At least two percent of the global Gross Domestic Product was lost due to increasing cases of online fraud, phishing, and scams, Senator Mark Villar said Monday.
Villar, presiding over the hearing by the Senate Committee on Banks, Financial and Institutions and Currencies, lamented that the proliferation of online scams threatened not only the potential of online banking but also the stability of the banking system and the hard-earned money of the Filipino people.
"While digitalization and the widespread use of digital finance opened opportunities for the banking sector, it is also apparent that opportunists also devise new methods to take advantage of this emerging financial market," Villar said.
While there's an increasing number of Filipinos using online payment platforms, Villar noted that crimes related to digital financial transactions are also growing.
"A significant number of Filipinos have been targeted by digital fraud attempts and a portion of them eventually fall victim to it," he said.
The Bangko Sentral ng Pilipinas said it has received more complaints regarding online banking transactions compared to those related to using Automated Teller Machines and credit cards, among others.
In fact, the Anti-Money Laundering Council reported a rise in suspicious transactions in 2020 comprising acts of phishing, skimming, and transactions related to money mules.
The Security Exchange Commission likewise noted a significant rise in complaints related to online fraud committed by online lending platforms.
Villar said as these scammers take advantage of their victims, they also rattle their victims' trust in the country's banking and financial institutions.
"Trust, being the currency of the banking system, must be well-earned. Given the proliferation of online fraudsters, it is imperative that we strengthen our efforts to keep scammers at bay," he added.
Among the existing laws aimed at fighting online bank fraud include Republic Act 11765 or Financial Products and Services Consumer Protection Act; the RA 11934 or Subscriber Identity Module (SIM) Registration Act; and RA 10175 or Cybercrime Prevention Act of 2012.
Villa said as criminal elements adapt to legislation to perpetuate fraud, hence, "there is a need to legislate new laws to keep them off track" such as the proposed Anti-Financial Account Scamming Act.
"This measure will reinforce and earn back the public's trust in our financial institutions," he said.
The number of phishing attacks in the Philippines during the first half of 2022 already surpassed the number of attacks at over 1.8 million detected compared to 1.34 million attacks during the entire year of 2021.
Villar described the spiking cases of online scams as "extremely concerning."
This, as data from Kaspersky Security Network revealed that cases of financial phishing attempts in the Philippines from February to April 2022 were highest in Southeast Asia.
Villar emphasized that the Anti-Financial Account Scamming Act or AFASA will evidently deal with cases of online fraud and will provide a regulatory framework that penalizes scammers as well as entails safeguard measures to protect Filipinos and their financial accounts.
"Because of the lack of a regulatory framework that penalizes these scammers, there are and there will be more victims in the foreseeable future," he added.
AMLC executive director, Matthew David, said they required banks and payment operators to maintain the 'Know Your Customer document' for their system and store a system that could verify the identity of the clients, including the bank account owners.
"They are required to do some verification in order to make sure the true identity of the customers," David added.
The public committee hearing was followed by an Executive Session due to the confidentiality and sensitivity of the issues and information that will be discussed.
Villar said the executive session was conducted to ensure that law enforcement measures being undertaken to apprehend and prosecute scammers will not be disrupted.
