"The first effort is to try to convince Congress to make the necessary amendments before the actual day of the sanctions," said Finance Secretary Jose Isidro Camacho.
Speaker Jose De Venecia proposed a meeting between President Arroyo and the leaders of both chambers of Congress to agree on a legislative-executive action plan to avert sanctions by the Financial Action Task Force (FATF), which rejected on Friday the bill amending the country’s anti-money laundering law.
"We are proposing an emergency meeting among President Arroyo, the Senate president, the two chairmen of the House and Senate committees on banks and intermediaries and the Senate and House minority leaders to agree on a legislative action plan," De Venecia said in a statement.
He said that the House will begin next week to draft new changes to the Senate-House approved amendments to the AMLA.
De Venecia appealed to the Senate to adhere to the House version of the amendatory bill, which he said was accepted by the US government, particularly US President George Bush who described it as "superior" and "acceptable" when he phoned Mrs. Arroyo early this week.
"We hope to prevent sanction that will prejudice some five million overseas Filipinos remitting $8 billion a year to about 25 million members of their families, the country’s exporters, and the large workforce who will be prejudiced by delays in their financial transactions," he said.
Presidential Spokesman Ignacio Bunye also appealed to legislators to reconsider their "strong positions" against the recommendations of the global financial watchdog, saying that they should have in mind the welfare of the country’s seven million overseas Filipino workers, who will bear the brunt of the FATF sanctions.
Presidential Legislative Liaison Office (PLLO) Secretary Gabriel Claudio, on the other hand, said that the government is also doing everything it can to get the FATF to be as liberal and as understanding of the Philippine situation and perspectives as possible.
He particularly cited the efforts of the Anti-Money Laundering Council (AMLC) to engage in diplomatic initiatives by Philippine embassies in FATF-member countries like the US to support the country’s appeals against the imposition of counter-measures.
He added that Camacho and Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura have been closely coordinating with Executive Secretary Alberto Romulo to block the FATF from imposing the sanctions.
At the Senate, however, Senator Aquilino Pimentel, Jr. assailed what he described as President Arroyo’s "subservience to the FATF and its lack of respect to the independence of the legislative branch of government".
Pimentel said that it is ridiculous that the FATF rejected the amendments to the AMLA even before it could officially receive the bill that was approved by Congress.
"How could the FATF thumb down the amendments at a time when the bill has not been officially transmitted to the FATF board of directors? That’s fantastic. In fact, FATF’s rejection came even before President Arroyo could act on the bill," he said.
While the final version of the bill ratified by Congress on Thursday lowered the threshold for bank transactions to be investigated from P4 million to P540,000 ($10,000) according to FATF requirements, it retained a provision that a court order is necessary before a suspected bank account can be investigated, which the FATF opposes.
Pimentel said that it is not fair for FATF to reject the amendments just because it fell short of their criteria, citing that 21 other countries belonging to FATF do not prescribe any threshold amount.
In its latest advisory, the FATF indicated that restricting the flow of OFW remittances through the formal banking system was not the end of its crackdown. What it intended next to address is the loopholes in the informal fund remittance system or the "door-to-door" practice.
Dollar remittances going through the informal system has caught the attention of the FATF, which suspected the channel of being one of the conduits of dirty money flowing throughout the global terrorist network and funding various terrorism activities.
In the spate of investigations that followed the destruction of the World Trade Center in 2001, several large NGOs have been linked to known terrorist groups.
The FATF met in Paris this week to discuss what it called "emerging threats", specifically problems related to terrorist financing schemes through non-profit organizations.
According to the FATF, there was an emerging pattern of misuse of non-profit organizations as well as informal fund transfer systems such as the hawala, hundu, fei-chien and the black market peso exchange.
This move could have serious implications for the Philippines as every year about $6 billion is remitted into the country by some 4.5 million OFWs working mostly in the Middle East, Asia and Europe. This year, remittances were estimated to hit a record high of $8 billion as the number f OFWs deployed abroad increased by 4.5 percent.
The Bangko Sentral earlier reported that over 90 percent of the annual remittances go through the banking system and only a small fraction go through door-to-door couriers.
During its meeting with US finance officials last year, the Philippines was already told to start drawing up a mechanism that would monitor the inflow of OFW dollars into the country, specifically those going through couriers instead of the banking system.
At first, the FATF had been conciliatory, asking the Philippines to make recommendations on how to regulate the informal remittance network since the country had extensive experience in this area.
However, since the Philippines is now subject to FAFT’s counter-measures, the international body is expected to adopt a hardline policy and demand compliance instead of assistance. — With reports from Des Ferriols, Jose Rodel Clapano, Perseus Echeminada, AFP