The Bangko Sentral ng Pilipinas (BSP) is invoking a new law to investigate individuals implicated in the country’s flood-control corruption scandal.
The central bank has opened an inquiry into the bank accounts of those under scrutiny through the Anti-Financial Account Scamming Act (Republic Act 12010) or AFASA, along with its implementing rules which came into force in June this year.
The investigation centres on money muling, which the law criminalises.
Under Section 4(a) of AFASA, the use of a financial account to obtain, receive, deposit, transfer or withdraw proceeds known to be derived from criminal activity is considered money muling.
The BSP also reminded regulated entities of their obligations under Section 7 of AFASA, relating to the temporary holding of funds, as implemented by BSP Circular No. 1215, series of 2025.
The move follows an official request filed on Monday by Department of Public Works and Highways Secretary Vince Dizon.
“The BSP is using AFASA for the first time to join and assist other agencies in investigating and prosecuting the persons alleged to be involved in these crimes,”
BSP General Counsel Roberto Figueroa said.
“We are also keen to leverage this authority to uphold the integrity of our financial system against criminal actors.”
The BSP was instrumental in the passage of AFASA, which grants it authority to investigate and access bank accounts linked to prohibited activities under the law.
AFASA provides that the secrecy of deposits and data privacy provisions shall not apply to financial accounts subject to investigation by the BSP.
Information obtained from bank accounts may be used in the prosecution or investigation of AFASA-related offences.
Penalties for money muling under Section 4(a) include imprisonment of six to eight years and/or fines ranging from PHP100,000 to PHP500,000.
A conviction may also entail civil liabilities such as restitution of damages or unwarranted benefits.
Assets used in connection with prohibited acts may be subject to civil forfeiture, in accordance with Supreme Court rules.
The BSP’s action comes alongside a freeze order issued by the Court of Appeals on Tuesday (September 16) against the bank accounts in question, following a petition by the Anti-Money Laundering Council (AMLC).
Money laundering involves disguising illicit funds to make them appear to have come from legitimate sources, often through property transactions, luxury goods, gambling or other channels, before reintroducing them into the economy as lawful assets.
Featured image credit: Edited by Fintech News Philippines, based on image by EyeEm via Freepik
