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The Bangko Sentral ng Pilipinas (BSP) is enforcing a new cash withdrawal cap of P500,000 per day as part of efforts to mitigate money laundering threats related to substantial cash dealings.
BSP Governor Eli Remolona Jr. published on Thursday Circular No. 1218 instructing all supervised financial institutions (BSFI) to execute “enhanced due diligence (EDD) on high-value cash-related payments and transactions.”
According to the circular, a limit of P500,000 or its equivalent in foreign currency can be withdrawn in a single transaction or through multiple transactions within one banking day.
The BSP stated that transactions surpassing the limit may only be executed via check payment, fund transfer, direct credit to deposit accounts, or the BSFI’s digital payment systems.
“In its recent sectoral risk evaluation and surveillance monitoring, the BSP has observed money laundering, terror financing, and proliferation financing risks emerging from cash transactions of banks and other BSP-supervised financial firms,” the circular stated. “These investigations have highlighted the exploitation of cash-based transactions to move illicit funds into and out of the financial ecosystem.”
The BSP released this circular amid an ongoing inquiry into allegedly irregular flood control initiatives involving government personnel, contractors, and other entities.
“With this adjustment, the BSP aims to bolster efforts against the use of cash for unlawful activities, enhance confidence in the financial system, and guarantee that it can adapt to emerging risks,” the central bank stated.
Nonetheless, the central bank noted that BSFIs may still permit withdrawals exceeding the P500,000 limit if the client provides documentation of a legitimate business intent. Such transactions may receive approval following the BSFI’s enhanced due diligence and the submission of a suspicious transaction report (STR).
“If the BSFI is unable to satisfactorily fulfill the EDD procedures or has reasonable grounds to believe that executing the EDD process will alert the customer, it must file a suspicious transaction report and closely observe the account while reviewing the business relationship,” the circular elaborated.
“The BSFI is also urged to take into account the alerts, red flags, and suspicious indicators, alongside typologies noted/reported by relevant government authorities, concerning large or atypical cash transactions when filing STR,” it added.
The circular will become effective 15 calendar days following its publication in the Official Gazette or in a widely circulated newspaper.
On Wednesday, the Court of Appeals froze assets linked to a potential money laundering operation involving 26 Department of Public Works and Highways (DPWH) officials and private contractors purportedly associated with dubious government flood control projects. — Katherine K. Chan
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