Bangko Sentral ng Pilipinas (BSP) has increased the cash withdrawal threshold that triggers enhanced due diligence (EDD) from PHP500,000 (approximately $8,560) to PHP1 million (around $17,120). The change aims to reduce compliance pressure on legitimate transactions. At the same time, it allows regulators and financial institutions to focus more closely on high-risk activity.
The adjustment was introduced through a circular issued on February 27, according to reports from Philippine News Agency.
Policy Targets High-Risk Transactions
According to the BSP, the decision followed consultations with banks and industry stakeholders. These discussions revealed that a large number of legitimate cash transactions regularly exceeded the previous PHP500,000 threshold.
Many of these withdrawals related to operational payouts such as payroll disbursements, loan releases, and project-based payments. As a result, the earlier limit often triggered enhanced due diligence procedures for routine business activity.
By increasing the threshold to PHP1 million, the regulator aims to reduce unnecessary compliance checks. Meanwhile, they intend to maintain oversight of potentially suspicious transactions.
The central bank said the policy aims to help financial institutions concentrate their monitoring efforts on transactions that present higher risks of financial crime or money laundering.
Rule Applies Only to Cash Withdrawals
The revised rule applies specifically to cash withdrawals. This means customers can withdraw up to PHP1 million without automatically triggering enhanced due diligence requirements.
However, the BSP clarified that non-cash withdrawals remain exempt from any threshold-based due diligence triggers.
Financial institutions supervised by the central bank still retain the authority to implement lower reporting thresholds. They may base these thresholds on their internal risk assessments and compliance policies.
Background to the Previous Limit
Authorities introduced the earlier PHP500,000 threshold following a controversy involving flood control project funds in 2025. The incident raised concerns over large cash movements within the financial system.
Under the updated framework, regulators will apply enhanced due diligence on a per-customer basis. This approach focuses particularly on individuals or entities with frequent large transactions, rather than evaluating each transaction independently.
The BSP stated that this approach aims to balance financial monitoring, operational efficiency, and risk-based compliance within the Philippine banking sector.
