PHL has become destination of illicit funding —AMLC report

The Philippines has become a destination of money generated from criminal activities and the "dirty cash" has been circulating in the financial system, according to a study released by the Anti-Money Laundering Council (AMLC) Secretariat.

The report "A Risk Assessment on the Philippines' Exposure to External Threats based on Submitted Suspicious Transaction Report," found that "the Philippines has become the destination of illicit funding" from the following unlawful activities:

• violation of environmental laws
• illegal trafficking of persons
• kidnapping for ransom
• terrorism and conspiracy to commit terrorism

The AMLC study also found that "the Philippines has become a source country of illicit funds generated from smuggling."

"For the illicit funds generated from other predicate offenses included in the study, it was noted that majority of the said proceeds are only circulating within the Philippine Financial System," the AMLC report said.

The anti-dirty money body categorized predicate crimes as illegal drugs, plunder and corruption, investment scams and estafa, smuggling, violation of intellectual property rights, illegal manufacture and possession of firearms, ammunition and explosives, violation of environment laws, web-related crimes, illegal trafficking of persons, kidnapping for ransom, financing for terrorism, and terrorism and conspiracy to commit terrorism.

The study covered a total of 161,65 suspicious transaction reports worth P17.895 trillion from January 2013 to December 2017 as submitted by the Bangko Sentral ng Pilipinas (BSP).

The AMLC study also revealed countries which posed the highest threats to the Philippines.

"With regard to STR volume, majority of the inflows and outflows of all predicate crimes have been linked to the United States of America (USA)," the AMLC report said.

"In terms of peso amount, majority of theincoming criminal proceeds were coursed through various banks in the United Kingdom, while large amounts of outgoing illicit funds were mostly sent to Hongkong," the report said.

The study noted that commercial banks are the preferred financial channel of perpetrators for majority of the predicate crimes such as illegal drugs, plunder and corruption, investment scams and estafa, smuggling, indigenous peoples rights violation, illegal manufacture and possession of firearms and web-related crimes.

"Perpetrators of other predicate crimes primarily use money service businesses (MSBs) in moving the illicit funds," it said. —KBK, GMA News