Wirecard a Transparent Opportunity for the Philippines

Euromoney, July 7 2020

The country’s response to the scandal is a chance to show good governance

One of the stranger elements of the Wirecard scandal has been the involvement – or, apparently, lack of involvement – of the Philippines in handling much of the troubled payment processor’s disputed funds.

It’s tempting to think that this is damaging for the reputation of the Philippines and its financial services industry. And it might be. But it’s also possible it may prove the country’s systems to be more resilient than they have been given credit for.

A brief primer, for those who haven’t followed the intricacies of Wirecard’s alleged deceit, as unearthed by the FT’s investigations team: Wirecard, the Germany-based payments processor, claimed to have held €1.9 billion of funds through two Philippine banks, BDO Unibank and Bank of the Philippine Islands. It now appears that the money never existed, and that Wirecard’s auditors, EY, were deceived by fraudulent documents.

The temptation here is to think of a certain emerging-market grubbiness in all this: that, if you wish to deceive auditors and give the illusion of having funds you don’t have, you turn to emerging Asia and set your scam there.

But let’s look at the response in the Philippines.

Almost immediately after news broke of the scandal, pretty much every relevant arm of the country’s financial services sector went into action and reported openly about what they believed had happened, promising investigations at every level.

Attorney Mel Georgie Racela, head of the Anti-Money Laundering Council, immediately announced a probe looking at local partner businesses of Wirecard in the Philippines and has given interviews to local and international press, including Euromoney, on progress and direction.

Read the rest of the article ere: https://www.euromoney.com/article/b1md69nrf0hjq2/wirecard-a-transparent-opportunity-for-the-philippines?copyrightInfo=true