Major money laundering country in the world


    With only 99 days to go before his term expires, President Aquino must account for yet another shameful distinction achieved by the Philippines under his watch.

    The latest dishonor is headline-grabbing and hair-raising. In the 2016 international Narcotics Control Strategy Report of the US state department, which was submitted to the US Congress on March 2, our country is named as one of the major money laundering countries of the world. It goes on to report that we are also No. 8 in the world in illicit outflows.

    As though to confirm the high-ranking, the Philippines has turned up as a destination for funds stolen in the biggest bank heist in history – the theft by hacking of Bangladesh funds from the Federal Reserve Bank of New York. Specifically, some $81 million is reported to have been illegally transferred into the country’s financial system.

    Drug transit country, illicit money laundry
    The US State Department report on money laundering and financial crimes provides a pitiful picture of the Philippine financial system and its vulnerability to illegal money transfers and international crime syndicates.

    The report said:
    “The Philippines is integrated into the international financial system but is not a regional financial center. It is increasingly becoming an important financial player in Asia, with an economy growing steadily at 6 percent annually.

    “Money laundering is a serious concern due to the Philipines’ international narcotics trade, high degree of corruption among government officials, trafficking in persons, and the high volume of remittances from Filipinos living abroad.

    “The Philippines faces challenges from sophisticated transnational drug trafficking organizations (DTOS) such as the “Hongkong Triads,” which use the Philippines as a drug transit country for cocaine and methamphetamine.

    “These DTOS use the Philippine banking system, commercial enterprises, and particularly casinos, to transfer drug proceeds from the Philippines to offshore accounts.”

    The report suggests that several known strengths of the Philippines serve as channels for money laundering.

    • The high volume of formal and informal remittances from overseas Filipinos provides a channel for money laundering.

    • The Philipine casino industry is a weak link in the anti-money laundering/counter-terrorist financing (AML-CTF) regime. Organized crime groups, such as Chinese triads, have infiltrated casino operations in the country.

    As a jurisdiction flooded with illicit funds, the Philippines is vulnerable to the breakdown of the rule of law, the corruption of public officials, and the destabilization of its economy.

    The development of new technologies and the possibility of linkages among illegal activities exacerbate the challenges that this country faces.

    Bangladesh heist blows the lid off
    The Bangladesh heist shows all this in bold relief.

    Between Feb. 4 and 6, hackers transferred $101 million from Bangladesh Bank’s account at the New York Fed to accounts in the Philippines and Sri Lanka. The $20 million sent to Sri Lanka has reportedly been recovered, but the remaining $81 million transferred to the Philippines remains missing. Some of the money is reported to have been funneled through casinos.

    The government has been slow to act despite the long- suspect activities of some businessmen.

    A certain Kim Wong, the Chinese businessman who is believed to have gotten the biggest chunk of the Bangladesh money, was able to leave the country earlier this March. Sen. Serge Osmeña has tagged him as the brains behind the Philippine end of the Bangladesh bank heist. The RCBC bank manager at the center of the scandal looks more like a pawn of Wong. RCBC may be in this much deeper than Senate probers are willing to dig.

    Toll on finance officials
    The Bangladesh bank heist has already netted the resignation of the Bangladesh Central Bank chairman.

    In the Philippines, there could also be resignations and firings of top officials of the Anti-money Laundering Council (AMLAC).

    The Securities and Exchange Commission, Bangko Sentral ng Pilipinas and the Insurance Commission together make up the council.

    The usually lordly BSP Gov. and AMLAC Chairman Amando Tetangco, Jr. is hard-pressed to explain how the country ‘s financial system has been turned into a laundry for illegal fund transfers by criminal syndicates

    In 2012, Congress had the opportunity to include the casinos under the ambit of the Anti-money Laundering Law (AML), but it desisted from including them because of the strong lobby by the Philippine casino regulator, Pagcor.

    Philippine authorities are now scrambling to tighten rules on illicit fund transfers and understand what happened in the Bangladesh bank theft.

    The Bangladesh money was routed to the Rizal Commercial Banking Corp. by hackers and then ended up in Philippine casinos last month.

    AMLAC has launched a probe to salvage its badly tattered reputation.

    The Senate also launched an inquiry last week to look into gaps in the country’s anti-money laundering law.

    At the first hearing last Tuesday, lawmakers as well as financial and gaming officials were one in urging that casinos be included under the Anti-Money Laundering Act, whose amendment in 2012 excluded casinos.

