The Bangko Sentral ng Pilipinas (BSP) is again urging the 18th Congress to enact several game-changing structural reforms including the bank deposits secrecy and Agri-Agra bills to ensure inclusive growth in a post-pandemic recovery.
“The BSP’s legislative agenda aims to strengthen the banking system, foster financial inclusion, enhance the delivery of and address social issues related to access to financial products and services, and support economic growth,” said BSP Governor Benjamin E. Diokno on Friday, Jan. 21.
“(We) should not let the COVID-19 pandemic derail our long-term goals,” said Diokno. “With or without crisis, we should continue to pursue structural reforms that would put the Philippines not just on the road to pre-crisis growth but on a sustainable path of development,” he added.
For the BSP, the list of crucial legislative measures include: the proposed Financial Products and Services Consumer Protection Act or the Financial Consumer Protection (FCP) Act; the Bank Deposits Secrecy Bill; amendments to the Agri-Agra Law; amendments to the charter of the Philippine Deposit Insurance Corporation (PDIC); and the Bank Accounts and E-Wallets Regulation Bill.
Diokno has been especially focusing on the FCP Act after presenting his deliberations before the Senate last Jan. 7. “The enactment of the FCP Act is envisioned to provide an armor of protection to all financial consumers,” he has told senators, and it “will ensure that relevant government institutions and financial regulators will be fully equipped with the legal authority to enforce prudent, responsible, and customer-centric standards of business conduct.”
The BSP also supports the bank deposits secrecy as a necessary tool to prove fraud, serious irregularity, or unlawful activity “when reasonable ground is found to exist in the exercise of its supervisory powers, as well as in its investigation of closed banks.” When passed, the bill will allow BSP to examine banks in a holistic manner to assess risk areas such as financial condition, risk management, and corporate governance.
Diokno is also renewing his previous calls for the amendments to the Agri-Agra Reform Credit Act of 2009 to strengthen rural development and improve access of agricultural and rural community beneficiaries. The bill allows this “by taking a holistic approach that considers the broader agricultural financing ecosystem and rural community development requirements.”
The BSP said it is also urging the legislature body to pass the proposed changes to the PDIC charter which would bring the co-regulator to the BSP as an attached agency.
Currently, PDIC is a unit of the Department of Finance. As part of the BSP, there will be “better policy and program coordination and streamline the regulatory framework in the financial sector,” said the BSP.
The BSP likewise has been pushing for passage of the e-wallets bill to “protect people from falling prey to various cybercrime schemes”.
“The BSP also supports the legislative measure that will regulate and prohibit the use of bank accounts, e-wallets, and other financial accounts for criminal activities. Should this measure become a law, it will strengthen consumer protection and inspire trust and confidence in the financial system,” said the BSP.
Diokno has also expressed his support for the amendments to the Retail Trade Liberalization Act, which was signed into law as Republic Act No. 11595 by President Duterte last December.
The BSP also supports the revisions to the Public Service Act which still has to go through bicameral proceedings and the amendments to the Foreign Investments Act, which is awaiting approval from Duterte.
On the FCP Act, Diokno said recently that consumer complaints received by the BSP has been rising and in the last three years or from 2019, it has processed some P2-billion worth of complaints via its Consumer Assistance Management System (CAMS).
For both the pandemic years of 2020 and 2021 only, Diokno said CAMS processed 42,456 complaints that have been escalated to the BSP against its supervised financial institutions (BSFIs). These are customer complaints against banks, non-banks, e-money issuers, operators of payment system, among others.
During the first year of the pandemic, in 2020, Diokno said hacking and other malware attacks “surged by a whopping 2,324 percent from the previous year while phishing and other social engineering schemes increased 302 percent from 2019.”
In 2020, complaints about account takeover or identity theft went up by 2.5 percent, while Card Not Present fraud declined by 26.8 percent. However in 2020, phishing and other social engineering schemes notably increased. On the other hand, skimming and ATM-based cyber fraud declined in 2018 until 2021 since BSFIs have all migrated to EMV chip technology.