Inside Philippine politics & beyond

Does the bank secrecy law really protect ALL of Corona’s dollars?

Share:
LinkedIn0
Pinterest0

A commentary

By Raïssa Robles

Dollars1Everyone assumes that all the US dollars that Chief Justice Renato Corona stashed in banks are covered by the bank secrecy law.

Let me offer the theory that they might not be ALL covered and the Senate impeachment court can legally look into them.

Yes, I know I am a mere reporter with no formal training in law. But I’ve had the experience of watching senators up close while they crafted our nation’s laws. And as a business reporter, I’ve covered retail banking. Anyway, this week I ran these ideas past two high-level bank officials. None of them wanted to be identified (I wonder why?), so let’s just call them Banker A and Banker B.

However, what they told me are all verifiable.

Now to go back to the Bank Secrecy Law

The mother law is Republic Act No. 6426 or An Act instituting a foreign currency deposit system in the Philippines, and for other purposes.

RA 6426 has no section defining what constitutes “foreign currency”.

However, it has three sections that suggest the definition by stating how banks are supposed to treat “foreign currency”.

First, Section 4 states that banks taking in such deposits “shall maintain at all times a one hundred percent foreign currency cover for their liabilities…”

Section 4 recognizes that the act of depositing by a client establishes a kind of relationship and obligation between the bank and the customer. As Banker B explained to me –

Once you give money to the bank, the bank is indebted to you as a depositor. This is the relationship – the bank is borrowing from you in the form of a deposit. For that debt they will now pay you a certain amount of interest.

The next section in RA 6426 that further suggests a definition of “foreign currency” is Section 6:

Section 6. Tax exemption. – All foreign currency deposits made under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, including interest and all other income or earnings of such deposits, are hereby exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by residents or nonresidents so long as the deposits are eligible or allowed under aforementioned laws…

In other words, Section 6 gives all “foreign currency” deposits a 100 percent tax break.

The third section that suggests a definition of “foreign currency” is Section 9 which states:

Section 9. Deposit insurance coverage. – The deposits under this Act shall be insured under the provisions of Republic Act No. 3591, as amended (Philippine Deposit Insurance Corporation), as well as its implementing rules and regulations: Provided, That insurance payment shall be in the same currency in which the insured deposits are denominated.

In other words, foreign currency deposits are insured by PDIC.

Now let me go to my theory that not all foreign currency deposits are guaranteed confidentiality by RA 6246 or the bank secrecy law. Section 8 of this law states in particular:

Section 8. Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature…

Please note the phrase here – “all foreign currency deposits authorized under this Act”.

It is part of my theory that bank secrecy only covers those foreign currency deposits defined by RA 6426. In other words, only those foreign currency deposits that contain the following elements enumerated by RA 6426:

  • Those for which banks have to maintain a 100% foreign currency cover
  • Those with interest earnings that are not taxed by the government
  • And those that are insured by PDIC.

Why do I bring up these fine distinctions?

Because since RA 6426 came into law in 1974, banks have dramatically expanded the array of foreign currency products they offer their clients.

These are aside from the traditional savings, current and time deposits that were envisioned to be covered by RA 6426.

Today, clients can park their dollars in sovereign bonds, in commercial papers, unit investment trust funds (UITFs), mutual funds – all denominated in dollars and which are not tax-free and are not insured by the PDIC.

Why would a depositor want to move away from plain vanilla dollar accounts? One reason would be: Because the interest rate on dollar savings and time deposits are terrible.

According to Banker A, a US dollar time deposit now earns 0.25% per year. A US Treasury Bond earns 2% per annum. While a US dollar-denominated ROP (Republic of the Philippines) five-year bond can earn from 2% to 2.5%. In such transactions, “we merely act as a broker,” Banker B told me.

From this, we can see that if the client wanted to put his or her dollars to work earning something more than the miserable interest on time and savings deposit accounts, then investing in these products would make sense.

In fact, as Banker B  explained to me, “with a UITF or mutual fund, there is no such promise by the bank that it will pay a certain amount. It is not a bank obligation. This is a separate vehicle from the bank. In that sense, UITFs are not considered as bank deposits.”

Banker B also explained that while even mutual funds can now be bought through banks, these money market instruments are actually regulated by the Securities and Exchange Commission. In this case, the banks merely serve as “brokers” for these products.

In the case of such products, the bank has no customer liability, Banker B said.  The bank doesn’t pay interest to the customer. Rather, it is the customer that pays the bank a transaction fee for arranging the buy and doing the paperwork.