    An AMLA amendment is unlikely at this time because Congress is on a break for the May elections.

    Philippine authorities are plainly overmatched against the skillful operations and resources of money launderers and crime syndicates, who also have the corruptibility of Filipino officials as their ace in the hole.

    Darling of international syndicates
    One clear sign of Philippine weakness in stopping money laundering operations, is that whereas in most countries the hackers were stopped from stealing $951 million from the Bangladesh account at the Federal Reserve Bank of New York, in the Philippines the transfer of $81 million to RCBC accounts went through.

    The accumulating evidence of money laundering, international narcotics trade, and financial crimes being perpetratred in the country has made international executives and observers highly suspicious and wary of the Philippines. An expatriate friend has suggested in a note to me that the Philippines is becoming “the Mexico of Asia.” I was aghast.

    He lamented that we have become a country run by three groups – economic oligarchs, political dynasts, and crime fixers. That’s where we are today.

    This Bangladesh business has made all my protestations very lame.

    It appears that President Aquino’s boast that we are now the new darling of Asia needs radical editing. It looks more like we are the darling of international crime syndicates.



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    1. Yen, please make a follow-up report on the result of the Senate hearing and on the specific steps that the Bangko Sentral is taking to stop money laundering. I wish your own investigation will send to the kalaboso all the people involved in the scheme. Please continue to expose any wrong doings in the government.

    2. Makabenta writes, With only 99 days to go before his term expires, President Aquino must account for yet another shameful distinction achieved by the Philippines under his watch. Our country is named as one of the major money laundering countries of the world. It goes on to report that we are also No. 8 in the world in illicit outflows. Why just single out and blame Aquino for the money laundering scandal? Makabenta instead should go back and read history books about the Marcos regime and how the Marcos regime was one of the biggest and foremost money laundering and ill gotten wealth thief. The Republic of the Philippines has always been a major money laundering haven, from Marcos and his cronies like Cojuanco, Enrile, Imelda etc. Why should that be a surprise to Makabenta? Dirty, illegal money laundering is nothing new in the RP. Don’t just blame Aquino Jr. blame instead the entire government system beginning with the Marcos regime.

    3. The Philippines is being seen as a handy black hole for money laundering causing serious concern among global watchdogs.

      The FATF (Financial Action Task Force) , a Paris-based inter governmental organization that combats laundering and terrorist financing said deficiencies in the Philippine watch against money laundering and terrorist financing is a serious concern.

      ” A US State Department report said money laundering is a serious concern for the Philippines because of international narcotics trade, high degree of corruption among government officials, trafficking in persons, and the high volume of remittances from Filipinos living abroad.

      A Reuters report said that FATF spokeswoman Alexandra Wijmenga-Daniel said an Asia-Pacific body was responsible for reviewing Manila.”

    4. The people in the assigned agencies to watch launderers are busy spying on people against the present administration. This is the result of the government officials’ incompetence.

    5. The bottom line is Filipinos’ MORALITY. The problem is that being a dominated Christian country, we Filipinos do not put into our heart the good teaching of Jesus Christ. We go to church every Sunday, but it seems walang nang effect. What we need is really a real transformation, not only by the public officials, but also private persons. I just want to add that there are two kinds of corruptions: (a) public corruption (involved here are the public officials), and (b) private corruption (involved here are the private persons). Before the money enters the coffers of the Gov.t it is called private corruption, but after it enters the coffers, it is called public corruption.

    6. Somewhere in this column, you said the crime started in the New York Federal reserve-how come you are not condemning it for not having its systems strong enough to have allowed the train of crimes that followed? Think about it again-if the money kept in the New York Federal reserve have not been stolen-those that followed in the Phils would not have happened. And that report of the US State Department report on money laundering-did it say that a lot of stolen money like this one-actually began in the US? While we like to indulge in the simple bad guy good guy story and like to blame Fiipinos, we should not lose sight of the big picture that in this crime we Filipinos are only bit players.

      In our little world, how come the AMLC is relying on the say so of Bangladesh that their stolen money have gone to the Phils? How come the AMLC is relying only on the reports of Phil banks and other institutions? Remember the AMLC redflags remittances of over Php500 thousand. Yet AMLC did not know of the movement of $81million into the Phils? Does the AMLC depend on the administration on who to monitor, eg VP Binay and ex CJ Corona and only on the administration? It’s sad how institutions of the Phils like the AMLC have been prostituted.

