February 3, 2001, The Philippine Star, Editorial, A haven for dirty money,

February 3, 2001, The Philippine Star, Editorial, A haven for dirty money,

The criminal cases against ousted President Joseph Estrada are moving, and not at the usual glacial pace of the Philippine judicial system, thanks to tremendous public pressure. Several of the cases are related to alleged money laundering involving billions of pesos. Estrada's fall from grace and looming criminal prosecution should send a strong message to the international community that the Philippines does not look kindly on money laundering. 

Moves to go after dirty money amassed in the previous administration come just in time. This week the Philippines was again included among 15 nations blacklisted by industrialized countries for being havens of money laundering. Blacklisted together with the Philippines were the Bahamas, Cayman Islands, Cook Islands, Dominica, Israel, Lebanon, Liechtenstein, Marshall Islands, Nauru, Niue, Panama, Russia, St. Kitts and Nevis, and St. Vincent and the Grenadines. 

When the list was released last year by the Financial Action Task Force on Money Laundering, Philippine officials had protested the country's inclusion. There were also criticisms that other known havens of money laundering such as Switzerland were excluded from the list. In the latest report from Paris, the task force noted improvements since October in the Bahamas, Cayman Islands, Cook Islands, Israel, Liechtenstein, Marshall Islands and Panama but not in the Philippines. 

The country may protest its continued inclusion, but the best guarantee of being stricken off the blacklist is the implementation of reforms. Estrada's alleged multibillion-peso secret bank accounts, which prosecutors say he opened in the past two and a half years, show how easy it is to launder money in this country. The "Jose Velarde" accounts were opened with the apparent collusion of certain bank officials. Estrada was the one who got caught, although he insists he is innocent. How many other people maintain secret accounts in this country, hiding dirty money? 

Clearly, reforms are needed in the banking industry. Some changes can be implemented by monetary officials and by the banks themselves. Major reforms, however, will require legislation. These reforms should be given priority when the next Congress gets down to work.