Japan has started making it more difficult for Filipino workers there to send money to their families back home after a global money laundering watchdog blacklisted the Philippines, Senate President Franklin Drilon said yesterday.
Drilon said a Philippine National Bank official had informed him that Japanese postal authorities had rejected a PNB application last month to set up a remittance system for the estimated 186,316 Filipinos living and working in Japan.
President Arroyo will meet key lawmakers on Thursday to convince them to pass a law sought by the Paris-based Financial Action Task Force (FATF), a global watchdog against money laundering, said Presidential Spokesman Ignacio Bunye.
Drilon said PNB senior vice president for Asia Isabelita Manalastas told him that the Japanese postal system had rejected the remittance system because the Philippines was still on the FATF blacklist.
"In other words, each and every (Filipino worker) transferring money using the Japanese post office’s automated teller machine is suspect of possible money laundering," Drilon quoted Manalastas as saying.
Only two Philippine banks — PNB and Metropolitan Bank and Trust Co. — are allowed by Japan to set up branches there to provide remittance services for Filipinos.
PNB has 27 percent of the Japanese remittance market while Metrobank has 15 percent. Express mail and door-to-door services have the rest.
PNB has the largest remittance network in the Philippines, handling over 50 percent of the $7 billion sent home by about seven million overseas Filipino workers.
Manalastas said even Philippine passports are no longer accepted as a valid identification by Japanese financial institutions for transactions involving $10,000 or more because they don’t contain the Japanese address of the remitting party.
"We have to spend time interviewing the remitter as to his source of funds, the purpose of his remittance, get a copy of his valid and accepted ID, get a written request mentioning clearly its purpose before we could even decide to accept the remittance or not," Manalastas told The STAR.
For those remitting amounts below $10,000, Manalastas said PNB Tokyo branch requires driver’s licenses, Social Security System or Government Service Insurance System IDs, and birth or residence certificates for identification.
Manalastas said those documents may no longer be accepted once the FATF sanctions become effective.
"We are not sure if these IDs will be acceptable to Japan’s regulatory authorities but it could not be helped," he said.
Last Friday, the FATF rejected the amendments to the anti-money laundering law as insufficient to fight the flow of dirty money and told its members to impose counter-measures against the Philippines.
The measures will take effect on March 15 and the Philippines has until then to pass stronger safeguards against money laundering.
Even the threat of censure is beginning to take its toll.
Finance Secretary Jose Isidro Camacho said the country’s failure to have a sufficient law against money laundering was among the factors cited by the California Public Employees’ Retirement System (Calpers) for a plan to exclude the country from its investments.
Calpers, the biggest pension fund in the United States, was scheduled to decide today whether to heed the recommendation of its consultant, Wilshire Consulting, to take the Philippines out of its investment portfolio.
The Asian Development Bank has withheld a $150-million loan unless Congress passes "amendments to the anti-money laundering law in line with the international norm," Sen. Ralph Recto said yesterday.
And a recent 300-million euro bond issue by the Philippines fell up to 200 million euros short of target and analysts have bemoaned the uncertainty caused by the risk of sanctions.
"Let us try to move towards meeting the requirements of the FATF. We will not be distracted by making side comments on this issue," he told a press briefing.
Arroyo said the sanctions could have been avoided had Camacho and Bangko Sentral ng Pilipinas chief Rafael Buenaventura defended the amendments before the FATF.
Congressmen, on the other hand, are divided on who to blame except themselves.
Camacho and Buenaventura, who had warned lawmakers of stiff sanctions if they failed to amend the law sought by the FATF, brushed off the criticism.
"The counter-measures are being imposed not because the amendments that emerged out of Congress were unacceptable but because we have not been able to amend at all," Buenaventura said.
And if they had wanted to defend it, Buenaventura said they could not do so because the President did not sign the amendments into law.
"If you don’t like the message, don’t shoot the messengers," Camacho told reporters.
Guillermo Luz, executive director of the Makati Business Club, dismissed the criticism as "irresponsible political talk."
"He is just trying to pass the buck, trying to blame someone else for their own decision," he said.
Sen. Francis Pangilinan, who backed stronger amendments, said blaming Camacho and Buenaventura was unfair.
"The question is, do we want to play ball?" he said. "If so, then we have to play by certain rules and part of the rules is that we have to have an anti-money laundering regime that is consistent with international standards."
Rep. Herminio Teves blamed the senators who voted to water down the amendments for the impasse. "We want to maintain our pride not to be dictated upon. We gave up that pride a long time ago when Filipinos began working overseas because we cannot provide them jobs here," he said.
Congress beat a Feb. 12 deadline to pass amendments but the FATF, set up under the Organization for Economic Cooperation and Development, said the measures failed to address "deficiencies" in the law.
It gave the Philippines until March 15 to enact the changes or be hit by counter-measures that Philippine officials have warned could lead to delays in financial transactions.
The most seriously affected would be the seven million Filipinos working overseas who remit their salaries back home to their families, they said.
Filipino expatriate workers remit an estimated $6 billion in earnings to the Philippines yearly, a crucial amount for the country’s frail economy.
Camacho said leaders of the Senate and the House of Representatives will seek to recall amendments to the law this week to head off the FATF sanctions.
Last week, a Senate-House committee submitted to the President changes to the law that lowered the threshold for bank transactions to be investigated from the present P4 million ($74,000) to about P540,000 ($10,000).
But senators voted to retain a provision that requires court permission before a suspect bank account can be investigated, unless it involves cases of kidnapping for ransom, drug trafficking or terrorism.
Those who voted for the provision were Senators Arroyo, Panfilo Lacson, Gregorio Honasan, Edgardo Angara, Tessie Aquino Oreta, Vicente Sotto, Manuel Villar, Rodolfo Biazon, John Osmeña, Loren Legarda, and Aquilino Pimentel.
Drilon tried to convince them last night to change their mind and was still closeted with his colleagues as of press time. Pimentel and Sotto said they won’t change their vote.
"The need for a court order is the only protection ordinary citizens have against possible abuses," Pimentel said.
Senators decided to call Camacho and Buenaventura to appear tomorrow to know what the FATF exactly wants.
Banking officials say prior court approval made it extremely difficult to look into an account before the money was transferred elsewhere.
Mrs. Arroyo has refused to sign the amendments into law to give Congress time to meet the FATF requirements. — With Des Ferriols, Marichu Villanueva, Jess Diaz, Paolo Romero, AFP