ABSTRACT

This chapter offers an estimate of the total volume of unreported foreign exchange flows from the Philippines. Using a balance of payments-consistent procedure, it is estimated that the total volume of unreported flows for the period 2000–2013 was US$612 billion. By any yardstick, the figure is a large amount of “lost” resources that could have been used in the Philippines to generate additional output and jobs. The chapter then argues that weaknesses in the governance of finance in general as well as in the capacity to direct investments into productive domestic endeavors in particular contribute to the occurrence of unreported flows. To reverse the situation, a reapplication of capital flows management techniques is indispensable, thereby facilitating the internalization of resources and their conversion into desired outcomes.