Financial Crime Prosecution Statistics in Philippines Show Alarming Trend
Despite the country’s strong economic growth rate, financial crime and fraud continue to plague Philippine businesses. According to PwC’s 2020 Global Economic Crime and Fraud Survey - The Philippine Report, at least one out of two respondents have experienced such crimes over the past 24 months.
Asset Misappropriation Fraud Remains a Major Concern
Asset misappropriation fraud remains the most disruptive type of economic crime in the country, affecting 26% of businesses. Bribery and corruption also emerged as a major threat, with 21% of respondents reporting losses due to such schemes.
External Perpetrators Contribute Significantly to Financial Crimes
The survey results showed that external perpetrators of financial crimes may have contributed significantly to the staggering loss of $5m to $50m. Over the past 24 months, the number of fraud incidents involving external actors increased to 50%, up from 20% in 2018.
Experts Point to Several Reasons for the Alarming Trend
Experts attribute this trend to several factors, including:
- Low investment and adoption of technologies to combat economic crimes
- Inadequate provisions in Philippine laws and regulations
- Limited ability of government regulators and organizational oversight functions to scrutinize compliance
Internal Fraud Decreases, but Impact Remains Significant
The survey also revealed that fraud committed by internal actors has decreased significantly, from 67% in 2018 to 38%. However, the impact of economic crimes on businesses remains significant, with respondents reporting frustration, sleepless anxiety, and a stressful work environment.
Businesses Commit to Combating Fraud
Despite these challenges, Philippine businesses have shown a commitment to combating fraud. A quarter of respondents plan to increase funding for anti-fraud initiatives over the next 24 months. The survey highlighted the importance of common best practices in addressing enterprise-wide risk, including:
- Improvements in internal and cyber controls
- Enhancement of policies and procedures
- Investment in integrated tools and applications
Urgent Need for Collaboration between Government and Private Sector
The findings mirror concerns raised by Transparency International’s Corruption Perceptions Index, which saw the Philippines’ rank drop from 99th to 113th. As businesses operating in the Philippines may be more likely to contemplate paying bribes as a feasible option to win business, it is crucial that the government and private sector work together to address these issues and ensure the continued resilience of the Philippine economy.
Call to Action
The article highlights the urgent need for collaboration between the government and private sector to combat financial crime and fraud. It emphasizes the importance of investing in technologies and processes that can help prevent and detect such crimes, as well as enhancing policies and regulations to ensure a more transparent and accountable business environment.