PH Senate Launches Investigation into Banks’ Suspicious POGO Transactions

In a significant development, the Philippine Senate has initiated an investigation into the unexplained oversight by local banks concerning suspicious transactions linked to Philippine Offshore Gaming Operators (POGO). This move comes on the heels of revelations related to former Bamban, Tarlac Mayor Alice Guo’s financial activities.

The probe, proposed through Senate Resolution 1193 authored by Senator Sherwin Gatchalian, emphasizes the alarming failure of banks to identify and report dubious transactions potentially tied to criminal enterprises. Gatchalian’s concerns were amplified by the case of transactions involving firms associated with Alice Guo, which totaled hundreds of millions of pesos—amounts purportedly used to establish a POGO hub in Bamban. The intriguing aspect of these dealings was their magnitude, starkly contrasting with the modest financial disclosures of the companies involved.

What stands out is the timing and scale of these transactions. At the height of the global COVID-19 pandemic in 2020, when economic activities were largely disrupted, Guo’s accounts saw a dramatic surge in cash flows, checks, and other financial transactions. Yet, local banks did not alert authorities about these anomalies, raising questions about the robustness of their internal controls.

Senator Gatchalian has voiced concerns over the current Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) framework, pointing to its inadequacies in preventing money laundering activities. Moreover, the senator highlighted that the Philippines remains on the Financial Action Task Force (FATF) grey list, a placement that underscores deficiencies in the nation’s anti-money laundering efforts. The senator’s call to action urges financial institutions to bolster their compliance mechanisms, ensuring that suspicious transactions are promptly reported to hinder money laundering efforts.

Adding to the urgency, President Ferdinand Marcos Jr. has urged government bodies to undertake necessary reforms to help the country exit the FATF grey list by 2025. Gatchalian underlined the importance of private sector compliance, stressing that financial entities must enhance their diligence by adhering to reporting obligations for suspicious and covered transactions.

This ongoing investigation not only sheds light on potential banking system loopholes but also underscores the broader implications for the country’s financial security and international standing. As this scrutiny unfolds, it flags a critical period for policymakers and financial institutions in the Philippines, prompting heightened vigilance and reforms within the financial sector.