In such arrangements, the bank usually asks the customer to designate a particular bank account (either savings or current) as the “settlement account”. When the customer wants to liquidate the UITF or when a commercial paper or bond reaches maturity, proceeds including the interest earned from such products are deposited in this settlement account.

In addition, Banker A also explained to me further why a dollar bond or a UITF denominated in dollars, for instance, is not considered a foreign currency deposit as defined by RA 6426:

Iba nga talaga. Kasi hindi siya deposit. Hindi siya covered ng PDIC. Pag bumili ka ng bond, wala naman sa amin ang bond. You house it at a third party. We only facilitated. We act as a broker.

Halimbawa kung ikaw kliente, magpabili ka ng stocks, I give you confirmation of sale that you bought 10,000 shares. I deliver the receipt. Babayaran mo ko. Kukunin ko commission ko. That money goes to the central depository (PCD).

Pag nagpabenta ka. Ibibigay mo ang instruction, pupunta (yung instruction) sa broker. Kukuhanin namin shares sa PCD, ito ang pang-settle. Parang nagkaliwaan lang kayo.

From covering retail banking, I’ve also noted that while banks like PSB do not offer certain investment products, as its president Pascual  Garcia III testified today, they do routinely refer their customers to the head office of the mother bank, in this case Metrobank. Such referrals are coursed through the retail bank like PSB which then transacts with the head office or mother bank and charges a transaction fee for this service.

Because of this, it may be necessary for the Senate impeachment court to ask Metrobank and Bank of the Philippine Islands head offices whether CJ Corona has “foreign currency” investments with them. And not just dollars because some banks now have expanded their foreign currency-related transactions to euros and even yen.

Senator-judge Serge Osmeña seems to be on the same line of thinking

An hour ago, Osmeña asked PSB president and CEO  Garcia whether dollar bonds could be classified as deposits under RA 6426.

And so I would like to ask the following questions of the Supreme Court and the senator-judges:

Is my theory valid or plain hogwash?

If valid, can the Senate impeachment court now ask the banks to disclose any and all dollar transactions of CJ Corona revolving around such products? I believe that the moment an amount of foreign currency deposit from CJ Corona left the safe haven of savings and/or time deposit it loses the umbrella of confidentiality during that period. And these become legitimate subjects of inquiry by the Senate impeachment court.

For this piece, I had tried to interview a well-known lawyer who teaches banking law. But he declined to speak to me. Likewise, I tried to obtain an interview with officials of the Bangko Sentral ng Pilipinas but no one would talk to me.

Because of this, I have decided to throw my questions to the public and see that maybe, just maybe, some lawyers and banking experts will respond and share what they know.

I am posting below RA 6426 –

REPUBLIC ACT No. 6426

AN ACT INSTITUTING A FOREIGN CURRENCY DEPOSIT SYSTEM IN THE PHILIPPINES, AND FOR OTHER PURPOSES.

Section 1.Title.– This act shall be known as the “Foreign Currency Deposit Act of the Philippines.”

Section 2.Authority to deposit foreign currencies. – Any person, natural or juridical, may, in accordance with the provisions of this Act, deposit with such Philippine banks in good standing, as may, upon application, be designated by the Central Bank for the purpose, foreign currencies which are acceptable as part of the international reserve, except those which are required by the Central Bank to be surrendered in accordance with the provisions of Republic Act Numbered two hundred sixty-five (Now Rep. Act No. 7653).

Section 3.Authority of banks to accept foreign currency deposits. –The banks designated by the Central Bank under Section two hereof shall have the authority:

(1) To accept deposits and to accept foreign currencies in trust Provided, That numbered accounts for recording and servicing of said deposits shall be allowed;
(2) To issue certificates to evidence such deposits;
(3) To discount said certificates;
(4) To accept said deposits as collateral for loans subject to such rules and regulations as may be promulgated by the Central Bank from time to time; and
(5) To pay interest in foreign currency on such deposits.

