BSP doubles daily cash withdrawal cap to P1 million

THE BANGKO SENTRAL ng Pilipinas (BSP) has doubled the daily ceiling for cash withdrawals required to undergo enhanced due diligence (EDD) to P1 million as it found that a large volume of legitimate transactions exceed the previous cap.

In a circular issued on Feb. 27, the central bank raised the withdrawal limit from the P500,000 set in September last year.

“This is designed to focus on higher-risk activity while streamlining the process for legitimate and normal cash transactions, including recurring ones,” the BSP said in a statement on Tuesday.

“The increase follows consultations with banks and industries, which showed a large number of legitimate cash transactions above the original threshold,” it added. “These covered payouts, such as payroll, loans, and project-based disbursements.”

The BSP began to impose the cash withdrawal limit last year after official investigations showed that banks facilitated bulk cash-outs of private contractors facing money laundering and corruption allegations related to the flood control scandal.

Daily withdrawals were capped at P500,000 or its equivalent in foreign currency. But withdrawals above the threshold were still allowed, provided that banks conduct enhanced due diligence on the client and verify the transaction’s legitimate business purpose.

“The BSP imposed the P500,000 threshold in September to help curtail money laundering and ensure the financial system is not used to facilitate illicit activities,” it said.

With the higher cap, clients can now take out up to P1 million in cash from their accounts per day without the need for tighter due diligence.

“The increase also follows the results of the latest anti-money laundering National Risk Assessment and surveillance monitoring, recognizing that robust risk-based safeguards over cash transactions remain essential to protecting financial system integrity,” the BSP said.

Meanwhile, the BSP said non-cash withdrawals, such as checks, online transfer and bank transfer, are not subject to any limit.

It added that all BSP-supervised financial institutions (BSFI) may set lower thresholds based on their own risk evaluations “consistent with risk-based customer due diligence principles.”

“If the BSFI fails to satisfactorily complete the EDD procedures; or reasonably believes that performing the EDD process will tip-off the customer, it shall file a suspicious transaction report (STR) and closely monitor the account and review the business relationship,” it said in the new circular.

“The BSFI shall also consider the alerts, red flags, and suspicious indicators, as well as typologies noted/reported by relevant government agencies, involving large or unusual cash transactions in filing STR.”

A BSP circular issued last month said that clients only have to submit supporting documents once, instead of the initial one EDD per transaction, to resolve delays in regular transactions. — Katherine K. Chan