Philippines risks losing P603 billion yearly to digital fraud – report

MANILA, Philippines — The Philippines could lose an estimated P603 billion annually to fraud involving mule accounts, according to a joint report by IDfy Philippines and CIBI Information Inc., which urged financial institutions to strengthen identity checks and share information on suspicious activities.

Mule accounts are bank or e-wallet accounts used by criminals to receive and move illicit funds. These may be rented or purchased from willing account holders or taken over without their owners’ consent, allowing scammers to transfer stolen money while concealing its trail.

The white paper titled “Mule Hunting: Are We Chasing Ghosts?” based its estimate on P24.74 trillion in combined transactions processed through PESONet and InstaPay in 2025. These systems allow electronic fund transfers between participating financial institutions.

The authors applied a 4.4-percent suspected digital fraud rate from TransUnion to that transaction value, arriving at approximately P1.09 trillion in potentially exposed funds.

They then applied a 55.4-percent factor, which the report attributed to emerging-market benchmarks, to estimate the portion linked to fraud schemes dependent on mule accounts. This yielded approximately P603 billion.

The figure is a modeled estimate rather than a tally of confirmed losses. Its calculation applies a suspected fraud rate to the value of payment flows and assumes that more than half of the resulting exposure involves mule-dependent schemes.

These include authorized push payment scams, in which customers are deceived into approving transfers to fraudsters, and account takeovers, where criminals gain control of another person’s account.

Beyond the estimated financial cost, the report identified gaps in information sharing that allow syndicates to move money across several institutions before the broader pattern becomes apparent.

“A mule syndicate can rapidly execute a transaction burst across multiple platforms like BDO, UnionBank, or GCash while each individual compliance team sees only a small, fractured fraction of the larger picture,” CIBI president and CEO Pia Arellano wrote in the report’s foreword.

The report said verified accounts are bought in bulk for P500 to P5,000, citing the National Bureau of Investigation.

It also cited expert estimates that 60 to 70 percent of mule accounts involve voluntary participation, while others involve people drawn into schemes such as romance-investment fraud and fake job offers.

Low reporting compounds the problem, the report said, as victims deterred by small losses or complicated legal proceedings may leave accounts used by scammers undetected and available for reuse.

The firms recommended combining transaction monitoring, checks on devices accessing financial accounts and biometric verification, such as facial authentication, with information sharing across institutions.

“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,” IDfy Philippines country head Raghuraman Chandrashekhar said.