BSP shocked by cash piles in flood control corruption

The Bangko Sentral ng Pilipinas (BSP) is tracing unusually large cash flows across the financial system as part of a widening probe into the multibillion-peso flood control scandal, but it assured the public that the banking sector remains strong and liquid.

- By KEISHA TA-ASAN

In an interview yesterday with “Thought Leaders” on One News, BSP Governor Eli Remolona Jr. said the scale of corruption and the sheer volume of cash involved stunned monetary regulators.

“It was worse than we thought... We knew there was corruption all along, but not on this scale,” he said, saying the scandal was “as much of a shock” to the central bank as it was to the public.

Remolona pointed to accounts of roughly a billion pesos being packed into suitcases and transported to private homes by car, with massive stacks of cash reportedly laid out on tables — scenes he described as startling.

“But we're working hard to fix things,” he said. “We want to make it more difficult for the contractors, for the guys involved in this flood control mess, before taking money out of the banks.”

The BSP chief, who also chairs the Anti-Money Laundering Council (AMLC), disclosed that regulators are “making a lot of inquiries” to identify big flows of cash or any financial transaction that looks unusual.

“So far we think more (funds) came from the government financial institutions and that makes sense because it’s government money,” he noted.

As of now, the AMLC has frozen over 700 accounts linked to the scheme, with more freeze orders expected in the coming months.

Remolona acknowledged the move could have some impact on liquidity, but stressed that banks remain well-capitalized and no bank runs are anticipated.