The latest report released by regulatory technology companies Tookitaki and AFC Ecosystem in collaboration with ABCOMP Philippines points out that the Philippine financial system is facing increasingly severe threats of fraud and money laundering.
The report warns that although digital transformation has increased financial inclusivity, it has also opened the door to increasingly sophisticated criminal methods.
The study highlights a series of urgent vulnerabilities, including illegal remittance operators, online scams, casino intermediaries, and the misuse of digital identities. Due to limited regulation of high-risk industries (such as designated non-financial businesses and professions, including casinos, brokerage firms, and law firms), these risks are exacerbated.
The most concerning issue is the surge in investment scams, particularly targeting Overseas Filipino Workers (OFW). Scammers often use social media and digital platforms, promising high returns but often leading to substantial financial losses. It is estimated that such scams will cause losses exceeding 100 billion Philippine pesos (approximately 1.74 billion US dollars) in 2024.
Account takeover fraud is also on the rise, with criminals using phishing, credential stuffing, and accessing digital identity data to infiltrate personal bank accounts. The report estimates that over 3000 such incidents will be recorded in 2024, with losses amounting to 409 million Philippine pesos.
The concerns about cross-border cash smuggling and money laundering through mule networks, as well as risks associated with unregulated online platforms and investment-based residency programs, remain significant.
The report calls for improved cross-border cooperation, enhanced detection of digital fraud, and stricter enforcement of "Know Your Customer" (KYC) protocols. It also suggests increasing the transparency of high-risk transactions and further supporting financial institutions in adopting advanced monitoring tools.
