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Sherwin Gatalian, a Philippine senator, has proposed Senate Resolution No. 1193, which will investigate local banks’ failure to detect suspicious POGO transactions linked to criminal activity, in the wake of the case of Alice Guo, former Bamban Mayor of Tarlac.
In his resolution, Gatchalian highlighted bank transactions that involved Guo’s businesses, which totaled hundreds of millions pesos. These bank transactions were alleged to have funded the construction of POGO hubs in Bamban. The amount exceeded the financial capability of the companies as shown in their financial statements.
He noted a dramatic increase in cash flow, check disbursements and transactions that involved Guo’s account, with peaks in 2020. This is an anomaly, given the COVID-19 epidemic, which had disrupted economies and businesses worldwide.
Gatchalian pointed out that the banking system did not flag these large transactions as suspicious despite their size. He expressed concern about the banks inability to flag such suspicious activities.
Senator emphasized that it is the responsibility of financial institutions to analyse financial data and detect transactions that could indicate money laundering.
Gatchalian says that these circumstances raise questions about the current Anti-Money Laundering and Counter-Terrorism Financing regulations and guidelines.
Gatchalian has also stated that the Philippines remain on the grey list of the Financial Action Task Force. The Philippines must improve their AML/CTF effort, including prosecuting the money laundering and terrorist financing, addressing information on beneficial ownership and strengthening cross border declaration measures.
Gatchalian emphasized that while President Ferdinand Marcos Jr. instructed all government agencies on meeting the necessary requirements for the country to be removed from the FATF gray list, private sector compliance was equally important to strengthen the country’s AML/CFT system. This includes increased compliance with obligations such as reporting covered transactions and suspicious ones.
