Anti-Money Laundering Requirements for Large Bank Deposits in the Philippines

Updated for the Philippine legal framework as of mid-2024. This is an educational overview and not a substitute for legal advice.

1) Big-Picture Overview

When you make a large bank deposit in the Philippines—especially cash—banks must apply the Anti-Money Laundering Act of 2001 (AMLA, Republic Act No. 9160), as amended (notably by R.A. 9194, 10167, 10365, 10927 and 11521), along with Bangko Sentral ng Pilipinas (BSP) regulations and Anti-Money Laundering Council (AMLC) rules. The regime is risk-based: the bigger the deposit and the higher the perceived risk, the deeper the checks.

At the core are two reporting duties for “covered persons” (including banks):

Covered Transaction Reports (CTR): cash (or equivalent monetary instrument) transactions exceeding ₱500,000 in one (1) banking day—whether single, related, or multiple—must be reported to the AMLC.
Suspicious Transaction Reports (STR): regardless of amount, a transaction must be reported if it has “red flags” (e.g., inconsistent with profile, structured/smurfed deposits, no apparent lawful purpose).

2) Legal Architecture

Primary statute: AMLA (R.A. 9160) as amended, plus rules implementing the Terrorism Financing Prevention and Suppression Act and UN targeted financial sanctions (TFS).
Regulators:
- BSP (supervises banks and non-bank financial institutions for AML/CFT compliance).
- AMLC (financial intelligence unit; receives CTRs/STRs, analyzes, can seek freeze/inquiry orders, and imposes administrative sanctions).
Key implementing instruments: BSP’s AML/CFT rules (formerly Circular No. 706 as amended and now consolidated in the MORB and related circulars), AMLC Registration and Reporting Guidelines (goAML e-filing), AMLC Guidance on Suspicious Indicators, and Customer Due Diligence (CDD) standards.

3) Who Is a “Covered Person”

For large bank deposits, the relevant covered persons are BSP-supervised financial institutions (banks, their branches and subsidiaries). The AMLA also covers money service businesses, e-money issuers, certain non-bank lenders, casinos (R.A. 10927), and—subject to specific thresholds—real estate developers/brokers, among others; but this article focuses on banks.

4) What Triggers a CTR vs. an STR

A) Covered Transaction Report (CTR)

Threshold: > ₱500,000 in cash or equivalent within one banking day (single or aggregated related transactions).
Examples that typically trigger a CTR:
- A single deposit of ₱700,000 cash over the counter.
- Five cash deposits of ₱120,000 each by the same customer on the same banking day (₱600,000 total).
Deadline to file: Within five (5) working days from the date of the covered transaction.

Notes • “Cash or other equivalent monetary instrument” covers cash and cash-like bearer instruments (e.g., traveler’s checks); ordinary checks from another bank account generally do not count toward the CTR threshold but can still trigger an STR if suspicious. • “One banking day” is bank-specific; night drops/after-hours post to the next business day.

B) Suspicious Transaction Report (STR)

Filed regardless of amount when any suspicious indicator appears (deadline: within five (5) working days from determination of suspicion). Common indicators:

Structuring/smurfing: deposits broken into smaller amounts to stay below ₱500,000 in a day or to avoid KYC escalation.
No apparent lawful purpose or inconsistent with customer profile or declared source of funds.
Third-party or proxy deposits where the real owner is obscured.
PEP risk: customer is a politically exposed person or connected to one, without commensurate wealth.
Use of multiple branches in a short span, hurried behavior, or reluctance to provide information.
Adverse media or sanctions-list hits.

Attempted suspicious transactions must also be reported.

5) Customer Due Diligence (CDD) for Large Deposits

Banks must Know Your Customer (KYC) and understand the Source of Funds (SoF) and Source of Wealth (SoW) commensurate with risk.

