MANILA, Philippines - The country’s stable economic growth has opened doors for many businesses, which unfortunately includes investment scams.
The Securities and Exchange Commission (SEC) said securities fraud has peaked anew in the Philippines on the back of the country’s healthy economy.
In a chance interview, SEC chairperson Teresita Herbosa told The STAR the number of fraudulent companies has not only been rising this year but it has already grown to new heights compared to the previous years.
“It has really become more prevalent, just look at the number of advisories we have on our website. It has become prevalent because the economy is doing well. People have a lot of savings and they don’t want to just put their money on traditional accounts. A lot of them want their money to earn also and most of us have this get-rich-quickly mindset,” Herbosa said.
According to Herbosa, the number of investment scam cases has been increasing particularly in the provinces where the people are easy prey because most lack financial literacy.
Herbosa added illegal investment activities have also taken a step further given the popularly of the Internet and social networking sites.
The SEC chair, however, said what is most worrying is most people these days are aware of the scam but are still opting to join and gamble their hard-earned money.
“In one investigation we were conducting, we found out that some of the victims themselves know it’s a scam but they want to do it anyway because they want to be the first one to invest in the hope that they will be able to get a return, never mind the friends and relatives they recruit who are at the bottom of the pyramid,” Herbosa said.
The SEC said it has been intensifying its efforts to warn the public against fraudulent business practices as investments scams are again on the rise.
In 2012, a P12-billion investment scam by Pagadian-based Aman Futures Group Philippines Inc. was exposed, defrauding thousands of politicians, professionals, businessmen and employees.
“The case that you can really file with us is really for selling investment products without a secondary license because it’s not sufficient that a corporation is incorporated and registered with us. You have to see if they are also licensed to sell securities to the public and we’re the ones who can say if it’s a legitimate operation,” Herbosa said.
“But right now, it’s really getting worst. Some people even doubt the veracity of our advisories. Some fraudulent companies, meanwhile, come out with a fake one saying that we’ve lifted our advisory against them,” she added.
The SEC said business entities are not authorized to solicit investments from the public without securing prior registration and license or permit from the Commission as required under Section 8.1 of the Securities Regulation Code.
Herbosa said the country’s corporate regulator would continue to step up its efforts to stop illegal investment activities and continue its information campaign about them.
“The only effective way of doing it is to disseminate information, educate people that no way will you ever beat the scammers because you will never come out ahead. It’s like gambling. We just have to keep warning people about that,” she said.
“The Bangko Sentral ng Pilipinas who is also partnering with us in this financial education campaign has a very good financial literally project in which we go all over the country and then we also have to target the specific audience like the spouses of overseas Filipino workers. Then we have to go to schools so young people would already know about dangers of putting their money in these kinds of operation. So it’s really a continuing effort,” Herbosa added.