Banking in the Philippines

At this point, you might have heard about the Philippines as an unusual but not necessarily offshore banking jurisdiction.

I have contemplated doing a Jurisdiction Spotlight about the Philippines and while there may be enough to say about incorporation and residence in the Philippines, I thought banking deserves its own article to begin with, especially since it’s such a large topic to go through. At some point in the future, I may return to this jurisdiction and explore its other aspects.


This is important because it sets the scene for the famous banking laws.

PHAlthough possibly inhabited as early as 65,000 BC, the Philippines enters recorded history around the 8th century with the arrival of Chinese explorers. Regional trade grew quickly and by the 14th century, the first Arabs started reached the Philippines

In 1521, Magellan arrived to the Philippines. Spanish conquistadors shortly thereafter claimed the islands as their own and became a part of Vicerolyalty of New Spain (Virreynato de Nueva España), which today is Mexico and large amounts of surrounding areas in the US and Central America.

In the late 1800s, disdain for its Spanish rulers grew among the Philippine population and in 1896, a revolution broke out. This joined by the Spanish-American war of 1898 and then the American-Philippine war of 1899-1902 (although fighting continued for another decade) led to the the Philippines’ independence from Spain and move towards extremely close ties with the US.

The Philippines became a part of the US Commonwealth until the end of the second world war when the Philippines gained full independence. After three centuries of Spanish rule followed by half a century of various forms of unrest or semi-subservience, what followed was the Third Republic of the Philippines.

The regime of the third republic struggled to keep the internally conflicted islands nation calm. Corruption and bribery ran rampant. The government passed a very convenient law: Republic Act No. 1405, “An Act Prohibiting Disclosure of or Inquiry Into Deposits, with any Banking Institution, and Providing Penalty Therefor”.

In a largely unbanked country, this law provided exceptional secrecy to the corrupt politicians.

In 1965, the Philippines voted for Ferdinand Marcos as their new president and a military dictatorship was born.

The context for the Philippine banking system starts with this era. Ferdinand Marcos had just been elected president of the Philippines. He took immediate rapid actions against corruption, bribery, and embezzlement.

Toward the end of his term, Marcos enacted martial law to remain in power. His regime became brutal and human rights and freedom of speech were severely hampered.

In 1983, Marcos had his opposition assassinated which triggered tremendous civil unrest, ultimately leading to an election in 1986 which Marcos won. The election was seen as fraudulent and the dictator and his allies fled to Hawaii.

Since 1986, the Philippines has been a moderately stable country. It struggles with severe weather, extreme poverty in some areas, enormous inequality and income gap, and an Islamic guerilla called Moro Islamic Liberation Front in Mindanao in the south.

The population is still largely unbanked and wast amount of Filipinos leave the country to work elsewhere. To send money back home, they mostly do not use banking since their friends and family back home often do not have bank accounts or simply don’t trust the banks. Money remittance services account for the vast majority of transfers coming into the Philippines.

Republic Act No. 1405

An Act Prohibiting Disclosure of or Inquiry Into Deposits, with any Banking Institution, and Providing Penalty Therefor.

The act reads:



Section 1. It is hereby declared to be the policy of the Government to give encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country.

Section 2. 1 All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.

Section 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information concerning said deposits.

Section 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and Regulations which are inconsistent with the provisions of this Act are hereby repealed.

Section 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.

Section 6. This Act shall take effect upon its approval.

Approved: September 9, 1955


I’m not a substitute for a Philippine lawyer but in essence, what it comes down to is this.

Section 1 lays out the (stated/alleged) purpose of the law, which is to encourage the Philippine population to bank more.

Section 2 assures secrecy for anyone except for cases of impeachment or by court order for cases of bribery, embezzlement, or local law litigation. (Money laundering has since been added to this list as an exception, but the application of this exception has been spotty at best.)

Section 3 prohibits unauthorised disclosure.

Section 4 is interesting in that this law takes priority over practically every other law.

Section 5 stipulates the penalties for violating the law: up to five years in prison or a fine of 25,000 PHP.

Republic Act No. 6426

This law is also very important for this context. It was created by the Marcos regime to ensure (to this day) absolute secrecy of their foreign-currency deposits.

