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Philippine CB Tightens Rules to Fight Money Laundering

Philippine  CB Tightens Rules to Fight Money LaunderingPhilippine  CB Tightens Rules to Fight Money Laundering

The Philippine central bank is tightening its surveillance of money-remittance firms to ensure they would not be used to launder dirty money and facilitate terrorist financing.

The Bangko Sentral ng Pilipinas on Friday approved new rules requiring money service businesses to register with a government body set up to fight money laundering and report suspicious trades and transactions, Reuters reported.

In June, the central bank revoked the license of a remittance company that anti-money laundering investigators said was used to transfer some of the $81 million hackers looted from the Bangladesh central bank.

To enhance oversight, the central bank said it would introduce classifications of money service firms depending on the size of their business and would impose a minimum capital requirement for each type. 

Nestor Espenilla, central bank deputy governor in charge of banking supervision, said there was a need to update and upgrade the regulations “given rising volume of activity and innovations being observed in the sector”.

The enhanced framework would also help combat terrorist financing and “slow down” shadow banking activities, Espenilla said.

The new rules would limit money service businesses’ ability to transact in cash. The central bank also placed a cap on the amount of foreign currency that can be sold by money changers.

The Southeast Asian nation had more than 18,000 BSP-registered money service businesses, 6,700 of which are BSP-authorized pawnshops, as of June 2016, central bank data showed.

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