More than half of suspicious money flowing into the Philippines from 2021 to the first half of 2024 was linked to child exploitation, with the United States (US) emerging as the primary source of these illicit funds, according to the Anti-Money Laundering Council (AMLC).

AMLC, the country’s central financial intelligence unit, said in its latest threat assessment that it flagged over 155,600 inward remittance transactions totaling ₱3.42 billion as suspicious under the Anti-Money Laundering Act (AMLA).

“Over half (53 percent) of the transaction volume was tied to child exploitation,” said the report, published on Feb. 12. This was followed by swindling at 29 percent and child pornography at over a tenth of total volume.

The US accounted for exactly half of total remittance volume, making it the leading source of these inflows. Australia and the United Kingdom (UK) followed, accounting for 7.4 percent and 6.8 percent, respectively.

In terms of value, swindling accounted for the largest share at ₱2.5 billion. Swindling is classified as a sub-predicate crime under the “investment scams and estafa” category defined in the Philippine Revised Penal Code. The global anti-money laundering watchdog Financial Action Task Force (FATF) categorizes this as fraud.

Suspicious transaction reports (STRs) linked to swindling covered various schemes, including fake check deposits, unauthorized transfers, hacked accounts, fake online sellers, investment and cryptocurrency fraud, “budol-budol,” and extortion cases such as sextortion.

Fifteen percent of the total value was tied to child exploitation, while 3.5 percent involved cyber-enabled crimes such as phishing, business email compromise, account hacking, and online fraud.

Germany and the US accounted for nearly two-thirds of the total value, at 33.8 percent and 30.5 percent, respectively, while the UK accounted for five percent.

Meanwhile, AMLC identified nearly 1,600 suspicious outward transactions totaling ₱2 billion. One-third were tied to swindling, more than a fifth to child pornography, and 13 percent to child exploitation. The top destinations were the US at 15.1 percent, the United Arab Emirates (UAE) at 6.8 percent, and China at 5.7 percent.

By value, most suspicious outward funds were linked to cyber-enabled crimes (69.6 percent), followed by swindling (27.2 percent) and illegal drugs (1.1 percent).

“It was found that banks accounted for more than half of the volume and aggregate value of transactions, making them the most utilized financial channel, particularly for large-value transactions,” the report said.

AMLC said the assessment analyzed approximately 1.3 million suspicious transaction reports totaling ₱35.5 billion from 2021 to mid-2024 to evaluate the Philippines’ exposure to illicit financial flows, terrorism financing, and related crimes.

Cyber-enabled crimes and swindling were identified as the primary drivers of illicit financial flows, with swindling accounting for ₱14 billion, followed by cyber-enabled crimes at ₱8.1 billion, and graft and corruption at ₱4.2 billion.

AMLC warned that illicit financial flows remain a major threat to financial integrity, citing estimates from the United Nations Office on Drugs and Crime (UNODC) that two to five percent of global gross domestic product (GDP) is laundered annually.

Despite the Philippines’ exit from the FATF grey list in early 2025, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. acknowledged that risks remain.

“To be honest, we have a risk of returning to the grey list. Although we’re doing what we can to prevent that,” Remolona said early this month.