The post-Covid-19 pandemic has led to an economic recession, causing many people to lose their jobs, making life difficult, and also leading to an increase in scams. Attractive offers such as "invest 1 and get 10", or "you don't need to do anything to make money, with just a small capital" cannot help but attract many gullible people who want to earn more income. in a difficult economic situation. As a result, in the Philippines, many people have fallen into investment "traps" from scammers. These "phantom" investments can be stock investments, corporate scandals or pyramid scams. In this article, let's learn about some investment scams in the Philippines and how to avoid scam risks.

Corporate scandal in the Philippines

The PDAF scandal

Scams in the Philippines
Scams in the Philippines

One of the infamous scandals of 2013 was the Priority Development Assistance Fund (PDAF), also known as the "pork barrel" scam, which involved the alleged misuse of billions of pesos in Legislators' discretionary funds. The mastermind behind a network of fake non-governmental organizations specializing in siphoning money is businesswoman Janet Lim-Napoles, in addition to a number of politicians who were also implicated, arrested and tried.

BPI glitch 

In 2017, one of the largest banks in the Philippines, BPI, encountered a system failure that affected the transactions of more than one million customers. This incident doubled some transactions, resulting in unauthorized withdrawals and incorrect customer account balances. Although the issue has been resolved and BPI also reassured users that this was not a hack, it raised concerns about the cybersecurity of financial institutions in the country.

ZTE-NBN scandal 

Financial scams in the Philippines
Financial scams in the Philippines

This was one of the major scandals in the Philippines in 2007 and 2008 surrounding allegations of corruption in the national government's contract with Chinese company ZTE for the National Broadband Network (NBN) project. Allegations that senior officials had accepted bribes that led to Senate investigations and the deal was eventually canceled.

Pyramid scams in the Philippines

Be careful with pyramid scam
Be careful with pyramid scam

Pyramid scheme is one of the most common forms of fraud not only in the Philippines but also in many countries around the world. This is an illegal investment scam based on a hierarchical setup of offline and online marketing activities. Investors will continuously deposit money into the fraudulent organization with the goal of moving to the top of the pyramid. Ponzi schemes are one of the most famous pyramid scheme. It is an investment fraud to try to solicit money from new investors to pay existing investors. The more new investors joined, the more money to the existing investors.

How to protect yourself from financial scams in the Philippines?

Among thousands of different attractive investment offers on the market, you need to consider carefully before deciding to invest in a loan at any organization. There are many important factors that go into deciding whether a company is a reputable investment organization, but the first thing you should do is check to see if the company is registered with the SEC. SEC is the abbreviation for Securities and Exchange Commission, this is the agency that registers and supervises the corporate sector in the Philippines. A company registered with the SEC as a financial or banking enterprise also needs an endorsement from the Bangko Sentral ng Pilipinas (BSP). This will help you ensure safety before deciding to invest.

  • To check if a company is registered with the Philippine SEC, be sure to check the following information:
  • Name of person requesting investment and company name
  • Their address (both the person's and the company's address)
  • Landline phone number (not mobile number)
  • Registered with the SEC as an investment maker

If the company you plan to invest in cannot provide you with this information, absolutely do not invest with them. You should only invest in reputable companies that are on the list of companies authorized to provide investments according to SEC requirements. In addition, you should also note that the SEC does not authorize the offering of investment instruments such as stocks, bonds, commercial papers or similar financial instruments. Only licensed investors and financial companies registered with the SEC may offer similar securities.

How to protect yourself from investment scams in the Philippines?
How to protect yourself from investment scams in the Philippines?

Besides, you should also note that, although earning extra money is necessary, there is no free lunch. Trust your intuition and always be cautious of investment offers that you find too attractive. You need to firmly grasp the information about this company before giving them your money. Besides, you can also check information about the company on their official website and social networks to see if this is a reputable company. Reputable companies will often have the following factors:

  • Transparency and clarity about interest rates, conditions/procedures in investment contracts
  • Publicly, fully post and agree on fees, including surcharges
  • Has been operating for many years in the financial market
  • Cooperate with many other financial institutions that are also highly reputable in various fields
  • There are many branches nationwide
  • Achieving achievements and awards in specialized fields of activity