Section 4.Foreign currency cover requirements.– Except as the Monetary Board may otherwise prescribe or allow, the depository banks shall maintain at all times a one hundred percent foreign currency cover for their liabilities, of which cover at least fifteen percent shall be in the form of foreign currency deposit with the Central Bank, and the balance in the form of foreign currency loans or securities, which loans or securities shall be of short term maturities and readily marketable. Such foreign currency loans may include loans to domestic enterprises which are export-oriented or registered with the Board of Investments, subject to the limitations to be prescribed by the Monetary Board on such loans. Except as the Monetary Board may otherwise prescribe or allow, the foreign currency cover shall be in the same currency as that of the corresponding foreign currency deposit liability. The Central Bank may pay interest on the foreign currency deposit, and if requested shall exchange the foreign currency notes and coins into foreign currency instruments drawn on its depository banks. (As amended by PD No. 1453, June 11, 1978.)

Depository banks which, on account of networth, resources, past performance, or other pertinent criteria, have been qualified by the Monetary Board to function under an expanded foreign currency deposit system, shall be exempt from the requirements in the preceding paragraph of maintaining fifteen percent (15%) of the cover in the form of foreign currency deposit with the Central Bank. Subject to prior Central Bank approval when required by Central Bank regulations, said depository banks may extend foreign currency loans to any domestic enterprise, without the limitations prescribed in the preceding paragraph regarding maturity and marketability, and such loans shall be eligible for purposes of the 100% foreign currency cover prescribed in the preceding paragraph. (As added by PD No. 1035.)

Section 5.Withdrawability and transferability of deposits.– There shall be no restriction on the withdrawal by the depositor of his deposit or on the transferability of the same abroad except those arising from the contract between the depositor and the bank.

Section 6.Tax exemption.– All foreign currency deposits made under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, including interest and all other income or earnings of such deposits, are hereby exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by residents or nonresidents so long as the deposits are eligible or allowed under aforementioned laws and, in the case of nonresidents, irrespective of whether or not they are engaged in trade or business in the Philippines. (As amended by PD No. 1246, from. Nov. 21, 1977.)

Section 7. Rules and regulations. – The Monetary Board of the Central Bank shall promulgate such rules and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the publications in the Official Gazette and in a newspaper of national circulation for at least once a week for three consecutive weeks. In case the Central Bank promulgates new rules and regulations decreasing the rights of depositors, rules and regulations at the time the deposit was made shall govern.

Section 8. Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private; Provided, however, That said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)

Section 9. Deposit insurance coverage. – The deposits under this Act shall be insured under the provisions of Republic Act No. 3591, as amended (Philippine Deposit Insurance Corporation), as well as its implementing rules and regulations: Provided, That insurance payment shall be in the same currency in which the insured deposits are denominated.

Section 10. Penal provisions. – Any willful violation of this Act or any regulation duly promulgated by the Monetary Board pursuant hereto shall subject the offender upon conviction to an imprisonment of not less than one year nor more than five years or a fine of not less than five thousand pesos nor more than twenty-five thousand pesos, or both such fine and imprisonment at the discretion of the court.

Section 11. Separability clause. – The provisions of this Act are hereby declared to be separable and in the event one or more of such provisions are held unconstitutional, the validity of other provisions shall not be affected thereby.

Section 12. Repealing clause. – All acts, executive orders, rules and regulations, or parts thereof, which are inconsistent with any provisions of this Act are hereby repealed, amended or modified accordingly, without prejudice, however, to deposits made thereunder.

Section 12-A. Amendatory enactments and regulations. – In the event a new enactment or regulation is issued decreasing the rights hereunder granted, such new enactment or regulation shall not apply to foreign currency deposits already made or existing at the time of issuance of such new enactment or regulation, but such new enactment or regulation shall apply only to foreign currency deposits made after its issuance. (As added by PD No. 1246, prom. Nov. 21, 1977.)

Section 13. Effectivity. – This Act shall take effect upon its approval.

Approved, April 4, 1974

Comments

  1. You are absolutely correct Ms. Raissa. The mere fact that such investments are not covered by PDIC make it outside the protection of the law on confidentiality because they are not deposits anymore.

  2. Asset and wealth management are not the usual banking products /services and where large amount of money are transacted, usually not in a branch, specially for large funds and specialty offerings. A branch manager may not know of these placements as these clients are managed by head office personal or relationship bankers. The senate should summon the bank head office asset managers to shed light on Corona’s placememts.

    Even insurance firms I believe like Philiam and AXA offer mutual funds through intermediary banks. These insurance firms are not banks but accepts fund placements. These insurance firms should be asked to produce information on Corona’s funds too.

