AMLC flags P1.5-billion transactions related to online child sex abuse

THE ANTI-MONEY Laundering Council (AMLC) flagged over P1.56 billion in suspicious transactions related to the online sexual exploitation of children in the past three years.

In a study, the AMLC said suspicious transaction reports (STRs) related to the online sexual abuse and exploitation of children (OSAEC) reached a total of 182,729 in the three-year period from 2020 to 2022.

In 2022 alone, the number of OSAEC-related STRs jumped by 35.2% to 92,200 from 68,214 in 2021. The value of the STRs, however, fell by 52% to P478.28 million in 2022, from P996.7 million in 2021.

“The growing demand and availability of child sexual exploitation materials especially during the pandemic has exacerbated what is already a serious problem in the country,” the “dirty money” watchdog said.

AMLC said the pandemic and subsequent lockdowns increased the reliance on online services. “Unfortunately, it also heightened the risks of cybercrime, particularly child sexual exploitation,” it added.

Nearly all (94.47%) of the STRs were filed under “child pornography” from July 2020 to December 2022.

AMLC also noted that the bulk (87.52%) of STRs involved remittances. Foreign remittances accounted for 81% or P751.36 million of the transactions.

“This suggests that the majority of child pornography-related transactions in the Philippines are cross-border in nature,” the AMLC said.

Since 2015, the top country source of OSAEC-related remittances was the United States, accounting for half of all remittances. From July 2020 to end-2022, there were 67,571 transactions involving remittances from the US worth P413.5 million.

Other sources of remittances were the United Kingdom, Australia, Canada, Saudi Arabia, Germany, Japan, Singapore, France and the Netherlands.

AMLC noted that Cebu was the top destination of OSAEC-related proceeds from international sources, in both STR volume and peso value. From July 2020 to end-2023, remittances to Cebu made up 13,123 STRs worth P65.68 million, followed by Pampanga (9,984 STRs worth P62.71 million), Cavite (5,489 STRs worth P34.07 million) and Bulacan (5,205 STRs worth P30.87 million).

Meanwhile, some OSAEC-related remittances came from different regions in the Philippines. Remittances from the province of Cavite made up 9,260 STRs, accounting for 59% of the total domestic remittances. Other domestic sources of OSAEC-related remittances included Cebu, Pampanga, Negros Occidental, and Caloocan City.

In terms of value, Davao Del Sur accounted for 31.5% of the overall OSAEC-related STRs with P21.06 million, followed by Cavite, Cebu, Davao del Norte, and the City of Manila.    

Cebu was the leading domestic destination of OSAEC-related proceeds, followed by Pampanga, Leyte, Bulacan and South Cotabato.

Money service businesses (MSBs) were the preferred method for transferring funds intended for child pornography since 2015. Banks came in second and were used for high-value transactions, followed by e-money issuers.

“The widespread availability of MSBs in most places, even in remote rural areas, makes them the preferred choice for OSAEC-related transactions. Relatively, MSBs are the most common means of transmitting small-ticket remittances both locally and abroad,” the AMLC said. 

Covered persons are required to declare their reasons for filing a specific STR. This is either by identifying a specific crime linked to the transaction, or identifying a suspicious circumstance observed in a client’s behavior or activity, AMLC said

The majority (73%) of these STRs were reported to the AMLC as a result of internal screenings and investigations of client transactions. The rest of the reports were based on AMLC referrals.

“Past studies made the country’s law enforcement agencies more aware of these crimes. However, the prevalence of child sexual exploitation continues to climb, thus, necessitating tighter monitoring, early detection and prevention of these kinds of transactions,” the AMLC said.

More stringent reporting, continuous collaboration with government bodies and law enforcement agencies, maintenance of an OSAEC watchlist or a database of offenders, and promoting awareness are among the AMLC’s recommendations in addressing child exploitation in the country. — Keisha B. Ta-asan