By Michelle Remo

Philippine Daily Inquirer

First Posted 06:04:00 10/09/2009

http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20091009-229136/Money-laundering-gets-BSP-okay

Filed Under: Central Banks, Banking

MANILA, Philippines — This large-scale “money-laundering” operation has the central bank’s stamp of approval.

The Bangko Sentral ng Pilipinas (BSP) Thursday said it was prepared to replace “dirty money”—or bills that were soiled by flash floods inside bank vaults during the onslaught of Tropical Storm “Ondoy” two weeks ago.

BSP Deputy Governor Nestor Espenilla Jr., however, explained that the banks should first “dry out” the soaked bills before handing them over to the central bank for replacement.

Wet currency will not be accepted since it would be “difficult to count,” the monetary official said.

At least one large bank has expressed interest to have its drenched stockpile swapped for fresh, crisp notes, he added.

“The BSP has bills ready to replace those that were damaged by the floods,” Espenilla told the Inquirer.

The BSP official made the assurance amid reports that banks located in Marikina, Pasig and nearby urban centers were not spared by the Sept. 26 deluge.

Tomas Gomez IV, spokesperson of the Rural Bankers Association of the Philippines (RBAP), conceded that flash floods of Ondoy’s magnitude may have easily entered most bank vaults, especially those built on the same level as the street.

“It’s possible that some banks had their bills soaked in flood because water can enter vaults,” Gomez said on the sidelines of RBAP’s annual convention Thursday at Sofitel hotel in Pasay City.

Meanwhile, the BSP has ordered banks to ensure uninterrupted services to the public—including the operation of automated teller machines—in the wake of the calamity.

Banks shut down by the floods and could not reopen immediately should put up alternative branches, the central bank said.