April 12, 2016
News /
Posted by NCID

The Philippine financial system was rocked by the country’s largest electronic heist in its history. USD81Mn was hacked, stolen, and laundered from the US dollar account of Bangladesh Bank (Central Bank of Bangladesh) at the US Federal Reserve of New York and remitted to the RCBC (Rizal Commercial Banking Corporation), one of the Philippine’s largest banks. The whole fiasco turned into a firestorm forcing the resignation of Bangladesh Central Bank governor Atiur Rahman to resign from the top post and prompting the Philippine upper chamber, the senate, to start proceedings for a formal investigation into the matter.

A country marked by many social ironies, the integrity of the Philippine financial system has been placed on the line yet again, but this time in front of a much wider audience. Contrasted by yet more irony, the Philippine government has been promoting the casino and gaming industry in the country in a bid to take a piece of the pie from otherwise burgeoning and highly profitable business.

Flying into the Ninoy Aquino International Airport, Manila’s main hub, a burgeoning of buildings and brightly lit with a frenzy of colorful lights by its side seemingly greeting the rich Chinese high rollers flying into the city on their way to the casino strip. Wealth from mainland China and the Chinese Triads have been flowing to casino centers such as Macao. Making Macao one of the largest gambling centers in the world. (Cohen, 2016) Manila is not one to miss out. As the country has seen a growing increase in interest in casino and gaming investments over the last couple of years. The Philippines aims to reach revenues of USD10Bn per year by the end of the decade from gambling revenues alone. (Moss & O'Keefe, 2015) The Solaire, the first luxury casino and gaming facility, turned profitable after just a year of operations. Philippine casinos also present a much lower rate in gaming income taxes. Manila offers about a 15% tax rate versus Macao’s 40% attracting a lot more Chinese high rollers. (Cohen, 2016) Patterned after Macao’s success, the country has also been receiving an increasing number of gamer tourists through “junket operators”. These junkets have been rerouting their customers to Manila from Macao due to lower taxes. Junket operators function in a network of middlemen who recruit wealthy Chinese gamblers in the mainland and lend them money for them to go on even higher rolls in Macao casinos. The junket operator then handles debt collection and makes his profits from commissions. (Moss & O'Keefe, 2015) This was where the dirty money trail ended.

The Philippines’ AMLC (Anti Money Laundering Council) picked up the suspicious transaction from behind the frosted glass of an RCBC bank branch in Makati, Manila’s main financial center which eventually led to a Filipino remittance company ending up with several casinos. In the casinos, it was dispersed to various accounts of junket operators. However, this is just the general story. Marred in a flurry of “he said/she said” blaming. The Philippine Senate still has to conclude its investigation.

This case is highly controversial and a very important matter for the Filipino people. Not only because it involves millions of US Dollars of another sovereign state but because it touches on the integrity of the country’s financial and remittance system.

The Philippine economy is heavily reliant on its OFWs that remit over USD26.92Bn a year. (GMA News Online, 2015) To be concise over 6,000 people daily (Migrant International, 2015) leave the country seeking better work and life opportunities overseas. It is estimated that a little over 10% or about 10 million Filipinos live and work overseas sending back home to their families. (Commission on Filipinos Overseas, 2013) Most of which live in North America, the Middle East, Oceania, and Europe. This social phenomenon which started in the second half of the 20th century has become a fundamental part of the Philippine economy.

In 2013, the Philippine congress amended the AMLA (Anti Money Laundering Act) but these amendments were only the bare minimum to satisfy the FATF (Financial Action Task Force), an international watchdog, to not put the country on its blacklist. (the Economist, 2016) Such a restriction would have severely restricted the billions of US Dollars flowing into the country each year. Moreover this would have made it very difficult for millions of OFWs to send money back home to their families. This would later have catastrophic effects on the Philippine economy which is highly consumer based driven.

The main problem is the Philippines’ AMLA is just too lax and way too politically convenient. The existing Philippine “bank secrecy law” as well is one of the strictest in the world.  It is a fact that existing Philippine laws against money laundering are amongst the weakest in the world. (Lopez & Batino, 2016) This comes also as a result of martial law years under the former dictator Ferdinand Marcos who had grand plans of attracting a lot foreign money by converting the country into a fiscal paradise.

A long history of corruption has led to a long term social sickness that has been plaguing the country as well as “plausible deniability”.  This along with a very weak justice system has been a staunch problem in the Philippines. It is not uncommon in public hearings to see a lot of denying, withholding of information, as well as inconsistent stories surfacing.

The whole process at the Philippine Senate has turned into the “nation’s biggest and most successful laundromat”. (Pamintuan, 2016) Just as has been in the past, the country’s public hearings pretty much turn into some sort of melodramatic soap opera. The junket operators and money launders have always been around. This time they have just gone too far.

This is a great chance for the Philippines to show to the world how serious it is in fighting crime and cleaning up and strengthening the integrity of its financial system. Just like many things that has come and gone through Philippine history it’s a wait and see situation how the country handles this political and financial firestorm.




Cohen, M. (4 de February de 2016). Forbes Magazine . Obtenido de Macau Casino Revenue Falls Again In January; Will The House Stay At 20?:

Commission on Filipinos Overseas. (1 de December de 2013). Stock Estimate of Filipinos Overseas. Manila, Philippines. Obtenido de

GMA News Online. (9 de June de 2015). Infographic: where USD26.92B of OFW remittances come from. Obtenido de GMA News:

Lopez, D., & Batino, C. (2 de March de 2016). Philippine gaming regulator probes alleged money-laundering. Obtenido de Bloomberg:

Migrant International. (29 de July de 2015). Number of OFWs leaving daily rose from 2,500 in 2009 to 6,092 in 2015. Obtenido de Migrant International:

Moss, T., & O'Keefe, K. (2 de February de 2015). The Wall Street Journal. Obtenido de Manila doubles down on gambling:

Pamintuan, A. (18 de March de 2016). Black Hole. Obtenido de The Philippine Star:

the Economist. (26 de March de 2016). Walls of silence. Obtenido de The Economist:

Picture by Ree Dexter Flicker user.