Financial Crime World

Philippines Seeks to Boost Anti-Fraud Efforts as Economic Crime Trends Reveal Alarming Incidences

A Different Picture Behind the 5.9% GDP Growth Rate

The Philippines’ impressive 2019 GDP growth rate of 5.9% may be a cause for celebration, but the country’s economic crime landscape paints a different picture. According to PwC’s 2020 Global Economic Crime and Fraud Survey - The Philippine Report, at least one in two businesses have experienced economic crime and fraud over the past 24 months, with losses ranging from $5m to $50m.

Asset Misappropriation Fraud: A Persistent Threat

Asset misappropriation fraud remains the most disruptive threat to Philippine businesses, affecting 26% of respondents since 2018. This type of fraudulent scheme is a persistent threat globally, posing an imminent risk to the country’s strong economy.

Bribery and Corruption: A Growing Concern

Bribery and corruption also emerged as a significant concern, jumping three notches from fifth place last year to second place in 2020. The survey found that:

  • 21% of respondents experienced bribery and corruption
  • 14% reported losing business opportunities due to competitors who paid bribes This mirrors the country’s drop in Transparency International’s Corruption Perceptions Index, ranking 113th globally.

External Perpetrators: A Growing Role

The report also highlighted the growing role of external perpetrators in economic crime and fraud, with:

  • 50% of incidents involving external actors over the past 24 months, up from 20% in 2018 Low investment in anti-fraud technologies and inadequate government oversight may have contributed to this trend.

Proactive Measures by Philippine Businesses

Despite these challenges, Philippine businesses are taking proactive measures to combat economic crime and fraud. The survey revealed that:

  • Internal fraud incidents decreased significantly to 38%
  • Many companies plan to increase funding for anti-fraud initiatives over the next two years Implementing robust internal controls, investing in integrated tools and applications, and establishing effective whistleblowing networks are among the strategies being employed.

Prioritizing Fraud Prevention and Detection

The country’s businesses must continue to prioritize fraud prevention and detection to mitigate the risks associated with economic crime. As the government works to strengthen regulations and enforcement, companies must also adopt best practices to maintain their reputation and ensure a stable business environment.