Santos-Deguito to individuals who opened bogus bank accounts where the stolen money was wired.

The AMLC earlier filed money-laundering charges against Deguito at the Justice department.

Deguito was summoned to answer charges during preliminary investigation set on April 12 and 19.

Sen. Sergio Osmena 3rd claimed that Wong appears to have masterminded the operation and that Deguito may not be the “most guilty” and thus, could be considered a credible witness to indict the other suspects.

Osmeña said Deguito told senators that Wong asked her to open the bank accounts where the $81 million was wired, with the instruction to use the services of foreign exchange remittance company Philrem Services Inc.

Wong reportedly gave Deguito the information sheets and the P$2,500 to open five dollar accounts.

Only four of the accounts, however, were used when the stolen money was wired to the Philippines.

The fifth account, under the name Picache, was not used, according to Deguito.

The addresses given by the four account owners turned out to be fictitious.

Normal transaction

The AMLC admitted that it was clueless about the transfer of the $81 million.

Julia Abad, executive director of the AMLC, said the country learned of the money laundering only when the governor of the Bangladesh Bank called Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. on February 11.

“There’s no way we would have known [without the Bangladesh Bank notice],” she told reporters.

Abad said that when the $81 million was deposited in the RCBC Jupiter Branch, the transaction was automatically recorded in the AMLC’s database.

It was not looked into, however, because the amount is considered “normal” given the “other bigger transactions reported to the AMLC” everyday.

The AMLC started its initial investigation and called the RCBC Jupiter Branch to gather details after the agency was alerted by Bangladesh.

But RCBC submitted a transaction report only on February 12.

“We conducted initial investigation, and they submitted a suspicious transaction report.

The suspicious transaction report will trigger the investigation. Without them, we wouldn’t be able to discover,” Abad said.

When asked why the AMLC took long in filing the petition to freeze the concerned accounts — only doing so on February 29 — the AMLC executive director said the AMLC did fast data gathering, verifications and investigation but the number of weekends and holidays hampered the process.

She noted that thousands of bank transactions enter their database each day but the agency only has 28 personnel looking at these transactions and only nine of them are financial analysts.

Abad said the agency will ask Congress to amend the Anti-Money Laundering Act so that casinos and real-estate brokers can be covered by the law.

She pointed to the need to strengthen supervisory powers of the BSP and to lift the bank secrecy law.

Abad said the Philippines is one of two countries that do not cover casinos in their anti-money laundering laws.

“The Philippines is [also] only 1 of 3 countries in the entire world where tax authorities cannot access bank transactions [Switzerland and Lebanon being the other two], and remain only one of two countries in the world where tax evasion is not a predicate crime to money laundering,” Finance Secretary Cesar Purisima said.


PHILSTAR

The best poem in the world BUSINESS MATTERS (Beyond The Bottom Line) By Francis J. Kong (The Philippine Star) | Updated March 27, 2016 - 12:00am 1 13 googleplus1 1

“What must I do to get into heaven?” This is one of the most poignant questions anybody can ask.

Do you realize that this question carries the same uselessness as someone saying that there is no heaven?

If people who only do good things can go to heaven, then none of us would be qualified. What is good in our eyes might be rubbish in the eyes of God. The explanation is extremely simple: Our standards are too low compared to God’s standards.


By Francis Kong

Let me give you an example.

Scriptures say, “If you break just one law or commandment of God then you have practically broken every one.”

So, have you ever lied? You just did the moment you say “No.”

I am aware that I am a sinner and it is impossible for me to follow God’s commands, but I know that God has provided the solution through His Son, Jesus.

As I traveled the world and met people from different fields, I learnt that the name “Jesus” never leaves people neutral. In certain places, the name Jesus is used as a curse. It also evokes vile reactions and responses. It is revered in certain quarters. No other name on Earth can trigger such responses.

READ MORE...

We cannot enter heaven by what we do, we enter heaven by appropriating for us what has been done on the Cross. And when we do, we would realize the most important thing: It is only by Grace through faith and never through our works.

Maybe this is the reason why this poem sent to me by my friend Blessie Ramirez made me think and smile. Let me share this with you:

Best poem in the world

I was shocked, confused, bewildered As I entered Heaven’s door, Not by the beauty of it all, Nor the lights, or its decor.

But it was the folks in Heaven Who made me sputter and gasp-- The thieves, the liars, the sinners, The alcoholics, and the trash.

There stood the kid from seventh grade Who swiped my lunch money twice. Next to him was my old neighbor Who never said anything nice.

Bob, who I always thought Was rotting away in hell, Was sitting pretty on cloud nine, Looking incredibly well.

I nudged Jesus, ‘What’s the deal? I would love to hear Your take. How’d all these sinners get up here? God must’ve made a mistake.

‘And why is everyone so quiet, So somber – give me a clue.’ ‘Hush, child,’ He said, ‘they’re all in shock. No one thought they’d be seeing you.’

JUDGE NOT!!

Remember...Just going to church doesn’t make you a Christian any more than standing in your garage makes you a car.

Every saint has a PAST... Every sinner has a FUTURE

Life without God is like an unsharpened pencil.

It has no point.

If doing good would merit heaven, then all of us deserve hell, and indeed we do, but Jesus died for us and we will have eternal life in His Presence.

Today signifies this truth. He is risen!

Am I a sinner?

You bet I am. I’m not perfect, but I am forgiven, and that is the best assurance one can ever ask for.

(Attend and experience two inspiring days with Francis Kong learning leadership and life skills in his widely acclaimed Level Up Leadership on May 25-26 at the brand new Shangri-La Hotel at the Fort. For further inquiries contact Rara at +639209530498 or Success Options at 7270291 / 7275692 or register online at www.levelupleadership.ph)


Chief News Editor: Sol Jose Vanzi

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