Philippines to Hold Banks `Accountable' for Role in Cyber Heist

  • Theft of $81 Million of Bangladeshi reserves is under inquiry
  • Banks remiss in duties will be held responsible, official says

Nestor Espenilla.

Photographer: Veejay Villafranca/Bloomberg

The Philippines will hold accountable any bank or banker found responsible or remiss in their duties in the $81 million cyber heist of Bangladeshi foreign reserves that wound up in the Southeast Asian nation’s financial system, officials said.

QuickTake Cybersecurity

“You can be assured that banks that fail to perform their responsibilities will be held accountable,” Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla, who heads the central bank’s supervision and examination division, said Saturday in reply to a text message.

Philippine lawmakers last week started an investigation into how the stolen funds ended up in Rizal Commercial Banking Corp., wired to remittance company Philrem Service Corp., and transferred to casinos. Senator Teofisto Guingona, who’s leading the inquiry, said the theft could threaten the wider financial sector in the Philippines and put the country’s credit rating at risk.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said March 18 he sees “risk associated” with the incident and the nation has “to show that action has been taken.” Bank officials found to be involved in the money-laundering case will be held accountable, Communications Undersecretary Manolo Quezon also said on Saturday in a briefing on government radio.

Regulatory Issues

The Philippines banking regulatory framework is already strong and the remedy isn’t necessarily more regulations, Espenilla said. Strict deposit secrecy law, inadequate protection of bank examiners and delays in the judiciary are among the challenges banking regulators face in enforcing effective compliance, he said.

President Benigno Aquino will wait for recommendations from the Bangko Sentral ng Pilipinas on the easing of the bank secrecy law, Quezon said.

Senate hearings on the heist focused on testimony by Maia Santos Deguito, the manager of the Rizal Bank branch from which the money was withdrawn, who agreed to a tell-all in a in closed-door session with lawmakers last week. Rizal Bank President Lorenzo Tan, who has denied Deguito’s claims, invoked the law on bank secrecy during the Senate hearing.

The case is an isolated one and has nothing to do with the bank’s strength and stability, Rizal Bank said in the statement on Friday. “RCBC follows global best practices but even the most stringent rules and restrictions are only as good as the people who must follow them.”

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