anti-money laundering and combating the financing...

The Philippine ExperienceThe Philippine Experience

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) for Mobile Phone Financial Services (m-FS)

24-26 June 2008 Bangkok, Thailand

PDF created with pdfFactory Pro trial version www.pdffactory.com

http://www.pdffactory.com

AGENDA

ú Access to Financial Services

ú BSP Initiatives

ú m-FS in the Philippines

ú Key Areas of Concern

ú Other Issues



0

500

1,000

1,500

2,000

2,500

3,000

NCR

Region I

Region I

I

Region I

II

Region I

V-A

Region I

V-B

Region V

Region V

I

Region V

II

Region V

III

Region I

X

Region X

Region X

I

Region X

IICAR

ARMM

CARAGA

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Bank DensityBank Density

Access to Financial ServicesAccess to Financial Services



Overseas Filipino Workers (OFW)

About 10% of 89About 10% of 89million Filipinosmillion Filipinoswork abroadwork abroad

Remittance Remittance úú USD14.45 billion USD14.45 billion

(2007)(2007)úú USD16.4 billion USD16.4 billion

(2008 projection)(2008 projection)úú 10.0% of GDP10.0% of GDP

Access to Financial ServicesAccess to Financial Services



BSP InitiativesBSP Initiatives

§ Proactive role in development of microfinance in the banking sector

§ Promote efficiency in banking services through outsourcing and sharing of service

§ Respond positively to ICT Innovation

§ Liberalization of ID requirements



•Withdraw from ATMs

•Balance/Change MPin

•Purchase Goods/Services

•Buy Airtime load

•Transfer Funds

•Purchase Goods/Services

•Pay Bills

•Remote Purchase

•Lock/Unlock/Change Pin

mm--Financial ServicesFinancial Services



Bills Payment

Merchant Payments

Money Transfer

(P2P)

Remittances

ACCREDITED REMCOOUTLET

mm--Financial ServicesFinancial Services



Smart Money (BankSmart Money (Bank--based Model)based Model)



GG--Cash (Cash (NonbankNonbank--based Model)based Model)

You have received

P10,000.

You have received

P10,000.

Settlement Bank

GG--Cash Cash Encashment Encashment

CentersCentersMerchantsMerchants



CrossCross--Border RemittanceBorder Remittance

REMCO

Issuing Issuing

BankBank



Impact on Money SupplyImpact on Money Supply

Accredited Accredited Local OutletLocal Outlet(Encashment (Encashment

Center)Center)

REMCO You have received P10,000.

You have received P10,000.

MerchantMerchant

Settlement Bank



Distinct FeaturesDistinct Features

SMART Money G-Cash

Issuer partner banks GXI

Channels mobile phone and debit card mobile phone

Access to Records

SMART and partner banks GXI

Repository partner banks GXI

Float Management partner banks GXI

Settlement partner banks GXI Instruction



Key Areas of ConcernKey Areas of Concern§ Supervision over non-bank institutions

offering financial products

§ Prevention from money launderers and terrorist financing

§ Consumer protection

§ Risk Management



Policy & Regulatory EnvironmentPolicy & Regulatory Environment

§ Electronic Commerce Act (R.A. 8792)

§ The General Banking Law of 2000 (R.A. 8791)

§ The Anti-Money Laundering Act (R.A. 9160 and 9194)



Sec. X621 of Manual of Regulations for Banks (MORB) – Guidelines on Electronic Banking Services;

Sec. X169.2 of MORB – Outsourcing of information technology systems/processes;

Circular 471 – Requires registration of remittance agents

Addressing ConcernsAddressing Concerns



Registration Process:




Cash-In and Cash-Out




§§ Know Your CustomerKnow Your Customerúú Partner AccreditationPartner Accreditation Documentary requirements: business registration,

Secretary’s Certificate, etc. Partner Verification: Checking against OFAC list,

credit review checkingúú CashCash--In/CashIn/Cash--Out DocumentationOut Documentation Subscriber required to fill up registration form for

cash-in and acknowledgment form for cash-out Presentation of valid ID for every cash-in/cash-out

transactions Right to access partner’s records Data retention period of seven (7) years




Wallet Limits

Daily Limit – Php 40,000

Monthly Aggregate Limit – Php100,000.00


Current Exchange Rate: 45Php:1USD



• On-site supervision of BSP

• Access to e-money records by BSP and AMLC

• AML Monitoring System

• Reporting of CTR/STR





§ Safeguard customer information; § Prevent money laundering and terrorist

financing; § Reduce fraud and theft of sensitive

customer information; and § Promote legal enforceability of banks’

electronic agreements and transactions



Other Issues:Other Issues:

§ Accreditation of more remittance agents

§ Prudential requirements on e-money issuers and operators

§ Enactment of a Payment Systems Act



Raymond O. Estioko, CISA, CPA, MBA Manager, Core IT Specialist Group

[email protected]@bsp.gov.ph


mailto:[email protected]

mailto:[email protected]


anti-money laundering and combating the financing...

Documents