MONEY GENERATED from fraud or swindling made up 70% of the value involved in suspicious transaction reports from 2018 to 2020, a study by the Anti-Money Laundering Council (AMLC) showed.

“Dirty money” related to swindling reached P35.816 billion, making up 70% of the total value of selected reports from Jan. 1, 2018 to Dec. 31, 2020 covered in an AMLC study titled “An Assessment of the Philippines’ Exposure to External and Internal Threats Based on Suspicious Transaction Reports for 2018 to 2020.” AMLC’s study analyzed data from 258,087 suspicious transaction reports filed from 2018 to 2020 amounting to P50.574 billion.

Cases that fell under the predicate crime of swindling include an “outlier, amounting to P29 billion, which pertains to a single transaction involving the presentation of fictitious financial documents,” the AMLC said.

Investment scams that fall under violations of Republic Act 8799 or the Securities Regulation Code came next in terms of value at P6.519 billion or 12.89% of the total. This was followed by transactions related to predicate crimes on illegal drugs (P3.493 billion); web-related crimes (P1.69 billion); plunder and corruption (P1.204 billion), and human trafficking (P574 million), among others.

By the number of suspicious transaction reports filed from 2018 to 2020, the five leading predicate crimes were violations of the Securities and Regulation Code (39.19%); swindling (26.68%); violations of the special protection of children (17.99%); web- related crimes (8.97%); and illegal drugs (3.64%). 

The AMLC study showed banks were the most commonly tapped financial channel to move dirty money, specifically for big-ticket transactions. Meanwhile, money service businesses and pawnshops that have remittance capabilities were the modes used frequently for smaller value transactions.

The study also found that proceeds from the majority of the high-risk and medium-risk predicate crimes circulated within the local financial system. Meanwhile, illicit funds related to child exploitation and terrorism-related activities mostly came from abroad, with the Philippines being the destination.

Countries found to pose the highest threat for dirty money inflows in terms of transaction frequency include the United States, Saudi Arabia, and the United Kingdom. Meanwhile, the US, Hong Kong and Kenya topped the list in terms of outflows.

Suspicious transaction reports filed by covered institutions have increased in the past eight years and are expected to climb by 26% and 44% in 2021 and 2022, the AMLC earlier said.

The dirty money watchdog also noted a surge in suspicious transaction reports in the last three months of 2020 due to the passage of the controversial Republic Act 11479 or the Anti-Terrorism Act of 2020.

In June, the Philippines was added to the Financial Action Task Force’s “gray list” or jurisdictions that will be under increased monitoring for its implementation of tighter anti-money laundering and counter-terrorism financing measures. — L.W.T. Noble

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