House won't lift secrecy of bank deposits

Posted at 03/27/14 2:27 AM

MANILA, Philippines - The House of Representatives will not allow the lifting of the secrecy of bank deposits and other transactions, Speaker Feliciano Belmonte Jr. said yesterday.

He said scuttling such protection could result in capital flight, as it would affect depositors’ confidence in the banking system.

“I am against it. Certainly, volume of deposits will be affected. We should not allow the erosion of public confidence in our banking industry,” he said.

Belmonte was commenting on the proposal of Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) to lift the secrecy of bank transactions to make it easier for her agency to flush out tax evaders.

Other House leaders echoed Belmonte’s fears.

Isabela Rep. Giorgidi Aggabao, a deputy speaker, said Congress would be committing a “big mistake” if it agrees to Henares’ proposal.

“I think that will be a big mistake. If the veil of bank secrecy is lifted, I am almost sure capital flight would ensue,” he said.

Marikina Rep. Romero Quimbo said the legislature might violate the citizens’ constitutional right to privacy if it lifts the secrecy of bank deposits.

“One of these rights under the right to privacy is the secrecy of bank deposits. We cannot allow a carte blanche and unqualified access by the BIR to taxpayers’ bank deposits. There must be very specific and carefully crafted grounds for the BIR to start opening bank accounts, otherwise this will be abused,” he said.

“For instance, there must be some degree of determination that a taxpayer is already found prima facie to have been evading taxes before you can open bank accounts. Anything more liberal than this will be deemed unconstitutional,” he said.

Quimbo chairs the committee on ways and means, where any BIR proposal is scrutinized.

Rep. Luzviminda Ilagan of party-list group Gabriela described Henares’ suggestion as “dangerous.”

“It sends a chilling effect to investors. Money laundering abroad will become an option that can impact negatively on our economy. Privacy is violated. The BIR should focus on the big violators,” she said.

Valenzuela Rep. Magtanggol Gunigundo, a deputy majority leader, said he does not see any reason why Republic Act 1405, or the Bank Secrecy Law, should be disturbed at this time.

He said he does not understand why Henares wants to pry bank accounts open directly or indirectly.