After RCBC, which is next?



IF dirty money was able to pollute one of the local banks and the central bank wasn’t able to notice it, the same could be possible in the stock while the Securities and Exchange Commission wasn’t looking.

While the senators have yet to uncover the identities of the culprit or culprits and the schemes they used in stealing $81 million from the government of Bangladesh, the Philippine Stock Exchange could be the next target of unscrupulous money operators. That is, if dirty money has not yet been used in trading on any of PSE-listed stock.

This is not to suggest that Hans Sicat, PSE president and chief executive officer and also a member of the 15-person board, has been lax in policing the exchange. He is strict, for sure, in monitoring market players with the entire board behind him, especially since the PSE functions as self-regulatory organization.

Yet, despite efforts to prevent the incursion of illegal money into the stock market, chances are that dirty players who take risks to “wash” their illegally obtained cash assets may be a step or even way ahead of regulatory gatekeeping.

Look at how a branch of Rizal Commercial Banking Corp. (RCBC) has been used as conduit in the $81- million cyber heist. No one among the senators has asked how and why the Bangko Sentral ng Pilipinas (BSP) failed to monitoring the deposits and withdrawals of unusually large amounts involving accounts with the RCBC branch.

Should the question be rephrased like this, How RCBC’s gatekeeping failed the BSP?

All this happened despite the Anti-Money Laundering Council (AMLC). AMLC is composed of the BSP governor as chairman and the heads of the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) as members.

Apparently, Congress has tapped the chiefs of the BSP, SEC, and IC for the AMLC because of their respective regulatory functions. The BSP regulates the banking industry, the SEC is the corporate watchdog that encompasses companies and the stock market, and the IC watches over the insurance industry. Aside from casinos, these are the sectors that lure Filipino and foreign investments.

Incidentally, casinos are exempted from reportorial requirement under the Anti-Money Laundering Act. Why this is so calls for a separate story.

Media exposure
With the triumvirate of BSP Gov. Amando Tetangco Jr., SEC Chairperson Teresita Herbosa and Insurance Commissioner Emmanuel Dooc, AMLC must be in good hands. Or is it?

The Senate’s open hearing on Bangladesh’s dollars has exposed the use of banks to launder dirty money. If an RCBC branch has fallen prey to money launderers, how safe are other banks and the PSE for that matter?

So far, the senators have only provided themselves a forum for media exposures thru lengthy questioning of the resource persons. They have not given the public enough reasons to stay glued to their TV sets while the public hearing is being aired live on national television, especially when they are perceived by the people as afraid of banks.

Why? Are the lawmakers afraid that one day they would find their bank accounts exposed to the public? That is, if they have anything to hide in the deposits and withdrawals involving their banks accounts.

Remember how the bank accounts of former Chief Justice Renato Corona were made public and his deposits summed up without deducting his withdrawals? That is according to Mr. Riogoerto Tiglao, a Manila Times columnist. The series of additions sans subtractions made the Chief Justice’s bank accounts appear bloated.

With what they were told during the Corona impeachment, the senators and the members of the House of Representatives should be wary of the “barbarians at the gate” to borrow the title of a book written by Bryan Burrough and John Helyar.

Barbarians are worth fearing for they are capable of doing things beyond what is legal to achieve their objectives.

If only the government would care to undertake precautionary measures against money launderers, perhaps it could prevent the occurrence of any illegal activity in the stock market and the insurance industry. If a bank is no longer safe from money launderers, the same could be said of stockbrokerage firms and their clients.

By the way, when the Anti-Money Laundering Act took effect in 2001, I asked a bank manager how he would deal with AMLC’s reportorial requirements.
His method of reporting big deposits was simple: he would report his branch’s deposits and withdrawals. It was up to his superiors at the head office to apply the know-your-client rule and make the required filing with the AMLC. (For a related story, please see “SEC’s failure as securities regulator, which appeared on March 1, 2016 in this space.)


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  1. alexander hermann on

    The Sri-Lankan businesswoman who was expecting to receive part of the loot from Bangladesh, did not receive the money transfer due to misspelled word “Foundation”, claimed that all her bank and business assets were already frozen by the Sri Lankan Government. She said further that it was a Japanese national who initiated everything in their business proposal and transaction as early as 2014. If there is truth to her story, then the syndicate is composed of several nationalities.

  2. How hypocrite Enrile is to invoke the strict observance of the secrecy of deposit in the ongoing investigation of the RCBC money laundering case. During the Corona impeachment, he allowed the opening of Corona’s bank accounts even if these were illegally sourced from alleged small lady and the gate of the house of one congressman. These are all in exchange for the PDAF and DAP bribe money.

  3. Amnata Pundit on

    If this happened in a country like the U.S., you can be sure that the offices and homes of all those involved especially the Philrem officials and their associates will be raided by the FBI who will cart away everything including the kitchen sink to be examined by dozens of white-collar crime experts. But this is the Philippines, so I am sure the missing $17Million is being used to bribe everybody, including the press so that they will not ask the right questions and mention certain names. Philrem is part of the Binay mafia. If it were the Marcos or Erap mafia, you can be sure all the newspapers will be bannering that angle every single day. The syndicate that pulled this off made a perfect choice with this country. They know that practically all government officials and the presstitutes will do anything for money.

  4. I am not saying that the SEC cannot be hacked, but RCBC case is different because it is a well planned heist by a big crime organization more like the TRIAD, Yakuza Russian Mafia,etc…it is so because they were able to breach the Federal Reserve of NY, in which several transactions were made to transfer almost US$980 M, and the $81 M to RCBC was the only one able to pass scrutiny. Anyway, if hackers was able to hacked NASA, US Military, Harvard, and was successful, anything is possible.

    • Hacking is not the biggest problem in this heist, it is RCBC that must be blamed. Even if there was the transmittal, a stop payment order was received by RCBC on time. Even if the accounts were hack, the robbery will not succeed without RCBC. The order was received by RCBC head office and the order was transmitted to the RCBC Jupiter br. RCBC is responsible for all these mess.