The failure of local banks to identify suspicious transactions connected to criminal activity and Philippine Offshore Gaming Operators (POGOs) has prompted a request for an investigation by Senator Sherwin Gatchalian of the Philippines. In reaction to the financial activities of former Bamban, Tarlac Mayor Alice Guo, whose companies are purportedly channeling large quantities of money into a POGO hub building project, he has proposed Senate Resolution 1193.
Gatchalian brought attention to an increase in bank transactions totaling hundreds of millions of pesos associated with Guo’s companies—amounts that greatly surpassed what the financial statements of the companies could support. In 2020, the global COVID-19 pandemic caused most businesses to struggle, yet there was a noticeable increase in transactions during that year. The financial system did not consider these transactions suspicious, even though they involved exceptionally huge quantities.
Concerns Over Bank Controls and Reporting Failures
Senator Gatchalian questioned why banks failed to report these high-value transactions, raising doubts about their internal procedures and controls. He criticized financial institutions for not adequately analyzing financial data to spot potential money laundering. According to him, these lapses undermine the effectiveness of existing Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) guidelines that require banks to identify and report suspicious behavior.
“The banks’ inability to report such dubious activities casts doubt on their internal controls,” Gatchalian stated. He emphasized the need for stricter adherence to AML/CTF obligations, suggesting that current regulations may not be stringent enough to catch and prevent such activities.
The continuous fight by the Philippines to be taken off the Financial Action Task Force’s (FATF) “grey list” is another topic brought up by Gatchalian’s resolution. The nation has come under fire for not doing enough to stop the funding of terrorists and money laundering. The senator emphasized that in order to address these problems, compliance efforts must be strengthened by the public and commercial sectors.
Although government agencies have been instructed by President Ferdinand Marcos Jr. to comply with FATF regulations, Gatchalian maintains that private sector compliance is just as important. He emphasized that in order to fortify the country’s AML/CFT system, banks and other financial institutions must improve the procedures they follow for reporting suspicious and covered transactions.
Gatchalian believes that without proactive steps, the Philippines’ financial system remains vulnerable to exploitation. He urged the Senate to act swiftly, reinforcing the need for stronger regulations and oversight to prevent future lapses.
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