TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
-7 P2:00
S. No.
SENATE
232
Introduced by Senator Francis G. Escudero
AN ACT
MANDATING GOVERNMENT OFFICIALS AND EMPLOYEES TO EXECUTE AND 
SUBMIT A WRITTEN PERMISSION TO EXAMINE, INQUIRE OR LOOK INTO 
ALL THEIR DEPOSITS AND INVESTMENTS THEREBY WAIVING THE BANK 
SECRECY LAW AS PROVIDED FOR UNDER REPUBLIC ACT NUMBERS 1405 
AND 6426
EXPLANATORY NOTE
Republic Act (RA) No. 1405 or the Bank Secrecy Law was enacted in 1955 to 
encourage people to deposit their money in banking institutions and to discourage 
private hoarding. It was a policy meant to benefit economic development.
Adhering to the same policy of secrecy of bank deposits, it became more 
stringent in 1974 when RA No. 6426 was passed but this time for foreign currency 
deposits.
The exceptions from the secrecy of bank deposits are quite limited and 
exclusive. Currently, RA 1405 admits four (4) exceptions while RA 6426 admits only 
one (1), which essentially treats foreign currency deposits with absolute 
confidentiality.
The policy intent is quite tenable given that the above laws on bank deposits 
have passed the test of time and remained unchanged. However, such intent has its 
own unintended consequences - this is when banks are used as institutions to hide 
illegal wealth, fund illegal activities, launder money, evade taxes and commit other 
financial crimes under the mantle of a statutorily mandated secrecy. It is for this 
reason that all countries now, except the Philippines, have lifted the secrecy of bank 
deposits.


Given the policy direction toward the iifting of the secrecy of bank deposits to 
address the commission of financiai crimes, it is submitted that the government should 
spearhead the move by mandating its officials and employees to waive the secrecy of 
bank deposits as provided by law. Moreover, in doing so, the government could 
effectively mitigate, if not resoive, the probiem of graft and corruption in government.
Verily, any person who has nothing to hide in secret would only welcome this 
proposai in the name of transparency and accountability.
Respectfully submitted.
FRAN
CUDERO


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL-7 P 2 ;()0
SENATE
S. No. 232
Introduced by Senator Francis G. Escudero
AN ACT
MANDATING GOVERNMENT OFFICIALS AND EMPLOYEES TO EXECUTE AND 
SUBMIT A WRITTEN PERMISSION TO EXAMINE, INQUIRE OR LOOK INTO 
ALL THEIR DEPOSITS AND INVESTMENTS THEREBY WAIVING THE BANK 
SECRECY LAW AS PROVIDED FOR UNDER REPUBLIC ACT NUMBERS 1405 
AND 6426
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assemble
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Section 1. Declaration of Policy. - It is hereby declared the policy of the State
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for all public officials and employees to be open and transparent in all their financial
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transactions and dealings.
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Sec. 2. Submission of Written Permission or Waiver. - All public officials and
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employees as defined under paragraph (b) in relation to paragraph (a), Section 3 of
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Republic Act No. 6713, except those who serve in an honorary capacity, shall submit
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to the Office of the Ombudsman a written permission or waiver in favor of the
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Ombudsman to examine, inquire and look into all their deposits, including foreign
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currency deposits, in banks and other financial institutions, both in and outside the
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Philippines, including investment bonds issued by the government of the Philippines,
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its political subdivisions and instrumentalities.
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The aforestated written permission or waiver shall be submitted within thirty
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(30) days from the date of their assumption of office: Provided, however, That public
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officials and employees who are already exercising the functions of their respective


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offices upon the effectivity of this Act shali submit the same not later than thirty (30) 
days from the effectivity of the Ruies and Regulations implementing this Act.
Sec. 3. Failure or Refusal to Submit Written Permission or Waiver. - Any public 
official or employee who fails or refuses to submit such written permission or waiver 
as mandated by this Act shail not be ailowed to enter upon, or continue exercising the 
functions of, his or her office.
Sec. 4. Limitation on Use. - Only the Office of the Ombudsman shaii obtain or 
use the written permission or waiver, or any other information or data obtained by 
virtue thereof: Provided, however, That the same shall be used exclusively for 
investigating a duly verified complaint or for prosecuting a case before the courts: 
Provided, further. That the written permission or waiver shall not be used for any 
other purpose.
Sec. 5. Lead Agency. - The Office of the Ombudsman shall have the primary 
responsibility to implement this Act: Provided, however. That it shall enlist the advice 
of the Department of Justice and the Bangko Sentral ng Pilipinas in the drafting of the 
written permission or waiver as provided in this Act.
Sec. 6. Separability Clause. - If any provision or part hereof is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall 
remain in full force and effect.
Sec. 7. Repealing Clause. - All laws, acts, decrees, executive orders, issuances, 
and rules and regulations or parts thereof which are contrary to and inconsistent with 
this Act are hereby repealed, amended or modified accordingly.
Sec. 8. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the OfficialGazetteox at least two (2) newspapers of general circulation.
Approved,