Jan.01, 2010, 20:26

RELAXING the rules of the Bangko Sentral ng Pilipinas (BSP) on foreign-exchange transactions, which now exempt offshore investments below $30 million from BSP scrutiny, may be misused for money-laundering activities by unscrupulous individuals, Sen. Loren Legarda warned on Monday.

In a statement, Legarda voiced concerns that the new rule, where banks and nonbanks and their clients only need to get BSP approval for investments over $30 million, could entice “some corrupt people in the government to park their ill-gotten wealth outside of the Philippines to escape garnishment.”

“There may be good and valid reasons for this move by the BSP to allow just anyone to buy $30 million from local banks and to ‘invest’ the same abroad without needing approval anymore from the BSP,” the senator said, but added that “anyone can see how this relaxation of rules may be used by unscrupulous individuals, whether belonging to the private or public sector, to hide ill-gotten wealth abroad under the guise of investing.”

Legarda pointed out that with a new administration coming in by July 1, “some people who may have made a killing in government contracts under the outgoing administration may take advantage of the new BSP rule.”  She added that “money laundering, despite our having already passed an antimoney-laundering law, remains a serious concern here.”

The senator warned that the relaxation of the BSP rules may induce “capital flight” at a time when the Philippines should be enticing foreign investors to invest in the country.

“Diversifying investment opportunities for local businessmen should be balanced with our country’s own need for investments,” Legarda added.