MANILA – A global study recently revealed that, for the last decade, the Philippines ranked 15th in the top 20 biggest exporters of illicit capital among the developing countries in the world.
The global report released by the Washington D.C.-based research and advisory organization, Global Financial Integrity (GFI), indicated that the country is the 15th largest in terms of the average illicit financial flows from 2003 to 2012.
According to the study, titled “Illicit Financial Flows from Developing Countries: 2003-2012,” the country has an average of $9.439 billion dollars in average illicit finances every year, attributed to trade misinvoicing.
Trade misinvoicing includes the manipulation of prices, quantity or quality of a good or service on the invoice.
This is done to shift capital illicitly, according to the study. It also noted that the same problem on invoices occur in many developing and emerging countries.
“(I)llicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” said GFI president Raymond Baker. “It is simply impossible to achieve sustainable global development unless world leaders agree to address this issue head-on.”
Also among the list are Malaysia, ranked third with an average illicit financial flow of $39.5 billion; Indonesia, eighth, $18.8 billion; and Thailand, ninth, $17.2 billion. Brunei Darussalam placed 21st in the list of largest exporters of illegal capital with an average flow of $4.3 billion.
The study also indicated that among the major causes that drains developing countries of a record $991.2 billion in 2012 alone, are crime, corruption and tax evasion.
Corruption and governance issues were also noted as key drivers of illicit flows.
“In case studies on Brazil, the Philippines, and Russia, GFI found that the link between purely illicit flows and governance tends to be even stronger than the link between capital flight and governance,” the report said.