Report: Illegal billions flow in and out of Philippines.
Hundreds of billions of dollars in illegal money flowed in and out of the Philippines over the past 52 years, according to a study by the US-based research group Global Financial Integrity (GFI) released on Tuesday.
Titled “Illicit Financial Flows to and from the Philippines: A Study in Dynamic Simulation, 1960-2011,” the study showed that illicit financial flows in and out of the country reached $410.5 billion during the 52-year period. Outflows were $132.9 billion, and inflows $277.6 billion.
The illicit financial outflows were proceeds from crime, corruption, and tax evasion during 1960-2011, the study said.
The report said illicit inflows were primarily due to trade under-invoicing, also called technical smuggling. The government has also lost $23 billion since 1990 from customs evasion, according to reports.
The report said the result of the flow of this ‘Illegal billions’ illicit money reduced domestic savings, drove an underground economy, facilitated crime, and hampered economic growth.
Tom Cardamone, GFI managing director and international financial crime expert said the inflow and outflow of illegal money “drain billions of dollars from the official Philippine economy.”
He also said the money could have been “used to help the nation’s economy grow.”
“At the same time, the illicit inflow of capital and merchandise is perhaps even more insidious: it fuels crime, grows the underground economy, and costs the government billions of dollars each year in lost customs duties,” he noted.
Brian LeBlanc, the report’s co-author and GFI Junior Economist, said “Since 2000, illicit financial flows have cheated the Philippine government of, on average, at least $1.46 billion in tax revenue each year. To put this in perspective, the $3.85 billion in lost tax revenue in 2011 was more than twice the size of the fiscal deficit and equal to 95 percent of the total government expenditures on social benefits that year”.
Global Financial Integrity is a non-profit organization which aims at curtailing the cross-border flow of illicit money.