Financial Crime Statistics in Philippines Soar Amid Strong Economic Growth
According to the latest economic reports by the Philippine Statistics Authority, the country’s GDP growth rate slowed down to 5.9% year-on-year in 2019, still one of the highest in Southeast Asia and globally. However, this growth has come at a cost as economic crime and fraud continue to rise.
Economic Crime and Fraud on the Rise
The Philippine Report by PwC’s 2020 Global Economic Crime and Fraud Survey reveals that asset misappropriation fraud remains the most disruptive type of economic crime in the country, with 26% or one out of four businesses affected since 2018. Bribery and corruption also pose a significant threat, jumping three notches to 21% this year from fifth place last year.
External Perpetrators Contribute to Losses
The survey found that external perpetrators of economic crime and fraud have significantly contributed to losses ranging from $5 million to $50 million, with the number of incidents involving external actors increasing to 50% over the past 24 months. This is attributed partly to low investment in technologies to combat economic crimes among Philippine businesses.
Business Response
Despite these challenges, respondents who reported experiencing economic crime and fraud also plan to increase funding for combating fraud over the next 24 months, reflecting a commitment by Philippine businesses to enhance corporate governance and address enterprise-wide risk of economic crime and fraud.
Reasons Behind Economic Crime and Fraud
The report highlights several reasons why economic crime and fraud continue to plague Philippine businesses, including:
- Inadequate investment in fraud-fighting initiatives
- Limitations in laws and regulations
- Insufficient scrutiny by government regulators
Impact on Business Environment
The survey also reveals that economic crimes and fraud have created frustration, anxiety, and a stressful work environment for at least one out of three respondents.
Conclusion
As the country’s economy continues to grow, it is essential for businesses to prioritize investing in fraud-fighting initiatives and strengthen their corporate governance to mitigate the risks associated with economic crime and fraud.