Cash withdrawal due diligence trigger raised

Title BSP Raises Cash Withdrawal Threshold for Enhanced Due Diligence to P1 Million

The Bangko Sentral ng Pilipinas (BSP) has taken a significant step towards streamlining routine transactions while maintaining safeguards against illicit activities by raising the threshold for cash withdrawals that will trigger enhanced due diligence from P500,000 to P1 million.

New Threshold for Enhanced Due Diligence

As of [date], cash withdrawals exceeding P1 million will require bank clients to provide additional information to prove that their transactions are legitimate, as per BSP Circular 1230. This marks a substantial increase from the original P500,000 threshold, which was introduced in September 2025 to help curb money laundering and prevent the financial system from being used to facilitate illegal activities.

Rationale Behind the Change

The BSP's decision to raise the threshold was the result of extensive consultations with banks and various industries. These consultations revealed that a large number of cash transactions above the earlier P500,000 threshold were, in fact, legitimate. These included payroll payouts, loan releases, and project-based disbursements. By adjusting the threshold for enhanced due diligence (EDD), the central bank aims to strike a balance between streamlining routine and recurring cash transactions while maintaining safeguards against illicit activities.

How Enhanced Due Diligence Will Work

The due diligence process will be conducted on a per-customer basis, not per transaction. This means that clients with established transaction patterns should not experience repeated disruptions for each withdrawal as long as their profiles and activities are consistent with their declared business or financial background. Banks will still have the discretion to impose lower thresholds if their own risk assessments warrant stricter controls.

Suspicious Transactions

If a bank fails to satisfactorily complete the EDD procedures or reasonably believes that performing the EDD process will tip-off the customer, it shall file a suspicious transaction report (STR) and closely monitor the account and review the business relationship. The bank shall also consider alerts, red flags, and suspicious indicators, as well as typologies noted/reported by relevant government agencies, involving large or unusual cash transactions in filing STR.

No Threshold for Non-Cash Transactions

The BSP clarified that there are no thresholds for non-cash withdrawals, meaning transactions conducted through checks, electronic transfers, or other non-cash channels are not covered by the enhanced due-diligence trigger.

Conclusion

The BSP's decision to raise the threshold for cash withdrawals that will trigger enhanced due diligence is a step towards streamlining routine transactions while maintaining safeguards against illicit activities. By adjusting the threshold, the central bank aims to balance the need for due diligence with the need for efficiency and customer convenience.

Keywords cash withdrawals, enhanced due diligence, Bangko Sentral ng Pilipinas, money laundering, anti-money laundering, financial system integrity.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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