It reads:

Section 1. Title.– This act shall be known as the “Foreign Currency Deposit Act of the Philippines.”

Section 2. Authority to deposit foreign currencies. – Any person, natural or juridical, may, in accordance with the provisions of this Act, deposit with such Philippine banks in good standing, as may, upon application, be designated by the Central Bank for the purpose, foreign currencies which are acceptable as part of the international reserve, except those which are required by the Central Bank to be surrendered in accordance with the provisions of Republic Act Numbered two hundred sixty-five (Now Rep. Act No. 7653).

Section 3. Authority of banks to accept foreign currency deposits. – The banks designated by the Central Bank under Section two hereof shall have the authority:


(1) To accept deposits and to accept foreign currencies in trust Provided, That numbered accounts for recording and servicing of said deposits shall be allowed;

(2) To issue certificates to evidence such deposits;

(3) To discount said certificates;

(4) To accept said deposits as collateral for loans subject to such rules and regulations as may be promulgated by the Central Bank from time to time; and

(5) To pay interest in foreign currency on such deposits.


Section 4. Foreign currency cover requirements. – Except as the Monetary Board may otherwise prescribe or allow, the depository banks shall maintain at all times a one hundred percent foreign currency cover for their liabilities, of which cover at least fifteen percent shall be in the form of foreign currency deposit with the Central Bank, and the balance in the form of foreign currency loans or securities, which loans or securities shall be of short term maturities and readily marketable. Such foreign currency loans may include loans to domestic enterprises which are export-oriented or registered with the Board of Investments, subject to the limitations to be prescribed by the Monetary Board on such loans. Except as the Monetary Board may otherwise prescribe or allow, the foreign currency cover shall be in the same currency as that of the corresponding foreign currency deposit liability. The Central Bank may pay interest on the foreign currency deposit, and if requested shall exchange the foreign currency notes and coins into foreign currency instruments drawn on its depository banks. (As amended by PD No. 1453, June 11, 1978.)

Depository banks which, on account of networth, resources, past performance, or other pertinent criteria, have been qualified by the Monetary Board to function under an expanded foreign currency deposit system, shall be exempt from the requirements in the preceding paragraph of maintaining fifteen percent (15%) of the cover in the form of foreign currency deposit with the Central Bank. Subject to prior Central Bank approval when required by Central Bank regulations, said depository banks may extend foreign currency loans to any domestic enterprise, without the limitations prescribed in the preceding paragraph regarding maturity and marketability, and such loans shall be eligible for purposes of the 100% foreign currency cover prescribed in the preceding paragraph. (As added by PD No. 1035.)

Section 5. Withdrawability and transferability of deposits. – There shall be no restriction on the withdrawal by the depositor of his deposit or on the transferability of the same abroad except those arising from the contract between the depositor and the bank.

Section 6. Tax exemption. – All foreign currency deposits made under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, including interest and all other income or earnings of such deposits, are hereby exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by residents or nonresidents so long as the deposits are eligible or allowed under aforementioned laws and, in the case of nonresidents, irrespective of whether or not they are engaged in trade or business in the Philippines. (As amended by PD No. 1246, prom. Nov. 21, 1977.)

Section 7. Rules and regulations. – The Monetary Board of the Central Bank shall promulgate such rules and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the publications in the Official Gazette and in a newspaper of national circulation for at least once a week for three consecutive weeks. In case the Central Bank promulgates new rules and regulations decreasing the rights of depositors, rules and regulations at the time the deposit was made shall govern.

Section 8. Secrecy of foreign currency deposits. – All foreign currency deposits authorized under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private; Provided, however, That said foreign currency deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)

Section 9. Deposit insurance coverage. – The deposits under this Act shall be insured under the provisions of Republic Act No. 3591, as amended (Philippine Deposit Insurance Corporation), as well as its implementing rules and regulations: Provided, That insurance payment shall be in the same currency in which the insured deposits are denominated.

Section 10. Penal provisions. – Any willful violation of this Act or any regulation duly promulgated by the Monetary Board pursuant hereto shall subject the offender upon conviction to an imprisonment of not less than one year nor more than five years or a fine of not less than five thousand pesos nor more than twenty-five thousand pesos, or both such fine and imprisonment at the discretion of the court.

