Can we bank on our local banks?

If no less than the Chief Justice of the Supreme Court complains that banks can’t be trusted and accuses them of leaking confidential account details, then what assurance do ordinary Filipinos have that the same won’t happen to them? Chief Justice Renato Corona has accused PS Bank of leaking his bank records — a very serious charge considering that the Philippines supposedly has one of the “strictest” banking laws in the world. Republic Act 1405 known as the Bank Secrecy Law very clearly says that all types of deposits including government bonds are of absolutely confidential nature and as such, no one has any business sniffing into the details of these records. Neither can any bank official or employee disclose such details without the written consent of the account holder.

Like in any law, there are exceptions. And in the case of RA 1405, disclosure of deposit records is allowed upon orders of a competent court or in cases of impeachment. But in the case of the Corona accounts, the disclosure was apparently made under suspicious and unlawful circumstances. Copies of the specimen signature cards as well as transaction records were allegedly given by an anonymous “small lady” to Oriental Mindoro Congressman Rey Umali (who turned them over to his colleagues in the prosecution team) - not through the parameters specified by the law, a seasoned lawyer closely watching the impeachment proceedings pointed out. In the first place, the prosecution team did not include the existence of such bank accounts in their articles of impeachment — giving credence to accusations that the prosecution team had planned to engage in “fishing” for proof along the way.

Even RA 6426 or the Foreign Currency Deposit Act expressly forbids the disclosure of foreign currency details especially without the consent of the depositor. It’s no secret that unauthorized disclosure of confidential bank records could jeopardize the safety of the account holder and lend him vulnerable to insidious parties - which is why some depositors are labeled under the “Politically Exposed Personalities” or PEP category.

And judging from recent events, it’s becoming clear that our bank secrecy laws have no teeth - and offer no real protection for depositors who could become targets of criminal syndicates. As a matter of fact, several Chinese businessmen have been complaining about banks suspected of giving out confidential information. According to some friends, a surge in kidnappings (many of them unreported) occurs right after large deposits by wealthy Chinese are made. Coincidence? Definitely not in the eyes of the victims and their families.

As far as we know, no one has been sent to jail for violating the country’s bank secrecy laws, and in all probability, the “small lady” will remain anonymous without any fear of punishment at all. During the impeachment trial of then President Joseph Estrada, the decision to release the bank records of Jose Velarde - the deposit account allegedly maintained by Estrada - supposedly came from the top executives of the bank, with Equitable SVP Clarissa Ocampo hailed as a heroine for testifying that Estrada was the real owner of the Jose Velarde account. As everyone now knows, the controversial second envelope supposedly containing evidence that would nail Erap turned out to be a dud.

As a result, Equitable Bank experienced a bank run with massive withdrawals by major depositors — but just the same — whatever happened to the bank executives? Were they ever criminally charged? Is the same thing going to happen again with the PS Bank officials who are criminally liable for allegedly leaking Chief Justice Corona’s account details? While many agree that the bank secrecy laws could be abused by tax evaders, smugglers and money launderers to hide ill-obtained cash, no less than Senate President Juan Ponce Enrile has noted that amendments to the anti-money laundering act (or AMLA which government can use to look into the records of certain individuals suspected of wrongdoing) should not be made unless the Senate first finds out who was responsible for leaking the details of CJ Corona’s account.

Many agree with Enrile: amending the AMLA now is ill-timed, and could render innocent depositors vulnerable and helpless against government officials who might use the law out of vindictiveness and less-than-noble motives. As an observer wryly commented, the laws in this country seem to be very flexible — described as “bamboo laws” meaning they bend and sway like the bamboo depending on which way the wind is blowing or who is currently in power. This has long been the complaint of foreign investors and businessmen who are dismayed at the perceived arbitrary and seemingly whimsical interpretation of laws in this country, where a valid contract or agreement could suddenly get terminated without any notice. Or if any notice is given at all, it is done through media press cons or announcements.

Giving higher penalties for anyone making unauthorized disclosure of bank records is definitely in order instead of opening up or watering down existing bank secrecy laws. No wonder a lot of foreign banks have an edge over local banks because they are perceived to be more protective of their depositors. In countries like China, it is a crime to even inquire about one’s bank account if the person has no legitimate reason for doing so.

If bank secrecy laws in this country will be like “bamboo laws” and violators simply go unpunished, then we might as well scrap the law and make everyone’s bank account details freely accessible. When that happens, people can no longer bank on our local banks and no one can blame them for parking their money in banks outside the country.

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