On 18 September 2025, the Bangko Sentral ng Pilipinas (BSP) issued Circular No. 1218-2025 (the “Circular”) amending certain provisions of the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI). Specifically, Circular No. 1218-2025 provides restrictions on large value payouts, or transactions (such as withdrawals) of more than Five Hundred Thousand Pesos (Php500,000.00), and mandates the implementation of enhanced due diligence (EDD) by BSP-Supervised Financial Institutions (BSFIs).
The key points in Circular No. 1218-2025 are as follows:
- Cash Payout Restrictions: Withdrawals or payouts exceeding Php500,000.00 (or equivalent in foreign currency) must be processed via non-cash methods, such as checks, fund transfers, direct credits to accounts, or digital payment platforms. This applies to single transactions or aggregated ones within one banking day.
- Lower Limits Allowed: BSFIs may set lower thresholds based on their institutional money laundering (ML)/terrorism financing (TF)/proliferation financing (PF) risk assessments or customer profiles.
- Enhanced Due Diligence (EDD): All transactions above the threshold require EDD per existing regulations (Section 921/921-Q of the MORB/MORNBFI). Cash payouts may be permitted post-EDD if customers provide additional identification and proof of legitimate business purpose.
- Suspicious Activity Handling: If EDD cannot be completed satisfactorily, or if it risks tipping off the customer, BSFIs must file a Suspicious Transaction Report (STR), closely monitor the account, review the relationship, and consider red flags or typologies from government agencies.
- Policies and Procedures: BSFIs must adopt appropriate anti-money laundering/countering terrorism and proliferation financing policies to enforce these rules.
The Circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation in the Philippines.
Per the BSP, this measure seeks to address the observed rise in the abuse of cash-based transactions to move illicit funds into and out of the financial system.
For advice and guidance on compliance with banking and financial regulations, you may reach out to GODINEZ VILLANUEVA ESPIRITU & SOLIMAN (GVES Law).
This guide provides a general overview of the above transactions at the time of writing only and is not intended to be a comprehensive legal advice. This should also not be taken as an opinion on the topic. For more details and information, you may coordinate with any GVES Law Partner regarding the matter.
Atty. Rhaymund Lorenz Gratela is an Associate at GVES Law. He previously authored articles as a member of his law school’s official law journal publication.