Organized Crime

Organized crime generates billions of pesos annually for the Philippine economy through extensive operations in drug and human trafficking, kidnapping, bank robbery, and smuggling. These criminal syndicates thrive through complex networks of protection from corrupt officials at all levels of government, allowing them to operate with near impunity. They are able to extensively exploit community and family ties to recruit members and conceal illicit activities. Billions of pesos are generated annually through these criminal operations, comprising a significant portion of the country's GDP.

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Organized Crime

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arthur guil-an

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Organized crime is a multibillion-peso industry in the Philippines, its

earnings accounting for a substantial portion of the country's gross national

product.

WHOEVER said crime does not pay has certainly got it wrong.
Organized crime is a multibillion-peso industry in the Philippines,
its earnings, by conservative estimates, equivalent to 10 to 20
percent of the Philippine gross domestic product, or anywhere
from P300 to P600 billion every year.

The most successful criminals are part of well-organized and

well-funded syndicates that use their connections with police,
military, and civilian officials so they can operate with virtual
impunity. Despite occasional high-profile arrests and killings of The body of Pentagon leader Faisal
crime bosses, the syndicates thrive, often with the authorities Marohombsar lies sprawled on a wooden
cart after he was cornered by the police in
turning a blind eye while lining their pockets with illicit proceeds Cavite.
from criminal activities.

As shown by the following reports on two notorious criminal gangs — the Pentagon and the Kuratong
Balaleng — the syndicates are nurtured by a complex layer of protection involving police and local,
even national, officials. So tight are these gangs' connections to the authorities that even when their
top leaders are arrested, they are often allowed to escape, as in the case of the notorious Pentagon
boss Marahomsar Faisal and many others .

The gangs also use kinship, community, and ethno-linguistic networks to get their recruits and to
provide a cover for their activities. The Pentagon gang thrived in Central Mindanao, drawing support
from the almost-tribal closeness of Maguindanaoan clans. Similarly, the Abu Sayyaf exploited kinship
and community ties among its predominantly Tausug and Yakan following in Southwestern Mindanao.
The Kuratong Baleleng, meanwhile, is deeply rooted among the Christian, Cebuano-speaking migrant
underclass in northwestern Mindanao.

Several of the gangs also draw their membership from rogue elements of rebel groups like the Moro
National Liberation Front, the Moro Islamic Liberation Front, and the New People's Army. After all,
gangs thrive on the kind of camaraderie and trust that bind comrades in the battlefield. Both the
Pentagon and the Abu Sayyaf gangs, which specialize in kidnapping, bombings, and extortion, were
formed from disgruntled chunks of the MNLF and the MILF. The Red Scorpion Group, which was into
kidnapping and bank robberies, was made up of former NPA guerrillas. The notorious P50-Million
Gang, named after the amount of ransom that its members demand from kidnap victims, has an ex-
NPA commander in its ruling council, which is headed by a former bodyguard of an Ilocano politico.

The syndicates are organized in various ways, but most are divided into secret, compartmentalized
cells, each with a specific function (e.g. surveillance, intelligence, operations, money laundering).
They are headed by either one individual or a small group. In many instances, the crime bosses are
local toughies who went big time by staging daring heists and ruthlessly cutting down rivals, Mafia
style. In other cases, as in some kidnap and bank-robbery gangs, they are former policemen or
soldiers who use their arms and their connections with the law for criminal ends.

It's hard to say how much money the gangs make: criminal syndicates don't report their activities and
they don't pay income tax. But for sure the pickings are huge. The biggest money earners are drugs,
kidnappings, bank robberies, and smuggling.

1
The illegal drug trade alone, according to estimates by the police and the U.S. State Department's
International Narcotics Statistics Report, generates more than $5 billion (some P251 billion) a year,
equivalent to about a third of the government's annual budget and eight percent of the country's GDP
in 2001. Most of that — about $4 billion — is accounted for by shabu or crystal methamphetamine
hydrochloride, which is mostly smuggled from China or manufactured here in clandestine laboratories,
some of them in the heart of otherwise respectable, middle-class neighborhoods in Metro Manila.

The cost of producing shabu is ridiculously low, and the PNP estimates that dealers make P2,000 for
every P10 they invest. The market, currently about 1.8 million Filipino drug users, is also an
expanding one.

Kidnappings are another source of easy cash. This year kidnap-for-ransom gangs netted some P212
million in payments, and that's only for the reported cases. Anti-crime groups estimate that kidnappers
were paid P1.4 billion in the last 10 years for the 124 kidnapping incidents that were reported to them
during that period.

Bank robberies are another lucrative income source for criminal syndicates. PNP statistics show that
there were 37 bank robberies in 2002, compared to only 27 the previous year. The number of
armored van robberies saw a 60-percent increase from 27 incidents in 2001 to 44 last year.

Smuggling — of everything from garments to rice to handguns — is perhaps the most profitable of all.
The Federation of Philippine Industries (FPI) claims that close to 80 percent of consumer goods sold
in the country are smuggled. FPI chairman Meneleo Carlos Jr. said that some 50 percent of industrial
goods are likewise smuggled.

Newspaper reports give some indication of the scale of the problem. Last year, $333,000 worth of
smuggled Thai rice was seized while being unloaded at the Butuan City port. The rice, however,
disappeared while it was in police custody and the vessel that brought it was allowed to leave the port
without being cleared. Butuan City's Philippines Coast guard district commander lost his job
afterward, but that was the last heard about the incident.—Sheila S. Coronel