'Weak' Amla threatens PH economic gains

by Mia M. Gonzalez, BusinessMirror

Posted at Jan 08 2013 08:23 AM | Updated as of Jan 08 2013 05:07 PM

MANILA, Philippines - The economic gains of the Aquino administration may be imperiled by the absence of a stronger anti-money laundering law as proposed by Senate Bill (SB) 3123, a senator said on Monday, as he urged other lawmakers to support the passage of the bill.

In a statement, Sen. Teofisto “TG” Guingona III cited an International Monetary Fund (IMF) report dated December 14, 2012, which he said “validates the urgency” of passing SB 3123 which strengthens the Anti-Money Laundering Act (Amla) by expanding its covered institutions, among other things.

“A weak anti-money laundering legal framework discourages legitimate banking activities and invites instead criminals who seek to make the Philippines a safe haven for their unlawfully acquired money,” Guingona said.

The senator was referring to the “Anti-Money Laundering and Combating the Finance of Terrorism in Surveillance and Financial Stability Assessments” report of the IMF.

In its report, the IMF said, “money laundering, terrorist financing and related predicate crimes can undermine the stability of a country’s financial system or its broader economy in a number of wants and may have spillover effects on global stability.”

“Threats to financial stability and macroeconomic performance can be directly attributable to money laundering and terrorist financing in certain cases, resulting, for example, in loss of access to global financial markets and destabilizing inflows and outflows,” the executive summary of the IMF report said.

Guingona believed SB 3123 would prevent the inflows of so-called hot money in Philippine financial institutions, which could undermine the economic progress being enjoyed by the Aquino administration so far.

“SB 3123 serves to reinforce our country’s anti-money laundering legislative measures. It ultimately addresses the noted deficiencies in the Philippines’s legal framework with regard to anti-money laundering, by making our state fully compliant with international standards,” he said.

SB 3123 is proposing the expansion of “covered institutions” under the Amla to include casinos, real-estate agents, dealers in precious metals/stones, foreign-exchange corporations, money changers, and preneed companies.

“There is a need to monitor possible money-laundering activities in other institutions. More and more, ‘dirty
money’ is being laundered by betting in casinos, buying jewelry and later on reselling them, and converting unlawfully acquired funds into real-estate property,” Guingona said.

The law also proposes an expanded list of unlawful activities to include terrorism, conspiracy to commit terrorism, bribery, fraud and illegal exactions and an extended definition of money laundering.

Guingona is urging other senators to speed up the passage of the measure, which is expected to be taken up in the plenary once the Senate resumes session on January 21, 2013.