BSP uses new AFASA law in corruption probe

The Bangko Sentral ng Pilipinas (BSP) is using the newly enacted Anti-Financial Account Scamming Act (AFASA) to investigate individuals linked to a high-profile flood-control corruption controversy.

The investigation targets suspected “Money Muling Activities” under Republic Act No. 12010, which took effect in June 2025.

Under Section 4(a) of AFASA, money muling refers to the use of a financial account to obtain, receive, deposit, transfer, or withdraw proceeds known to be derived from criminal activities.

BSP launched the inquiry following a formal request from Department of Public Works and Highways (DPWH) Secretary Vince Dizon filed on Monday.

In response, BSP reminded all covered institutions to observe the provisions on temporary fund holds under Section 7 of AFASA, as laid out in BSP Circular No. 1215, series of 2025.

“The BSP is using AFASA for the first time to join and assist other agencies in investigating and prosecuting the persons alleged to be involved in these crimes,” BSP General Counsel Roberto Figueroa said.

“We are also keen to leverage this authority to uphold the integrity of our financial system against criminal actors,” Figueroa added.

The law empowers the BSP to override bank secrecy and data privacy laws when investigating accounts suspected to be involved in financial scams or illicit transactions.

The AFASA allows the BSP to secure material information from financial accounts, which may be used as evidence in both investigations and criminal prosecutions.

Penalties for violating Section 4(a) of AFASA include imprisonment ranging from six to eight years and/or fines between PHP 100,000 and PHP 500,000.

In addition to criminal penalties, those found guilty face civil liabilities such as restitution for damages and the forfeiture of assets used in the illegal acts.

All non-liquid assets and properties linked to the offense are subject to civil forfeiture under Supreme Court rules.

This investigation comes alongside a freeze order issued by the Court of Appeals on Tuesday, based on a separate petition from the Anti-Money Laundering Council (AMLC).

The AMLC’s move aims to prevent the further dissipation of allegedly laundered funds while formal inquiries and criminal proceedings are ongoing.

Money laundering typically involves disguising the origins of illicit funds through layers of financial transactions, including real estate, luxury vehicles, gambling, and high-value art.

Once cleaned, the illicit funds are reintroduced into the financial system, posing a threat to economic stability and public trust.