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Legislator files bill revoking absolute confidentiality of foreign currency deposits

10 February 2012 No Comment

Office of Representative Antonio L. Tinio

ACT Teachers Party-List

House of Representatives



NEWS RELEASE

February 9, 2012

Reference: ACT Teachers Party-List Rep. Antonio L. Tinio (0920-922-0817)

Legislator files bill revoking absolute confidentiality of foreign currency deposits

ACT Teachers Party-List Representative Antonio Tinio has filed House Bill 5809, which seeks to amend the Foreign Currency Deposit Act of the Philippines (Republic Act 6426) by revoking the absolute confidentiality conferred upon foreign currency deposits, allowing their examination “in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.” The bill also removes the exemption granted to foreign currency deposits from any form of governmental order or process. “These privileges granted by law to foreign currency deposits effectively place them beyond the reach of government,” noted Tinio.


“The impeachment trial of Chief Justice Renato Corona has highlighted the possibility that corrupt government officials could exploit the absolute secrecy afforded to foreign currency deposits to conceal their ill-gotten wealth,” he added.

The full text of House Bill 5809 and its Explanatory Note may be found below:

Republic of the Philippines

HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS

Second Regular Session

HOUSE BILL NO. 5809

Introduced by

ACT Teachers Party-List Representative Antonio L. Tinio


EXPLANATORY NOTE

In 1977, Presidential Decree 1246 conferred an “absolute cloak of confidentiality” over foreign currency deposits and exempted them from “attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body” to “better encourage the inflow of foreign currency deposits” into Philippine banks that could channel these funds into loans and investments, and thereby contribute to the country’s economic development.

Subsequent developments have rendered obsolete these special protections provided by law to foreign currency deposits. While there may have been a relative scarcity of foreign currency in the domestic banking and financial system in the 1970s, this is clearly no longer the case today. Remittances by Overseas Filipino Workers, totaling over US$ 18.3 billion in the first 11 months of 2011, on top of traditional sources of foreign currency, ensure that the country’s foreign exchange reserves are at an all-time high.

Furthermore, recent events have shown how the absolute and unqualified secrecy of foreign currency deposits, and their exemption from government orders or processes, may be exploited to cloak financial transactions by individuals and entities involved in illegal activities. For instance, government officials, including those conferred with immunity from suit during their incumbency and removable only through impeachment, may make use of foreign currency deposits to amass ill-gotten wealth with the assurance that these will be virtually beyond the reach of the State.

This bill proposes amendments to Republic Act 6426 (the Foreign Currency Deposit Act of the Philippines) that, while maintaining the secrecy and confidentiality of foreign currency deposits, allows their examination in certain exceptional cases, such as impeachment, or upon the order of a competent court. In addition, it proposes that their exemption from governmental orders or processes be removed. If this bill is enacted into law, foreign currency deposits will, in these respects, enjoy the same level of protection as deposits in the national currency.

 

 

_________________________

ANTONIO L. TINIO

Republic of the Philippines

HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS

Second Regular Session

HOUSE BILL NO. ________

——————————————————————————————————————————-

Introduced by

ACT Teachers Party-List Representative Antonio L. Tinio

——————————————————————————————————————————-

AN ACT AMENDING SECTION 8 OF REPUBLIC ACT 6426, OTHERWISE KNOWN AS THE “FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES”

Section 1. Section 8 of Republic Act 6426 (“Foreign Currency Deposit Act of the Philippines”), as amended by Presidential Decree No. 1035, and further amended by Presidential Decree No. 1246, is hereby amended as follows:

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;]. 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, EXCEPT UPON THE WRITTEN PERMISSION OF THE DEPOSITOR, OR IN CASES OF IMPEACHMENT, OR UPON ORDER OF A COMPETENT COURT IN CASES OF BRIBERY OR DERELICTION OF DUTY OF PUBLIC OFFICIALS, OR IN CASES WHERE THE MONEY DEPOSITED OR INVESTED IS THE SUBJECT MATTER OF THE LITIGATION. [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.]

Section 2. All laws, decrees, resolutions, orders, or ordinances or parts thereof inconsistent with this Act are hereby repealed, amended or modified accordingly.

Section 3. This Act shall take effect fifteen (15) days after its publication in the Official Gazette or one (1) newspaper of general circulation.

Approved,

 

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