Don't use pirated computer products, BSP tells banks

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has urged banks and other institutions to use geuine computer products to protect the integrity of the country’s financial system and at the same time safeguard the deposits and investments of their clients.

BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum M 2011- 006 reminding all institutions supervised by the central bank against the use of pirated products.

“Pirated software could be injected with malicious code infecting system files and other critical parts of the computer system,” Espenilla warned. 

He pointed out that perpetrators could gain access to the system by capturing critical information such as passwords, account details, and other sensitive data.

He added that BSP-supervised institutions caught using pirated computer products could be sued.

“Moreover, institutions found to be using unauthorized products by original owners may be exposed to reputational and legal risks in case actions are taken against them,” Espenilla said.

The BSP official said all banking institutions should strengthen their risk management processes by having a policy against the use of unauthorized products, procedures to prevent its implementation, and a monitoring system to ensure that only authorized products are installed and used.

Latest data from the BSP showed that the number of banks operating in the Philippines were reduced by 33 in the first nine months of last year on the back of the continued consolidation of major players in the industry as well as the closure of problematic banks.

The number of banks stood at 764 as of end-September last year from 797 as of end-September in 2009 and nine banks fewer that the end-June number of 773.

Data showed that the number of universal and commercial banks was steady at 38 while the number of thrift banks was also unchanged at 73. However, the number of rural banks fell to 661 from 653 due primarily to the closure of weaker banks.

The BSP reported that the number of branches of universal and commercial banks, thrift banks, and rural banks increased by 176 to 8,740 in the first nine months of last year from 8,564 in the same period in 2009.

Monetary authorities believed that 2010 was a banner year for Philippine banks contributing largely to the country’s stronger-than-expected economic growth amid the fragile recovery in advanced economies led by the US as well as the debt crisis in Europe.

The Philippines has been in the ordinary watchlist category of intellectual property rights (IPR) violators of the Office of the US Trade Representative (USTR) for the past few years.

In fact, the US-based piracy watchdog Intellectual Property Alliance (IIPA) has renewed its call to raise the Philippines to its priority watchlist because of “continuing and mounting” problems of piracy.

The IIPA said the Philippine government has been cooperative in the campaign against computer software piracy but problems are mounting in other sectors.

The key problems, it said, are the lack of implementation of the new anti-camcording law, lack of political willingness at the highest levels to take steps to eradicate Internet infringements, lack of adequate funding for the activities of the Optical Media Board, and the unwillingness of any agency to take ownership over growing Internet piracy.