The Market Monitor Minding the Nation's Business
Bribery and corruption remain pervasive in the Philippines and were cited by local companies as the “top economic crime” that they encountered in the past 24 months, a survey of the global auditing firm PricewaterhouseCoopers (PWC) showed.
Over the poll period covering the past two years, 25 percent of local firms were asked to pay a bribe while 17 percent said they “lost an opportunity to a competitor” due to bribery.
But the survey also showed that the prevalence of economic crimes in the Philippines was “below regional and global figures,” according to the PWC’s 2016 Global Economic Crimes Survey (GECS).
The survey reported that only 20 percent of Philippines-based foreign firms had experienced economic crime or fraud in the past two years.
This was lower compared to the occurrence of economic crime in Asia Pacific at 30 percent, and globally at 36 percent, PWC said.
PWC, however, said the survey results “may not reflect the true state of economic crimes in the country since respondents, who are executives of top local companies, might be hesitant to divulge sensitive and potentially embarrassing information about their companies even if assured of confidentiality or that organizations may not be aware of economic or cybercrime being committed against them.”
That the respondents were not aware of the economic crimes being committed against them “seems likely, considering PWC’s findings that such crimes are changing significantly but detection and control programs are not keeping up.”
PwC Consulting Managing Principal Benjamin Azada said the Philippines figures might imply that there is either a low prevalence of economic crimes among companies or that firms were not able to detect fraud in their system.
Azada said top industries that are highly susceptible to frauds include financial services, the government, retail and consumer.
Based on the PWC survey, local companies also lagged behind their regional and global counterparts in implementing anti-money laundering measures.
Less than half or 44 percent of the respondents upgraded compliance “in areas where violations could increase scrutiny on payments like regulatory sanctions and had designated points of contact or procedures for regulatory or banking partner inquiry responses.”
PWC said local companies did slightly better when it came to limiting their exposure to trade-based money-laundering activity, with the same number of respondents (48 percent) establishing controls around payments to and from third parties as their regional counterparts.
Azada added that cybercrime has threatened Philippines companies as 17 percent of the surveyed firms said they were affected by cybercrime in the last two years.
But the Philippines figure is still lower than prevalence of cybercrime in Asia Pacific at 21 percent, and the global figure of 26 percent. LUIS LEONCIO