Political Party BSP Imposes Cash Transaction Limit at Across P500,000 Mark
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued a new rule aimed at reducing money laundering and other financial crimes linked to heavy cash usage. Circular No. 1218 series of 2025, issued on September 18, 2025, requires transactions exceeding 500,000 Philippine Pesos or their equivalent in foreign currency to be processed through traceable payment channels such as bank transfers, checks, and digital platforms.
This move is part of a global trend among regulators who are stepping up efforts to discourage large cash-based transactions in favour of digital and traceable payments. The new rule underscores the BSP's commitment to preventing the financial system from being used for illicit activities and strengthens safeguards against financial crime.
Mark Ynoc, president of the Mandaue Chamber of Commerce and Industry (MCCI), has expressed concerns that the new BSP rule could slow down operations for firms heavily relying on cash. Ynoc proposed building more robust safeguards that target illicit activity without hampering legitimate businesses. He suggested that regulators focus on stronger profiling of newly established companies to combat money laundering, rather than blanket restrictions.
The new rule also gives BSP-supervised financial institutions (BSFIs) discretion to impose lower cash thresholds that are aligned with their internal risk management practices and customer profiles. Depending on the risk assessment, banks may require additional documents to establish legitimate business purposes and, if warranted, file a suspicious transaction report.
Withdrawals exceeding the cap will trigger enhanced due diligence by BSFIs. Larger cash payouts may still be allowed once compliance checks are satisfied. The threshold applies to both single transactions and multiple transactions that cumulatively reach the limit within one banking day.
The reform is expected to improve transparency and oversight in financial markets, promoting confidence in the banking system. Ynoc acknowledged the importance of the move, stating that while additional processes and clearances may create bottlenecks for expansion and growth, the fight against financial crime is crucial for the long-term stability and integrity of the economy.
In conclusion, the new BSP rule aims to combat money laundering and financial crimes while promoting confidence in the banking system. Businesses that frequently conduct large cash transactions may need to adjust their operations to comply with the new rule, but the BSP's commitment to preventing illicit activities is clear.
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