Section 11. Separability clause. – The provisions of this Act are hereby declared to be separable and in the event one or more of such provisions are held unconstitutional, the validity of other provisions shall not be affected thereby.

Section 12. Repealing clause. – All acts, executive orders, rules and regulations, or parts thereof, which are inconsistent with any provisions of this Act are hereby repealed, amended or modified accordingly, without prejudice, however, to deposits made thereunder.

Section 12-A. Amendatory enactments and regulations. – In the event a new enactment or regulation is issued decreasing the rights hereunder granted, such new enactment or regulation shall not apply to foreign currency deposits already made or existing at the time of issuance of such new enactment or regulation, but such new enactment or regulation shall apply only to foreign currency deposits made after its issuance. (As added by PD No. 1246, prom. Nov. 21, 1977.)

Section 13. Effectivity. – This Act shall take effect upon its approval.

Approved, April 4, 1974


This law coupled with Republic Act of 1405 create an essentially impenetrable banking secrecy for foreign currency deposits held in the Philippines.

Foreign currency deposits are practically out of jurisdiction of local courts, unless the Anti-Money Laundering Council steps.

AML and Compliance

The Philippines have an anti-money laundering (AML) legislation with tremendous gaps, one being that it does not cover the nation’s casinos.

This oversight combined with the ironclad banking secrecy and generally lax paperwork for opening a bank account, the Philippines have been criticized for its nonchalance to financial crimes.

There’s a very good reason why the recent attempted and partly successful heist of foreign currency against the Bangladesh Central Bank used destination accounts in the Philippines. Once in the Philippines, the money would be very, very difficult to trace, let alone freeze or identify the owners of.

Although for a case of this particular magnitude, international and political prestige may take over and force the government to use one of few merchanisms in place to place to pierce the banking secrecy.

FATF has issued criticism against the Philippines, as has the OECD which has given the Philippines a rating of  Largely Compliant for being overly secretive for corporations but nonetheless voiced some concern surrounding banking. However, OECD notes that the Philippines were able to respond to all 12 EOIs it received during a three-year period.

On November 28, 2010, the organization WikiLeaks published diplomatic cables (private and secret diplomatic messages) to and from US embassies and consulates. In some of these cables, the Philippine banking secrecy is criticized for hindering investigations into, amongst others, corrupt politicians.

Nonetheless, the Philippines is not a top priority on anyone’s financial crimes to-do list at the moment. While large-scale money laundering likely takes place, investigating is practically pointless. The aforementioned 81 million dollar theft has again ignited discussions in the Philippines about weakening the banking secrecy and strengthening the anti-money laundering law.

What actually comes from it remains to be seen.

Opening a Bank Account in The Philippines

So you want to open a bank account in the Philippines to stash your stolen and/or untaxed money life savings and Ebay income?

First of all – set all your usual expectations aside. This is a very different experience.

It can be very difficult to open a bank account in The Philippines.

The paperwork part isn’t all that hard. Most are happy with just a passport to open a personal account and basic corporate documents for foreign companies. Asian companies are preferred because of familiarity, with British overseas territories also being tolerated.

Minimum deposit usually stands at a few hundred thousand to a million PHP equivalent, where as of writing 100,000 PHP is about 1,900 EUR, 2,150 USD, or 1,500 GBP. Not exactly an insurmountable sum of money.

What’s difficult is establishing a personal relationship and repertoire with a bank for them to trust you. Not a lot of foreigners come to the Philippines to bank. Remember, over 15% of Filipinos don’t bank in the Philippines. Foreigners banking here is a bit of an oddity.

The best way to successfully to about applying for a bank account in The Philippines is to reach out to as many banks as possible prior to going to the Philippines (this isn’t going to happen remotely) and exchange a couple of emails or phone calls.


Banks in the Philippines

Few jurisdictions have as many banks and bank-like financial institutions as the Philippines. The Bangko Sentral ng Pilipinas (BSP) lists hundreds of institutes. Most of them are so-called thrift banks, cooperative banks, or rural banks. These banks often have very little (if any) online presence and serve mostly local and rural clients. Their licenses are very limited.
The main banks are instead called universal and commercial banks. A commercial bank is what most readers will expect a bank to be and be able to do, whereas a universal bank can offer all the same services and engage in some more strictly regulated investments.There is also an OBU (Offshore Banking Unit), which is subject to on the one hand more lenient regulations to establish themselves but far more stringent rules on how and with whom they can trade. There are three banks in this category. They most likely are not relevant for this context but are listed below anyway.

