AFASA’s role in preventing and detecting corruption
By: Atty. Rey Christian M. Guintibano on September 18,2025
THE Bangko Sentral ng Pilipinas (BSP) recently invoked Republic Act 12010, or the Anti-Financial Account Scamming Act (Afasa), to investigate bank accounts linked to the flood control corruption scandal.
The BSP said this marks its first use of the provisions and powers in the Afasa, which was enacted in July 2024, to assist other agencies, such as the Anti-Money Laundering Council, in investigating and prosecuting individuals implicated in the scandal.
This underscores Afasa’s potential not only as a shield against cybercrime, but also as a weapon against corruption (https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.aspx?ItemId=7671&MType=MediaReleases).
One of Afasa’s central features is its crackdown on money mule activities. Money mules are individuals who use, borrow or allow their financial accounts to be used for receiving, transferring or withdrawing illicit funds.
The law makes it a crime not only to act as a mule, but also to buy, sell, rent or open financial accounts under fictitious identities. This is critical since corruption proceeds rarely stay in one place, and instead are funneled through layers of accounts to make it harder to trace. By criminalizing these transactions, Afasa seeks to cut off channels that criminals rely on to conceal ill-gotten wealth.
If found guilty, an individual may face up to eight years’ imprisonment and fines of up to P500,000. If committed by three or more persons, against three or more victims, using a mass mailer or through human trafficking, the crime may be classified as economic sabotage, which is punishable with life imprisonment and a fine of up to P5 million.
Authority to look into bank accounts
Another highlight of Afasa is its grant of authority to the BSP to investigate and inquire into suspicious financial accounts. The law explicitly states that provisions of the Bank Secrecy Law, Foreign Currency Deposit Act or even the Data Privacy Act do not apply to financial accounts under investigation of the BSP.
For decades, corrupt officials and their cronies used these laws as refuge to hide their wealth. Afasa pierces this veil by granting regulators access to financial records that can serve as material evidence in legal proceedings.
Power to hold funds
Equally significant is Afasa’s grant of authority to financial institutions to temporarily hold funds that are subject of a disputed transaction for a maximum period of 30 days.
A transaction is considered disputed if the institution — based on a complaint, information from another institution or a finding under its own fraud management system — has reasonable ground to believe that such transaction appears to be unusual, from an unknown or illegal source or activity, or facilitated through social engineering.
Social engineering and digital fraud
Afasa also addresses the rise of digital scams such as social engineering schemes, in which criminals deceive people into surrendering access to their financial accounts.
A common tactic is the use of fraudulent text messages that appear to come from legitimate banks, telecom companies or government agencies, promising rewards or warning of account issues. Victims who click the link and provide personal information unknowingly hand over control of their accounts, which scammers then use to steal or launder money.
Duties of financial institutions
It is important to note that Afasa imposes clear responsibilities on banks and financial institutions. These institutions are mandated to strengthen their fraud management systems through multifactor authentication and stricter verification processes.
If they fail to put these safeguards in place and account holders suffer losses due to scams, institutions can be held liable to make restitution of funds to the account owners.
The BSP has issued Afasa’s Implementing Rules and Regulations which took effect on June 25. These were released through (1) Circular 1213, which amended information technology risk management rules for BSP-supervised institutions, (2) Circular 1214, which set out the procedure on the conduct of inquiry into financial accounts and information sharing, and (3) Circular 1215, which established guidelines on the temporary holding of disputed funds and coordinated verification process.
As corruption cases increasingly intertwine with digital transactions, Afasa ensures that regulators are not left powerless in tracing and stopping illicit wealth. With consistent enforcement, the law has the potential to deter not just petty cybercriminals, but also large-scale corruption.
Rey Christian M. Guintibano is an associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). You may email him at info@mtfcounsel.com or visit the MTF website, www.mtfcounsel.com.
The article was published at the More to Follow Column at The Manila Times on September 18,2025.
Please see this link. https://www.manilatimes.net/2025/09/18/business/top-business/this-law-can-deter-large-scale-corruption/2186126