Minimum CDD

Identify and verify the customer using reliable, independent documents (valid ID/s, selfie/live face match if digital onboarding).
Beneficial Ownership (BO): identify the natural person(s) who ultimately own/control the customer (commonly ≥25% ownership, or anyone with significant control). Where no natural person can be identified, document the senior managing official.
Purpose and nature of the relationship (why the account and how it will be used).
Ongoing monitoring: ensure transactions match the profile; update KYC when risk changes.

Enhanced Due Diligence (EDD) Triggers

Large cash deposits, PEPs, non-face-to-face onboarding, complex ownership, high-risk countries/sectors, or adverse media.
EDD may include: additional IDs, proof of SoF/SoW (e.g., payslips, contracts of sale, remittance records, business permits, tax returns), senior-level approval, tighter monitoring, and lower transaction limits until verified.

Simplified Due Diligence (SDD)

Possible for low-risk scenarios, but never when the customer, product, channel, or geography is high risk or when there are red flags.

6) What Banks Do When You Make a Large Cash Deposit

Frontline screening: teller flags cash meeting or trending toward CTR threshold or showing red flags.
Immediate KYC check: confirm identity, account ownership, and whether a third party is making the deposit.
SoF inquiry: the bank can ask and document the source (salary, sales proceeds, loan, asset sale, etc.) and request proof for high-risk or very large amounts.
Sanctions and watchlist screening: names are run against sanctions/terrorism lists and internal alerts.
Risk escalation: compliance reviews the deposit, decides CTR vs STR (or both), and whether EDD is needed.
Filing & recordkeeping: bank files CTR/STR within five working days and keeps records for at least five (5) years (longer if there is an ongoing case).
No tipping-off: staff cannot tell a customer that an STR will be or was filed.

7) Special Patterns and How They’re Treated

Structuring (smurfing): multiple deposits just under ₱500,000—especially across branches or through proxies—can trigger an STR and account-level reviews.
Third-party deposits: permitted by some banks, but often high-risk; expect EDD and possible restrictions.
Corporate accounts: banks must look through to beneficial owners and may require board resolutions, BO declarations, and supporting documents for unusually large cash lodgments.
Foreign currency deposits (FCDU): protected by foreign currency deposit secrecy, but AMLA provides statutory exceptions for AML/CFT—banks can still report CTRs/STRs and comply with freeze/inquiry orders.
Non-cash large deposits: big inward transfers or checks won’t trigger CTRs per se (CTR is cash-centric) but can trigger STRs if inconsistent with the profile or if there are other red flags.
Cash couriers at airports: bringing in/out > US$10,000 (or equivalent) in cash or bearer instruments must be declared; non-declaration is itself a red flag for subsequent bank deposits.

8) Reporting Mechanics (Bank-Side)

Registration: Banks are registered with the AMLC’s goAML portal.
CTR contents: customer identifiers, transaction details, amount, date/time, channel, purpose (if captured).
STR contents: the suspicious indicators narrative plus all identifying and transaction information.
Timelines: CTR and STR—within 5 working days from the transaction (CTR) or from the date suspicion is established (STR).
Confidentiality: reports are confidential by law and cannot be shared with the customer.

9) Freezing, Bank Secrecy, and Your Rights

Bank secrecy laws (R.A. 1405; R.A. 6426) protect deposits, but AMLA authorizes the Court of Appeals to issue inquiry and freeze orders ex parte on AMLC petition when there is probable cause of money laundering/terrorism financing.
Targeted Financial Sanctions: accounts of persons designated under UN Security Council sanctions (and domestic designations) may be immediately frozen.
Due process: you may challenge freeze orders and adverse administrative actions; criminal cases require proof beyond reasonable doubt.

10) Sanctions for Non-Compliance

For Banks and Staff

Administrative: fines, directives, remedial actions, possible suspension of officers, and supervisory actions by BSP and AMLC.
Criminal (for willful blindness or participation): possible imprisonment and fines under AMLA if bank personnel knowingly assist in money laundering.

