Name
Global FinTech Guide
Country Name
Philippines
SectionTitle
Identification
Body
FinTechs belonging to this category provide identification services, which are required for most banking services.

Introduction

Attitude of the country towards identification services

In recognition of the significant and evolving changes in the financial system and the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) landscape with respect to the verification and protection of customer information and safeguards against money laundering, terrorist financing, proliferation financing, and other financial crimes, the members of the supervising authorities (i.e. AMLC, SEC, BSP, IC) have issued customer identification and verification guidelines for FinTech stakeholders. 

These guidelines are designed to guide both the supervising authorities and covered financial institutions on the basic principles and requirements of remote electronic customer due diligence measures for customers, their agents, and beneficial owners in relation to FinTech.

Legal affairs

Obligations and requirements to provide identification services

A covered person under the Philippine anti-money laundering laws (such as banks) may, without prior approval of the BSP, outsource to a counterparty, which may or may not be a covered person as defined under the Philippine anti-money laundering laws, the customer identification and verification procedures, provided, that the ultimate responsibility for knowing the customer, keeping the identification documents, and managing attendant risks shall rest with the covered person. 

There is no registration or license required for a counterparty/third party (who is not a covered person) in providing identification services to the covered person (e.g. banks) provided that the following conditions are complied with:

    (a) There is a written service level agreement approved by the board of directors or senior management of the covered persons and its counterparty;
    (b) The counterparty has a reliable and acceptable customer identification system and training program in place;
    (c) The covered person outsourcing the activity shall ensure that the employees or representatives of the counterparty gathering the required information and documents of, and/or conducting face-to-face contact with, the customer undergo equivalent training program as that of the covered person’s own employees undertaking a similar activity; and
    (d) The covered person shall monitor and conduct annual review of the performance of the counterparty to determine whether or not to continue with the arrangement.
Persons or entities intending to provide services in the Philippines would generally be considered doing business in this jurisdiction and therefore, must also register and obtain a primary license from the SEC. This entails submission of documentary requirements with the SEC depending on the corporate vehicle (subsidiary or branch) intended to be established.

Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area

N/A.

Economic conditions

Market size for identification services and biggest companies in this business area

The data is not available to us.

Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area

N/A.
 

Authors

Disclaimer

© 2022, SyCip Salazar Hernandez & Gatmaitan. All rights reserved by SyCip Salazar Hernandez & Gatmaitan as author and the owner of the copyright in this chapter. SyCip Salazar Hernandez & Gatmaitan has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

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