Financial Transparency Coalition

The Philippines has made significant progress on its quest to confront corruption and tax evasion under the guidance of President Aquino. However, a new report by Global Financial Integrity shows one important—and growing—component of the problem is trade mispricing, specifically import under-invoicing, and its role in facilitating tax evasion in the Philippines. In June 2010, Benigno Simeon Cojuangco Aquino III assumed his position as the 15th President of the Philippines. As a Senator, before his election to the Presidency, Aquino pursued an anti-corruption agenda. For example, Aquino contributed to the Preservation of Public Infrastructures bill—which raised standards in public infrastructure...

According to an upcoming report that estimates the magnitude of illicit money leaving developing countries, the Philippines lost US$142 billion between 2000 and 2009. The amount of illicit money that left the economy puts the Philippines in the top 15 countries in outflows during the period. The report, titled Illicit Financial Flows from Developing Countries Over the Decade ending 2009, will be published by Washington, DC-based research group Global Financial Integrity on December 15.

WASHINGTON, DC – The illicit mispricing of trade cost the Philippines US$114 billion from 2000-2009 with total illicit outflows over the decade due to crime, corruption and tax evasion amounting to US$142 billion, finds a forthcoming report from Global Financial Integrity (GFI)—a Washington-based research and advocacy organization. The study,Illicit Financial Flows from Developing Countries over the Decade Ending 2009, which is embargoed for publication until Thursday, places the Southeast Asian nation in the top fifteen victims of illegal capital flight world-wide. Sarah Freitas, a GFI Economist who co-authored the report with GFI Lead Economist Dev Kar, leaked the news...

I am rarely surprised when those who are not economists make egregious economic errors. I am only moderately surprised when those errors are in the Financial Times. I suppose I should get used to it. Here’s a little basic economics. Economists, whether talking about banking or housing, trees or oil, always follow a set of fundamental principals. These include very basic ideas. For example, when conducting cost-benefit analysis, count the entire range of relevant benefits and costs. Say you want to do an economic analysis of a project to build a bridge. You count all the costs—labor, materials, etc.—and all...