Why didn’t banks flag large check encashments by Sara Duterte staff?

Former Landbank manager Violeta TESTIMONY. Constantino testifies during the 10th day of Vice President Sara Duterte's impeachment trial on July 29, 2026. Senate Social Media Unit Anti-Money Laundering Council guidelines spell out what transactions are considered suspicious The 10th day of Vice President Sara Duterte’s trial on Wednesday, July 29, saw two former bank officials describe the encashment of large funds by her staff as “unusual,” but not necessarily “suspicious.” Violeta Constantino, former Land Bank of the Philippines (LBP) Shaw Boulevard branch manager, said it was the first time in her 32-year career to oversee the conversion into cash of a P125-million check. Retired LBP Department of Education branch manager Nenita Camposano also testified that DepEd had never withdrawn a check as large as P37.5 million before. “In our personal opinion at the bank, of course we wondered: What is all this cash going to be used for?” Constantino said in Filipino. “‘Unusual’ just means the transaction was different from what we normally saw,” Camposano added. As pointed out by Senator Ping Lacson, there is no middle ground such as “doubtful” transactions under Philippine banking guidelines. The Anti-Money Laundering Council, based on its Guidelines on Transaction Reporting and Compliance Submissions, requires banks to submit mainly two types of reports to them: covered transaction reports (CTRs), and suspicious transaction reports (STRs). CTRs are submitted automatically by banks every time there is standard cash or equivalent monetary instrument transaction exceeding the P500,000 legal threshold within a single day. When AMLC’s report released to the House justice committee in April revealed that the bank accounts of Duterte and her husband Mans Carpio were the subject of 630 CTRs from 2006 to 2025, these were generated without human intervention. STRs are different. AMLC guidelines, as contained in Regulatory Issuance No. 2 Series of 2024, dictate that suspicious transactions are reported by banks regardless of the amount when a “suspicious circumstance” exists based on reasonable grounds. These include transactions with no underlying legal or trade obligation or economic justification, clients who are not properly identified, amounts not commensurate to the client’s financial capacity, structured transactions designed to avoid reporting, or links to money laundering. The graphic below contains various reasons that prompt a bank to file an STR. For the OVP, the LBP Shaw Boulevard branch processed four checks worth P125 million each on December 20, 2022, January 31, 2023, April 18, 2023, and July 13, 2023. For DepEd, LBP DepEd branch encashed three checks worth P37.5 million each on February 20, 2023, April 19, 2023, and July 11, 2023. In total, the P612.5 million is believed to be Duterte’s confidential fund allocation as OVP head and DepEd secretary. They have been the subject of various COA notices of disallowance, and at the center of the prosecution’s impeachment case against the Vice President. For the record, the two bank officials declined to confirm whether the encashments were reported to AMLC due to confidentiality laws. But they said themselves that they didn’t find the transactions suspicious because the withdrawals underwent the standard process — Duterte’s staff in the OVP and DepEd advised the banks prior to the encashment, the checks were released by the Department of Budget and Management, and authorized signatories were involved. “For this particular (transaction), we didn’t have doubts because we knew the transaction was legitimate,” Constantino said. Duterte’s legal team did not cross-examine Constantino and asked Camposano only one question. Defense lawyer Michael Poa downplayed the witnesses’ description of the transactions as “unusual,” saying it was just the bank managers’ opinion. The prosecution, for its part, said it is not concerned that the transactions didn’t ring alarm bells for the witnesses they presented. “If we listen to the purpose of these witnesses’ testimonies, Congressman Joel Chua never mentioned anything about suspicious or covered transactions. I think it’s clear that the sole purpose of their testimony is to establish that the funds came from the National Treasury, were downloaded to two agencies, and were eventually encashed by these payees, who apparently represented those agencies,” lead prosecutor Jinky Luistro said. – Rappler.com How does this make you feel? Loading