Money laundering and other financial crimes would remain unchecked if Ferdinand Marcos Jr. wins the presidency, such that the Philippines could stay in the “grey list” of the US Financial Crimes Enforcement Network (FCEN) that regulates the flow of US currency around the globe.
Investors, creditors, and financial institutions operating in the country feared that if Marcos Jr. wins the presidency, they can say goodbye to the financial reforms needed to get the country out of the grey list and then blacklisted to the detriment of OFWs.
Their worries include the Marcos family’s history of corruption, non-filing of tax returns, tax evasion and money laundering.
The UK-based Capital Economics declared that the financial standing of the Philippines “is unlikely to improve under a Marcos presidency and could easily get worse.”
Pantheon Macroeconomics, another UK-based think tank, said a victory of Marcos Jr. in the 2022 elections would “carry significant risk.”
They cited Marcos Jr.’s “far from encouraging” governance record and the economic program that he discusses in the campaign.
It was also noted how Marcos Jr. flip-flopped on disclosing his statement of assets, liabilities and net worth and how, as a senator in 2012, he voted for a deficient Anti-Money Laundering Law.
Nomura Global Research viewed Marcos Jr. as lacking national political experience, not being market-friendly, and lacking fiscal discipline, while Fitch Solutions Country Risk and Industry Research warned that a Marcos Jr. presidency is “posing risks of increased authoritarianism.”
To toughen anti-money laundering, LexisNexis Risk Solutions Asia Pacific Managing Director Bharath Vellore proposed a three-pronged approach: legislation; supervision; prosecution. That would go against the self-interest of the Marcos family.
Marcos Jr. has been convicted of tax evasion, specifically the non-payment of taxes from 1982 to 1985.
In October 2012, a US Court of Appeals for the Ninth Circuit upheld a contempt judgment against Marcos Jr. and his mother, Imelda, as executors of the Ferdinand E. Marcos estate. This was in relation to a human rights class suit against the dictator.
Marcos Jr. and Imelda violated an injunction that prohibited them from hiding the assets of the Marcos estate.
The judgment amounted to $353.6 million, which the Marcoses have refused to pay. The Court can issue a warrant to compel the Marcoses to appear in order to comply with the judgment.
During the Duterte administration, in 2018, the Sandiganbayan convicted Imelda Marcos on seven counts of graft for laundering $231 million in Swiss accounts.
She named herself and her children as the beneficiaries of the Swiss accounts.
In 2016, investigative journalists revealed the Panama Papers, which contained information on shell corporations that the ultra-rich, including Filipinos, to secrete their assets and taxes.
The leak included the listing of Marcos Jr.’s sister Irene Marcos Araneta and her husband Gregorio Araneta III as officers of Orient Wind Development Limited, registered in the British Virgin Islands, a tax haven.
“Although shell corporations are not illegal in and of themselves, their anonymity and lack of transparency mean that they can be used for tax evasion, fraud, and evading sanctions,” said Bloomberg Tax.
All these lead to the conclusion that Marcos Jr. and family lack transparency in disclosing assets and taxes.
Marcos Jr. does not have the credibility to fight money laundering and tax evasion. Marcos Jr. does not have the political commitment to pursue the financial reforms needed to remove the country from the grey list.
The financial institutions said the US is the largest source of overseas Filipino remittances and financial transactions from other countries that use the US currency also flow to US financial centers.
They are all subject to the tight scrutiny and discipline of FinCEN.
The worst scenario, they said, is a Marcos Jr. presidency rolling back the previous measures to fight financial crimes. This is plausible, for the Marcoses want to preserve their ill-gotten wealth, which the government has yet to fully recover.
Such probability would put the Philippines on the FATF black list.
That means the global community will be called on “to apply counter-measures” against a country violating the FATF standards.