Published by the Visayan Daily Star
Editor-in-Chief & President
Bureau Chief, Dumaguete
MAJA P. DELY
|CARLOS ANTONIO L. LEONARDIA
A report by the global Tax Justice Network that measures financial secrecy ranked the Philippines 40 th out of 112 countries and jurisdictions covered.
The country garnered a “secrecy score” of 65 percent in the 2018 Financial Secrecy Index, placing it among the upper third of countries in terms of financial secrecy. Scores of 31-40 percent were deemed “moderately secretive” while 91-100 percent was considered “exceptionally secretive.”
The Tax Justice Network said “the secrecy score of 65 percent has been computed as the average score of 20 key financial secrecy indicators.”
The Philippines scored 50 percent in banking secrecy, 38 percent in trust and foundation registers, 100 percent in recorded ownership, 50 percent in other wealth ownership, 100 percent in limited partnership transparency in the financial secrecy indicators.
In terms of legal entity transparency, the country scored 100 percent in all indicators, namely public company ownership, public company accounts, country-by-country reporting, corporate tax disclosure and legal entity identifier. As for integrity of tax and financial regulation, tax administration capacity scored 88 percent; consistent personal income zero; avoids promoting tax evasion zero; tax court secrecy 100 percent; harmful structure 25 percent and public statistics 50 percent.
The report was released to confront offshore secrecy and the global infrastructure that created it and it aims to identify as accurately as possible the jurisdictions that make it their business to provide offshore secrecy. “Financial secrecy is a key facilitator of financial crime and illicit financial flows, including money laundering, corruption and tax evasion. Jurisdictions who fail to contain it deny citizens elsewhere their human rights and exacerbate global inequality,” the Tax Justice Network said.
Financial secrecy benefits the rich and the powerful that have secrets to hide. The Philippines remains in the upper third of financially secretive countries because such our public officials somehow value that secrecy even if the global trend is towards greater financial transparency.
Despite public pronouncements supporting transparency, often punctuated by dramatic but often useless signing of “bank waivers” to make the gullible public believe that they are not hiding ill-gotten wealth, our government officials that have much to benefit from the protections provided by our antiquated bank and financial secrecy laws have not done to increase and promote its transparency.
Why does our country continue to value this secrecy that enables illicit financial flows?*