  3. Am not a CJ Supporter or a Hater … but here’s just a Food for thought which came to my mind:

    IF I HAVE 10 MILLION PESOS
    THEN DEPOSITING IT IN A BANK
    (I WILL CALL IT SAVINGS A)

    then IF THE SAME MONEY … I WILL CONVERT AND BUY DOLLARS
    THEN DEPOSITING IT IN A BANK
    (I WILL CALL IT SAVINGS B)

    SO using the PREMISES ABOVE … and GIVEN that SAVINGS A came from SAVINGS B

    it IMPLIES that SAVINGS A = SAVINGS B in reality

    IS SAVINGS A not equal to SAVINGS B … (go ahead and ask your math teachers)

    anyway …
    again SINCE SAVINGS A = SAVINGS B

    1. that will imply that if the IMPEACHMENT can subpoena SAVINGS A then it can also subpoena SAVINGS B

    otherwise

    2. if the senate cannot subpoena SAVINGS B … then definitely it cannot subpoena SAVINGS A also since they are equal

    the point is …. no point … what’s the point ?

    it’s the same money period!

    • In simple terms, yes. That is why there is basis to question the FCD Act (or at least Section 8) on being violative of the Equal Protection Clause of the Constitution.

      I would argue that peso and dollar accounts should be treated equally (as what you mentioned in your comment). Under the law, there can be a variance in treatment of two objects/people but only when there is reasonable classification. To be reasonable, the classification (a) must be based on substantial distinctions which make for real differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing conditions only; and (d) must apply equally to each member of the class.

      40 years ago, the framers of the law intended to give special benefits to foreign currency holders to “entice” them to invest in the Philippines and the incentives included the confidential nature of bank deposits. At present however, the reason for the distinction no longer exists. There is no longer reasonable classification because (1) the purpose for the law is no longer needed and (2) the circumstances 40 years ago are different from the present day circumstances. Hence, for all intents and purposes, dollar accounts should not be treated any different from peso accounts.

      I cited below the Central Bank Employees Association case. [ http://www.chanrobles.com/scdecisions/jurisprudence2004/dec2004/148208.php ] It’s a lengthy read but can be very helpful.

      • In simple terms, yes. That is why there is basis to question the FCD Act (or at least Section Eight on being violative of the Equal Protection Clause of the Constitution.

        I would argue that peso and dollar accounts should be treated equally (as what you mentioned in your comment). Under the law, there can be a variance in treatment of two objects/people but only when there is reasonable classification. To be reasonable, the classification (a) must be based on substantial distinctions which make for real differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing conditions only; and (d) must apply equally to each member of the class.

        40 years ago, the framers of the law intended to give special benefits to foreign currency holders to “entice” them to invest in the Philippines and the incentives included the confidential nature of foreign currency bank deposits (Section Eight). At present however, the reason for the distinction no longer exists. There is no longer reasonable classification because (1) the purpose for the law is no longer needed and (2) the circumstances 40 years ago are different from the present day circumstances. Hence, for all intents and purposes, dollar accounts should not be treated any different from peso accounts.

        I cited below the Central Bank Employees Association case. [ http://www.chanrobles.com/scdecisions/jurisprudence2004/dec2004/148208.php ] It’s a lengthy read but can be very helpful.

  4. PSB has to be investigated by AMLC

    Whether in dollar or peso, when the deposits or withdrawals amount to equivalent of $10,001 or 500,000 pesos with suspicious activities, like multiple accounts and frequent moving of accounts, are subject to reporting to AMLA aside from requirement to the depositor to file a affidavit statement with the bank that the source of money is legal.

    Today, Garcia testified that in 2010 and 2011 Corona made large sum of time deposits in peso and withdrawn i a couple of months or less. Question
    1. Were the deposit accompanied by Corona statement on the source of money?
    2. Did PSB file a report with AMLA or filed the statements with AMLA?
    3. Did Corona earn interest or was subjected to penalties for early withdrawal. If he was not charged penalties for early withdrawal did Corona and the bank commit gift giving violation of RA6713 again?

    These are same questions to be answered on activities with foreign currency accounts. Without AML unit being proactive in investigating PSB on this public exposure of massive sum of money in multiple accounts and frequent movemens, our membership with International AML is in jeopardy. Plus the SC affirmation with a TRO that FCD deposits are absolutely protected by FCD law encouraging criminals to hide their money in Philippine banks.

    Aquino must execute executive orders or its military options because the action of SC is tantamount to economic sabotage of the country under the treaty it signed with AML countries. AML is tied up with OECD which is for economic deveopment of participating countries.

