The Bankers Association of the Philippines, the organization of universal and commercial banks in the country, said the domestic financial system remains strong amid the Wirecard controversy but asked the public to be very careful in receiving certifications and documents from third parties by having them validated by the issuing bank.
“The BAP assures the public that the country’s financial system is sound and that very strict rules regarding the issuance of bank certifications are in place,” the group said in a statement Tuesday.
It said some individuals might try to forge or falsify these documents, but their authenticity could be readily ascertained through careful scrutiny or verification by the appropriate institutions.
“We encourage the public to practice due diligence in receiving certifications and documents from third parties by having them validated by the issuing bank,” it said.
BAP said it was working closely with the Bangko Sentral ng Pilipinas and other government agencies to improve their processes and that member banks were regularly and proactively strengthening security checks and systems to ensure integrity at every level.
Earlier wire reports said the chief executive of Wirecard resigned June 19 after 1.9 billion euros ($3 billion) went missing from its accounts, “sending its shares into a tailspin and putting a question mark over the company’s future.”
Reports said Markus Braun, who built the German company into one of the hottest investments in Europe, left Wirecard facing a looming cash crunch amid allegations of fraud over the missing money, “which has hit a dead end in the Philippines.”
BSP Governor Benjamin Diokno earlier said none of the missing $2.1 billion of German payments company Wirecard entered the domestic financial system. Diokno said the international financial scandal used the names of two of the country’s biggest banks—BDO Unibank Inc. and Bank of the Philippine Islands—in an attempt to cover the perpetrators’ track.
Both BDO and BPI stated that the German firm was not their client nor did they have any business relationship with the firm.
“The initial report is that no money entered the Philippines and that there is no loss to both banks,” Diokno said.
Reports said concerned authorities were investigating the local business partners of Wirecard, the result of which could unravel the full extent of the country’s exposure to the scandal.
The Financial Times’ earlier report said the probe could include firms such as PayEasy Solutions, Centurion Online Payment International and ConePay International.
When sought for comment by Manila Standard on updates on these investigations, Anti-Money Laundering Council executive director Atty. Mel Georgie Racela said, “AMLC cannot provide more details than we have already mentioned in the media because the investigation is still on-going.”
Diokno said the local banking system remained in a strong position. He said the banking system was well capitalized as its capital adequacy ratio of 16 percent is well above the minimum threshold set by the Bangko Sentral at 10 percent and the Bank for International Settlements at 8 percent.
Loan quality remained satisfactory amid continued loan growth. The non-performing loan ratio was manageable at 2.3 percent as of end-April, slightly higher than the 2.1 percent as of end April 2019.
The Japan Credit Rating Agency upgraded its rating on the Philippines from “BBB+” to “A-“ with a stable outlook last month as it believes the country can withstand the impact of the pandemic. It also underscored the strength of the banking system for the stable outlook.
