The Philippine economy could lose as much as P603 billion annually to digital fraud without stronger safeguards against mule accounts, deepfakes and account takeovers, according to a joint whitepaper by IDfy Philippines and CIBI Information Inc.

The report, “Mule Hunting: Are We Chasing Ghosts?,” estimated the potential loss at nearly 3 percent of the country’s gross domestic product (GDP), highlighting the economic risks posed by the rapid expansion of digital payments.

The study analyzed Bangko Sentral ng Pilipinas data showing P24.74 trillion in combined transaction flows through PESONet and InstaPay in 2025. Of this amount, about P1.088 trillion was considered exposed to digital fraud, with 55.4 percent linked directly to authorized push payment scams and account takeovers that rely on mule accounts to move stolen funds.

The report said the Philippines’ rapid digital adoption has created vulnerabilities that organized fraud networks can exploit. Retail digital payments reached 52.8 percent in 2023, exceeding the government’s 50-percent target three years ahead of schedule.

Yet official cybercrime reporting remains below 2 percent, allowing fraudulent accounts to remain active for extended periods. The whitepaper cited data indicating that 60 to 70 percent of mule accounts involve voluntary participants, including individuals who sell or rent verified bank and e-wallet accounts for P500 to P5,000. The rest are reportedly obtained through coercive schemes such as romance-investment fraud and fake remote-work offers.

The report also pointed to the Anti-Financial Account Scamming Act and BSP Circular 1213, which increase financial institutions’ responsibility for fraud losses and restrict the use of SMS and email one-time passwords for high-risk transactions.

IDfy Philippines Country Head Raghuraman Chandrashekhar said financial institutions need multiple layers of protection rather than relying on a single security measure.

“No single institution can close this gap alone. What works is layering device intelligence, real-time AI transaction monitoring, and biometric verification into a unified defense stack,” Chandrashekhar said.

The report recommended combining fraud-intelligence data sharing, AI-based transaction monitoring, device binding and server-side biometric authentication to strengthen defenses against increasingly organized digital fraud networks.