  5. you have a point there but at this stage this is still a matter of interpretation of the law considering that there is a TRO. Even for the sake of argument that you are right the SC still has to make a ruling that indeed not all are covered as per your explanation. Secondly, I am not sure if the nature of those $ deposits have been established as either savings or in a form of investments. Can/Will the bank even answer or confirm the nature of these $ accounts while the TRO is still in effect? Thats the tricky part but as always you have done a great job. Kudos…

  6. It is no longer a theory but a conclusion. Foreign currency denominated financial products sold by financial institutions such as banks to their depositors or investors are not deposits and therefore not covered by RA 6426.

  7. CORONA’S DOLLARS ARE NOT EVEN CONSIDERED AUTHORIZED FCDs if we are to correctly interpret the laws.

    In September 9, 1955 R.A. 1405 was enacted into Law

    The basis of R.A. 1955 are the following:
    1. To encourage people to deposit their money in banking institutions.
    2. To discourage private hoarding.

    Since when you encourage people to deposit their money institution, the same can be properly utilized by the banks in authorized loans to assist in the economic development.

    In 1974, there was growing need to institute a foreign currency deposit system in the Philippines and that is why in April 1974, R.A. 6426 was enacted into Law. Banks were authorized to accept foreign currency deposits from any person, natural or juridical and as such foreign currencies which are acceptable as part of the international reserve.

    Under Section 8 of R.A. 6426 we read the following:
    Section 8. Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private; Provided, however, That said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)

    Now the question arises, are FCDs absolutely confidential in nature?

    YES if such foreign currency deposits were authorized as defined in P.D. 1034.
    NO if such deposits were misrepresented as FCDs.

    So what is P.D. 1034 all about?
    An offshore banking system based in the Philippines will be advantageous and beneficial to the country by increasing our links with foreign lenders, facilitating the flow of desired investments into the Philippines, creating employment opportunities and expertise in international finance, and contributing to the national development effort.

    What is the nature of this AUTHORIZED FCDs?
    They are in fact in the nature of FOREIGN INVESTMENTS. This is intended for Foreign Lenders investing their FUNDS to offshore banking units operating in the Philippines. This was done to facilitate the flow of desired investments into the Philippines.

    Let us make the picture clearer.

    If you are a foreign company and would like to invest in the Philippines – then all you need to do is setup a company in the Philippines and put your FUNDS in an offshore bank operating in the Philippines. However, most foreign investors are worried about the secrecy of their funds and that is the reason why Section 8 was put in place. This is to protect the foreign investors FUNDS from the prying eyes of anyone (in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private).

    IS CORONA A FOREIGN LENDER OR SHOULD WE CONSIDER HIM A FOREIGN INVESTOR?

  8. In GSIS vs CA, et.al., GR No. 189206, the Supreme Court qualified the intention of RA 6426, thus, “xxx Republic Act No. 6426 was intended to encourage deposits from foreign lenders and investors.xxx”

    But since he is neither a foreign lender or an investor, Renato Corona’s foreign currency deposit accounts can only fall under the provisions of RA 1405 and should therefore be available for scrutiny by the impeachment court.

    This ruling was issued by the First Division of the Supreme Court only in June 2011. Ironically, the Division was chaired by Renato Corona himself!

  9. Under the Commentary of Rodel Rodis in the PDI dated 2/15/12, a lengthy comment was entered by Dani77777 with the heading of From: PROPINOY?net Mcmacavinta: posted the following
    BETRAYAL OF PUBLIC, ESTE, MARITAL TRUST
.

    It alleges that CJ is supporting a mistress and two children in the US. I just wonder how true is the allegation.

  10. Why is Sen. Bong-bong Marcos quiet about the dollar account of CJ Corona ? If he really wants to help and know the truth he can easily help the impeachment court .He and other members of Marcos family are experts on ill-gotten wealth.

  11. You’re correct, Raissa. Foreign currency products other than foreign currency deposits are not covered by RA 6426 and as such, complete disclosures from banks can be obtained.

    These financial products are sold to investors/depositors by banks and not covered by PDIC insurance.

    If these can be looked into by the impeachment court, the answer is yes.

    But the question is if the impeachment court can issue a blanket subpoena to any or all banks in the Philippines ordering them to provide information on any outstanding foreign currency products bought and sold by Corona as this would definitely be branded by the defense as another “fishing expedition”.

