Senate probe on banks' failure to flag POGO-related suspicious transactions urged

A resolution seeking to investigate the apparent failure of local banks to flag POGO-related suspicious transactions linked to criminal activities in the country has been sought.

Senator Sherwin Gatchalian has filed proposed Senate Resolution 1193 amid the case of former Bamban, Tarlac Mayor Alice Guo, also tagged as Chinese national Guo Hua Ping.

In the said resolution, Gatchalian noted the existence of bank transactions involving the companies of Guo amounting to "hundreds of millions of pesos" which supposedly enabled the construction and establishment of the POGO hub in Bamban.

Such amount is far beyond what the financial statements indicated in the financial capacity of these companies, Gatchalian noted.

He added that a remarkable surge of cash flows, check disbursement, and a number of transactions involving Guo accounts was highest in 2020 which was "highly unusual and suspicious" considering that the COVID-19 pandemic paralyzed businesses and economies worldwide.

"These transactions involving significant amounts of money were coursed through the banking system and unfortunately, were not flagged by the concerned banks and financial institutions," Gatchalian said.

"Such failure of these banks to report these dubious transactions raises matter of the effectiveness of their internal controls and procedures for identifying and reporting suspicious transactions," he added.

Gatchalian emphasized that it is incumbent upon financial institutions to collect and analyze financial data to identify suspicious transactions and patterns that may indicate money laundering.

"These circumstances raise questions on the adequacy of existing Anti Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations and guidelines for banks and financial institutions," he said.

The lawmaker also noted that the Philippines remains to be in the grey list of the Financial Action Task Force (FATF) and the country needs to enhance AML/CTF activities through actions involving money laundering and terrorism financing prosecution, beneficial ownership information, cross border declaration measures, among others.

While President Ferdinand "Bongbong" Marcos jr. has directed all government agencies to complete all the deliverables for the country's removal from FATF's grey list, Gatchalian said the private sector's support and compliance are crucial in the collective effort to strengthen the country's AML/CFT regime.

This, he said, includes increased compliance with AML/CFT obligations such as filing of covered and suspicious transaction reports. — RSJ, GMA Integrated News