Below is a list of all the universal and commercial in the Philippines. All in all, there are 41 including branches of foreign banks (plus the three OBU banks). Ones marked in bold are banks which based on experience or reliable second-hand information have opened accounts for visiting non-resident foreigners.

Universal Banks

  • Al-Amanah Islamic Investment Bank of the Philippines
  • ANZ Banking Group Ltd.
  • Asia United Bank Corporation
  • Bank of the Philippine Islands
  • BDO Unibank, Inc.
  • China Banking Corporation
  • Deutsche Bank AG
  • Development Bank of the Philippines
  • East West Banking Corporation
  • ING Bank N.V.
  • Land Bank of the Philippines
  • Metropolitan Bank & Trust Company
  • Mizuho Bank, Ltd. – Manila Branch
  • Philippine National Bank
  • Philippine Trust Company
  • Rizal Commercial Banking Corporation
  • Security Bank Corporation
  • Standard Chartered Bank
  • The Hongkong & Shanghai Banking Corporation (HSBC)
  • Union Bank of the Philippines
  • United Coconut Planters Bank

Commercial Banks

  • Bangkok Bank Public Co. Ltd.
  • Bank of America, N.A.
  • Bank of China Limited-Manila Branch
  • Bank of Commerce
  • BDO Private Bank, Inc.
  • Cathay United Bank Co., LTD. – Manila Branch
  • Citibank, N.A.
  • CTBC Bank (Philippines) Corporation
  • Industrial Bank of Korea Manila Branch
  • JP Morgan Chase Bank, N.A.
  • Korea Exchange Bank
  • Maybank Philippines, Inc.
  • Mega International Commercial Bank Co., Ltd.
  • Philippine Bank of Communications
  • Shinhan Bank – Manila Branch
  • Sumitomo Mitsui Banking Corporation-Manila Branch
  • Philippine Veterans Bank
  • Robinsons Bank Corporation
  • The Bank of Tokyo-Mitsubishi UFJ, Ltd.
  • United Overseas Bank Limited, Manila Branch

Offshore Unit Banks

  • BNP Paribas
  • J.P. Morgan International Finance, Limited
  • Taiwan Cooperative Bank

Banking Services

With a population that only recently has started to embrace banking fully, banking services are lagging behind more banking-centric nations.

Those seeking to invest in the Philippines may very likely find it is easier to do through a bank or broker elsewhere.

However, the people who are moving away towards banks are expecting services in line with what money remittance companies such as Transfast, Xoom, and Remitly, and others are offering in terms of mobile apps. A tremendous amount of Filipinos work abroad and send money back using these services, with the recipient either picking the money up in cash or having it deposited into their bank account.

USD and even EUR accounts can be opened with many banks and some – such as BDO – are offering cards denominated in USD.


One of the financial criminal’s finest choices today, the Philippines offers an outdated and outmoded banking secrecy law that – from time to time – gets put into question but not much is done about it other than the bare minimum to be in line with global compliance standards, at least on paper.

Opening a bank account can be challenging and time consuming, especially considering that a visit is required in 99.99% of all cases. The banking services are not up to par with banks in jurisdictions with more well-developed banking sectors, i.e. Hong Kong, Singapore, and most of Europe.

2 Comments on "Banking in the Philippines"

  1. Hi, a small corrrection:

    Minimum deposit usually stands at a few hundred thousand to a million PHP equivalent, where as of writing 1 million PHP is about 1,900 EUR, 2,150 USD, or 1,500 GBP. Not exactly an insurmountable sum of money.

    1M PHP ~ 20k USD

    Streber, has the Philippines made any adjustments since the Bangladesh heist?

    • Thanks! Good catch. I’ll update the article. Missed a zero there somewhere.

      From what I’ve seen, not a whole lot has changed in the Philippines since the Bangladesh heist. Due diligence has tightened somewhat for foreign and non-resident clients but it’s still fairly easy-going. I have seen a few more questions about proof of source of wealth/income than before but it’s been for fairly large sums where such requests aren’t uncommon anyway.

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