(First of two parts)
IN BRIEF:
• Across jurisdictions, tax transparency is increasingly built around automatic information exchange, a shift embodied in frameworks such as FATCA, CRS and CARF.
• The Philippines has made progress, but bank secrecy restrictions continue to limit its full participation in global information-sharing frameworks.
• Aligning with international standards can strengthen tax collection, access to offshore financial information and investor confidence.
Some sentences land like a stone in still water. At the 5th SGV Tax Symposium at the Makati Shangri-La on Oct. 19, SGV Head of Tax Jules Riego said, “One area we can revisit is the Philippines’ tight secrecy of bank deposits law. None of our ASEAN neighbors has such a law, only the Philippines has it.”
It was not a provocation, but an uncomfortable observation. Among the original five ASEAN members, only the Philippines has yet to sign on to the OECD’s Common Reporting Standard (CRS). The Bangko Sentral ng Pilipinas has likewise noted that the Philippines is the only country whose deposit secrecy rules constrain prudential supervision. In a region that has spent the past decade strengthening tax cooperation, the Philippines remains the one seat at the table that cannot fully share what it knows, or receive what others know about its taxpayers.
Tax transparency is no longer a footnote for specialists. It is part of the infrastructure of fairness in an increasingly borderless economy. For the Philippines, the choice is whether to help shape this evolving global framework or allow others to define it for us.
THREE STANDARDS, ONE DIRECTION
Three acronyms frame the debate. The US Foreign Account Tax Compliance Act (FATCA), enacted in 2010, requires foreign financial institutions to report accounts held by US persons. FATCA’s success inspired a broader global standard. The OECD’s CRS, approved in July 2014, generalized that model. Participating jurisdictions collect data from their financial institutions and exchange it automatically every year, without a formal request. The first exchanges took place in September 2017, and more than a hundred jurisdictions now participate. The newest layer, the Crypto-Asset Reporting Framework (CARF), extends the same logic to crypto assets, so that digital wealth does not become the loophole that swallows a decade of progress.
The principle running through all three is simple. The tax authority of the country where one lives should be able to see the income one earns and the assets held abroad, just as it sees what one earns at home.
A DECADE OF HALF-STEPS
The Philippines has not been idle, but its progress has been uneven. On FATCA, we moved early. In July 2015, the Department of Finance (DoF) signed a Model 1 intergovernmental agreement with the US, establishing a framework for Philippine financial institutions to report information on US-person accounts to the Bureau of Internal Revenue (BIR) for exchange with the US Internal Revenue Service (IRS). The agreement provides for reciprocal exchanges of information while addressing the potential 30% US withholding tax consequences of FATCA non-compliance. Implementation, however, ran slower than first anticipated as the legal, administrative, and technical groundwork was laid.
Momentum has been slower on CRS. The push for automatic exchange of information gained traction during debates on the proposed General Tax Amnesty. In 2019, former President Rodrigo Duterte vetoed the general tax amnesty provisions of Republic Act (RA) No. 11213 and urged Congress to enact a replacement measure that would lift bank secrecy in fraud cases and establish an information-sharing framework consistent with international tax transparency standards. In 2023, the Philippines joined the Global Forum’s Asia Initiative as its 17th member, signaling greater engagement in international tax cooperation. To date, however, the country has neither signed the CRS Multilateral Competent Authority Agreement nor established the legal framework necessary to exchange information under the CRS, with existing bank secrecy restrictions among the legal barriers that would need to be addressed.
On CARF, we have finally committed. In May 2025, at the 8th Asia Initiative Meeting in the Maldives, then-Finance Undersecretary Charlito Martin Mendoza signified the country’s pledge to implement CARF by 2028. He is now BIR Commissioner, and he has said the preparation will strengthen the agency’s information security systems.
The legislative track is moving as well. In December 2025, the House of Representatives approved on third reading a measure amending the bank secrecy framework. Some bills are pending in the Senate. In his July 2026 State of the Nation Address, President Ferdinand Marcos, Jr. called for amendments to the Bank Secrecy Law, the Anti-Money Laundering Act, and related measures. The Banking Reform for Integrity, Good Governance, Honesty, and Transparency (BRIGHT) Act is among the priorities of the Legislative-Executive Development Advisory Council (LEDAC), although legislation has yet to be enacted.
Our neighbors have already crossed this river. Singapore adopted the CRS in 2017, and Indonesia, Malaysia and Thailand have also signed on. On CARF, Malaysia, Singapore and Thailand sit with the Philippines in the group starting exchanges in 2028, while Vietnam had not yet committed. The ASEAN member states themselves named exchange of information a priority in fighting illicit financial flows and cross-border tax avoidance.
The risk of standing still is concrete. As more jurisdictions exchange data, a country that remains outside the system risks becoming a destination or transit point for undeclared wealth, along with the reputational and enforcement consequences that may follow.
WHAT THE PHILIPPINES STANDS TO GAIN
Tax we are owed. Offshore income that escapes taxation shifts the burden to compliant taxpayers. The Asia Initiative reports that information exchange generated about 1.6 billion euros in additional revenue for participating Asian jurisdictions in 2025 alone. For a country with significant development needs, collecting taxes already due is preferable to increasing the burden on those who already comply.
Information we cannot access today. Automatic exchange of information is a two-way street. It would allow the BIR to obtain data on offshore accounts held by Philippine residents without relying solely on slow and often cumbersome request-based processes.
Trust that markets can price in. Investors value jurisdictions with transparent and consistently enforced rules. Greater transparency makes it harder to conceal illicit wealth, reinforcing the integrity and predictability that underpin investor confidence and public trust.
Taken together, these benefits make the case for greater tax transparency increasingly difficult to ignore. However, moving from commitment to implementation will require the Philippines to confront the legal framework that has long defined the confidentiality of bank deposits and other financial accounts.
In the second part of this article, we discuss the case for reforming the Philippines’ bank secrecy framework, the legal and policy challenges involved, and the safeguards needed to balance greater tax transparency with legitimate financial privacy.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Jay A. Ballesteros is a financial services tax partner of SGV & Co.
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