    7. Fair N Square on

      Why blame Aquino again for everything that goes wrong. Based on the Senate hearings, the AMLA is flawed and needs to be strengthened. It is Congress fault, not the Executive, although AMLC could have probably done more to prevent the heist.

      • who is julia abad? What happened to info vs corona and binay? those info came from amla secretly kuno. pls. read more before you defend noy.

      • That’s the theory of command responsibility.Pinagtatawanan na kami rito biruin mo sa Sri Lanka di nakalusot pero sa atin naka lusot ano ang ipaliliwanag mo.?Mataas ang tingin nila sa mga Pilipino pero dahil sa mga ginagawa ng ilang may maitim na budhi nadadamay kami na nagtatrabaho bilang OFW.Dapat magkaroon ng pagbabago sa pamunuan ng AMLC at alamin kung saan nila ginagamit ang budget nila nakaka awa ang bansang Bangladesh mahirap na nga ninanakawan pa at sa panig natin bakit tila wala na yata sa atin ang tinatawag na kahihiyan?wala na ba talagang ganon lalo na sa mga namumuno? PEACE to ALL.

      • It is RCBC fault . The transfer was stopped but RCBC still let the money withdrawn. I will not be surprise if more RCBC officers will be indicted.The best punishment is to let RCBC pay all stolen monies to Bangladesh because it is the banks fault. Even DeLima stated that it is the responsibility of RCBC because there was a payment stop order so no withdrawals must be made. Payment stop order was timely done, in fact the stolen monies were still at RCBC when RCBC received the order.

      • Aquino appointee’s are ruining every agency which is why Aquino is to blame.
        Who hired these incompetent clowns ? Aquino
        Why doesn’t Aquino fire the clowns when they show they are incompetent ?

        Every agency is controlled by Aquino so that makes him responsible.

      • AMLC should have done their job rather than allowing themselves to be a tool of Pnoy to harass his political opponent by giving false figures or exaggerate bank accounts!!

    8. Indeed, this Philippines is the Land of the KAWATANS na BALASUBAS na MAGNANAKAWS…

      Filipinas – Islas Los LADRONES y CABRONES y TRAIDORES y COJOTES con KAWATANES- from BATANES to Tawi-Tawi

      you can start the roll call if they are present – IN A MASSIVE LARGE SCALE THEFT:

      • Unfortunately I am a Filipino. The biggest reason is our country was colonized by Chinese for a long time. Chinese people are mostly corrupt. Forgive me for this generalization but it is true. Look at the drug trade, most of the financiers are Chinese.

      • That’s right! We really need a strong leader in this country of crazy, dishonest and undisciplined people, like Lee Kwan Yoo of Singapore who transformed his small third world nation to an economic tiger, first world nation and disciplined citizens. We don’t need the likes of Aquinos, Roxas, Poe and at most Binays. These people are definitely trapos, who are advocating the same system of our present bulok na system of government.mm

    9. Philippines will never progress until the citizens be more honest both public and private. It will remain the sickman of Asia.

    10. In the Philippines, there could also be resignations and firings of top officials of the Anti-money Laundering Council (AMLAC)

      No one ever resigns over a scandal in the Philippines, they are never held accountable so there is no reason to resign. Aquino appointee’s are all incompetent and or corrupt which is why everything in the country is falling apart.

      Wait until the next election when another Aquino pick (Roxas or Poe) gets elected President and act surprised when nothing improves.

      • How can AMLAC be responsible. The credit was received Tuesday morning, the monies were gone Tuesday afternoon. The telegraphic transfer did not pass thru AMLAC, it went straight to RCBC.

    11. The international transfer of funds is something no government can stop. Proceeds from drugs, kidnapping, theft, corruption, gambling or prostitution will always be there. The better way is for wisdom in looking at the bigger picture and turn it into something good for the commonwealth. Whereas gambling before connotes shady and illicit dealings, it has become acceptable with its euphemistic term of “gaming” and governments has continued to profit therefrom. Hence, we can just stop being hypocrites and allow any amount of money to come in, no questions asked provided the amount is no less than USD10M or even a higher threshold of USD25M and they are locked in for at least ten years and they are used to purchase government bonds or treasuries. In that way, we do not need all those casinos and still have all the money for development.

      • All transfer must pass thru banks. Without the banks, there will be no money laundering. Control the banks, we can control money laundering. The solution. : remove the bank secrecy law, this will solve the problem because the bank accounts will be subject to scrutiny by AMLAC and responsible government agency given the task of checking.