For Customers

Money laundering offenses attach when a person knows or should have known that funds are proceeds of an unlawful activity (e.g., transacting, converting, concealing, or facilitating).
Civil/forfeiture: proceeds and instrumentalities may be frozen and forfeited.
Administrative seizures may follow cross-border currency violations.

11) Politically Exposed Persons (PEPs) and Large Deposits

Banks must apply EDD to domestic/foreign PEPs, their immediate family, and close associates. Expect granular SoF/SoW verification, senior management approval, tighter limits, and enhanced ongoing monitoring for large cash transactions.

12) Data Privacy and Confidentiality

Data Privacy Act (R.A. 10173) applies, but AMLA reporting is a lawful, mandated processing basis.
Tipping-off prohibition: staff cannot inform you that an STR is being filed or that your account is under AML review.
Access: you retain general privacy rights, subject to AMLA/statutory exceptions.

13) Practical Guidance

If You’re a Depositor Bringing Large Cash

Bring documents supporting source (e.g., deed of sale, loan proceeds advice, invoice/ORs, payslips, bank withdrawal slip from another bank).
Avoid structuring: don’t break deposits into smaller tranches to “stay under the radar”—that creates suspicion.
Use traceable channels where possible (inward bank transfers, manager’s checks) if consistent with your situation.
Be consistent with your declared occupation/income and prior account behavior.

If You’re a Bank Compliance Officer

Tune scenarios to capture same-day aggregation and cross-branch patterns.
Train frontline to probe SoF politely, document responses, and escalate red flags quickly.
EDD playbooks for large cash (docs checklists; occupation-specific SoF matrices).
File on time (5 business days), maintain audit trails, and avoid tipping-off.
Review correspondent banking, cash-intensive businesses, and high-risk geographies periodically.

14) FAQs

Q: Is there a fixed legal ceiling for how much cash I can deposit? A: No bright-line ceiling—but cash over ₱500,000 in a banking day must be CTR-reported, and any amount can be STR-reported if suspicious.

Q: Will the bank refuse my deposit if I can’t show documents immediately? A: The bank may delay or decline pending CDD/EDD if it cannot satisfy itself about identity and lawful source—especially for high-risk cases.

Q: Do repeated ₱490,000 cash deposits avoid reporting? A: No. Structuring to evade thresholds is a suspicious activity and triggers STRs (and potentially stronger action).

Q: Are remittances and transfers treated like cash? A: Not for CTR thresholds (cash-centric), but they may still be suspicious depending on context and trigger an STR.

Q: How long do banks keep my AML records? A: At least five (5) years from transaction date or account closure—longer if there’s a case or investigation.

15) Quick Compliance Checklists

For Frontliners (Large Cash Deposit)

Verify ID & account ownership
Capture depositor/third-party details
Ask & document Source of Funds
Screen vs. sanctions/PEP lists
Aggregate same-day cash to test ₱500k threshold
Escalate to Compliance for EDD if red flags
Ensure CTR/STR within 5 working days
Do not tip off

For Customers

Carry proof of SoF (sale documents, payroll, contracts, loan proceeds, invoices/receipts)
Use your own account where possible (avoid proxies)
Keep deposits consistent with your declared profile
Expect questions for very large or unusual cash

16) Takeaways

CTR: cash > ₱500,000 in one banking day → report to AMLC.
STR: any amount with red flags → report to AMLC.
KYC/EDD: banks must know who you are, who ultimately owns/controls the funds, and where the money comes from.
Records 5+ years, no tipping-off, and potential freeze/inquiry orders notwithstanding bank secrecy.
Honest, well-documented deposits face routine checks; structuring and opacity invite scrutiny.

Disclaimer

This article summarizes Philippine AML/CFT requirements for large bank deposits as of mid-2024 and is intended for general information only. For specific situations, consult your bank’s compliance team or seek independent legal advice.