  12. Hi, Raissa,

    I used to be connected to a large multinational insurance company, so I have had some experience dealing with mutual funds and insurance products that are unit-linked (it is linked to an investment portion of the client’s choosing), otherwise called Variable Unit Linked products (VUL) and the clue as to what kind of product it is would be helped by what government agency oversees the regulation of said products.

    For VUL, it is the Insurance Commission that regulates, as there is an insurance component, it is primarily an insurance product with “investment benefits”.

    For mutual funds, it is regulated by the Securities and Exchange Commission. It is seen as a purely investment product, which the client willingly enters into, knowing the risks, it has no guarantees, and the fund performance is in line with what fund the client chose to invest in.

    In both cases, clients are REQUIRED to sign an AMLA form (Anti Money Laundering Act) form, to claim to the company upfront that the money to be used for either VUL or mutual fundswas not obtained illegally, and will not be used to fund illegal activities or to commit any activities of a similar nature.

    I think we also need to ask if the products where Corona invested in required him to sign the AMLA form. The form requires you to state where you will source your funds for either investment or insurance.

    • One of the Overseeing officers of AML is president of Insurance Commission, the others are BSP Governor and chairman of SEC(I think)

  13. Ma’am Raissa, maybe you can suggest this theory to some of the Senator-Judges because I personally believe your analysis has a strong point. The phrase in Section 8 “…..under THIS act….” might be of biggest assistance in our quest for truth and justice in this case.

    On a different but rather indirectly related topic, I cannot recall what legal groundsare used by Miss Clarissa Ocampo when she brought to Erap’s Impeachment Trial the bank documents pertaining to the Jose Velarde account. Is Erap not protected under the Bank Secrecy Law? Did Erap allow the disclosure of the said bank details? Did the Senate Impeachment Court issued a subpoena for those bank records? Kindly refresh my aging memory Ma’am Raissa.

    Thank you in advance and may God bless “REAL” journalists like you!

    • I’d like to share what I just read since this is relevant to the post of emmanuel42876. This is an article by Jose Ma. Montelibano of the Philippine Daily Inquirer

      “This is what we have confronting us – a law standing as obstacle in the pursuit of truth and justice, a law protecting even thieves who only have to hide money by converting and depositing the same to foreign currencies. When the dishonest have a law that allows them to hide their loot, how can a Prosecution ever get authenticated documents showing what they are hiding? I can understand the validity of Senator Miriam’s position but I can also see the unfairness of it all.”

      Link: http://opinion.inquirer.net/23215/patriots-from-psbank

  14. Make sense to me, you brought this up, probably by now Corona has sold all his dollar denominated investments.

    Prosecution needs the expertise of cong. Banal to fish for these dollar denominated investments of Corona.

  15. I agree with your analysis, Raissa. The rule on secrecy should extend only to DEPOSITS only and not other foreign currency instruments or products.

    Interesting to note that PD 1034 defines what a deposit is:

    (c) “Deposits” shall mean funds in foreign currencies which are accepted and held by an offshore banking unit in the regular course of business, with the obligation to return an equivalent amount to the owner thereof, with or without interest.

    The phrase “obligation to return” is consistent with what Banker A said.

      • The thing is once the Senate, acting as an impeachment court, takes that position the defense and/or the banks involved (and even Corona himself) will again go to the SC who will again issue an indefinite TRO using as grounds its ” judicial power of review” on “grave abuse of discretion amounting to lack or excess of jurisdiction”.

        Patay kang bata ka.

        • I agree.
          I think the Senate IC has already surrendered its power to the SC. This court is just humoring the people. The end of the story will show how inutile, inept, egoistic and intellectually dishonest some of the senators are. Let them finish this drama. If they they acquit the CJ due to legal technicalities which only lawyers can appreciate, so be it.
          But for me, and its only me, I have lost faith and become doubtful of the CJ. He must resign and not stay at the SC a minute longer.

        • If I were the prosecution team, I would intervene to oppose the TRO and cite:

          1. Unconstitutionality of the law on secrecy of FCD accounts on the ground of being violative of the Equal Protection Clause citing Central Bank Employees vs Bangko Sentral ng Pilipinas

          2. Public policy or “in the interest of justice” / to avoid creation of safe-haven for criminals

          I will also raise as an issue what Raissa pointed out on the law protecting only deposits and not other foreign currency instruments and products.

    • Deposits are on-book transactions of a bank, thus the “obligation to return ” is implied. Investments in bonds/cps/mutual funds/mutual funds/ etc are off-book sans recourse transactions, where the obligation to return is on the issuer of the instrument.