There is no question that there is a lot of ill-gotten wealth that has been accumulated by Filipino criminals, which is automatically also hidden wealth. However, on the flip side, there is also a lot of legally acquired hidden wealth, which has become normal for most wealthy Filipinos who have been hiding their wealth to keep them safe from criminals and other government officials, most probably the corrupt ones from the Bureau of Internal Revenue.
This normalization of hidden wealth, which seems to be a necessity for all sorts of wealthy people, regardless of the legality of how their funds were acquired, is one of the challenges that fraud or corruption investigations face. Aside from the bank privacy protections that our lawmakers and policy makers have baked into the system, probably for the protection of their own hidden wealth, Filipinos have become quite good at hiding wealth.
Bank privacy laws ensure that Filipinos can by default keep their wealth hidden, which is probably what the framers of the law had in mind from the very start. Perhaps they had a noble purpose when they did it, but one of the intentional side effects is probably so they can better hide their own wealth, legally or illegally acquired. The Philippine banking system did not stay in the grey list of the Financial Action Task Force for quite a while for no reason. Our government officials, for their own reasons, really did their very best to make large sums of money easy to hide in this country.
If you come to think of it, it is easy to understand why wealthy Filipinos would want to keep their wealth hidden. After all, there are so many criminal elements that would love to get their hands on it. Aside from the traditional criminals, there are also the famously corrupt operators in the BIR who have made a livelihood out of shaking down the wealthy by inventing tax liabilities and violations that need to be ‘settled’ with ‘compromise agreements.’
This is where we can see that corruption has penetrated almost every level of government in this country, and how it determines the way we live our lives. Corruption is not just at the Department of Public Works and Highways and its flood control projects that is currently the flavor of the month. If you come to think of it, everything the DPWH builds is most likely tainted with different degrees of corruption. The system has been in place for decades and it’s so ingrained in the system that those involved don’t even have to think about it or bother reinventing the wheel because it already works flawlessly for them.
Corruption is in the DPWH, BIR, Customs, Immigration. We have seen a Department of Education that somehow gets to have confidential funds, at the Department of Health during the COVID pandemic, and ghost employees in local governments.
In a country where corruption is so prevalent, the ability to hide wealth becomes an important life skill. The corrupt stash their takings in cold cash, in secret bank accounts, or through bagmen and dummies. But even among those who are not corrupt, and have built their wealth the good old fashioned way, hiding that wealth is also a necessary competency because of the corruption in government agencies like the BIR.
If you come to think of it, if the BIR didn’t have a reputation for being so corrupt, where those who are perceived as wealthy are targeted by what start out as legit tax audits that somehow transforms into a scam or sham, Filipinos wouldn’t have become so good at hiding their wealth. And if that had been the case, it would be much easier for authorities to search for hidden and ill gotten wealth because the needle would be hidden in much smaller haystacks.
The recent Senate hearings that revealed how the corrupt are able to move so much money, in the hundreds of millions or even billions, easily skirting bank and AMLA (Anti-Money Laundering Act) requirements, simply reinforces the perception that these rules and regulations are imposed only on the regular folk who have to jump through so many hoops just to justify a P100,000 deposit to a Pag-IBIG MP2 investment fund. Meanwhile, those who are ill-getting their wealth can move close to a billion pesos in cold cash within the span of a couple of days.
That is really telling how corruption has formed our country, instead of the other way around, where the government is supposed to at the very least, limit corruption, by making it hard for the perpetrators and proponents to steal from the nation’s coffers. Instead, we have laws that prioritize bank secrecy so thieves can hide their loot, and regulations that allow billions in bank withdrawals for the corrupt, while clamping down on small-time transactions of the regular taxpayers whose hard work funds their corruption.
This is just a few of the reasons why it feels like our country needs a total reboot.*
