Why do Filipinos frequently become investment scam victims?

Chances are, if you are Filipino, you’re mom has warned you to be wary of investment scams and budol-budol gangs, after your Tita Linda allegedly got scammed out of hundreds of thousand pesos as investment for a said company, with the promise of millions of pesos, in return, of course.

Or, if not, you’ve probably heard of the hundred million-peso investment scam of the Kapa Ministry that is currently being investigated by the government. This seems to be the hottest investment scam under the media’s limelight as of current. (1)

The point is, Filipinos are no strangers to being investment scam victims. And it even seems like these cases of investment scams are happening more than they should. But why are Filipinos the frequent victims of investment scams? Why are Filipinos so gullible to be victims?  Why is it running rampant in our country that Senator Lito Lapid found it necessary to file a bill including investment scams as a form of economic sabotage? (2)

Filipinos want a better life

According to Forbes, one telltale sign that someone is a potential investment scam victim is if they view money and wealth as success. (3)

Filipinos are no stranger to this “more money, happier life” mantra. As this is what we are often told, growing up as kids. “Study hard so you get a good job and have enough money in the future!” or “Make more money and more people will like you.” are two ‘encouragements’ that we have most often heard. (4)

Filipinos want a better life. In fact, in a joint survey conducted by the Philippine Competition Commission and National Economic Development Authority in 2015, out of the 10,000 respondents, 79% aspired for a ‘simple, comfortable life’, 16% want an ‘affluent life’, while the remaining 4% dream of the life of the crazy rich. (5)

And the easiest way that they can achieve this is to jump on investment scams that are being offered to them. Investment scams have the promise of a larger return of the investment — mostly in millions of pesos, sometimes even billions which is simply unbelievable. (6)

But the Filipino doesn’t think that it’s too good to be true. Instead, the Filipino is blinded by the promised amount with tens of trailing zeroes.

Filipinos lack financial literacy

Another reason why Filipinos fall for such investment scams is that most Filipinos lack the proper financial knowledge and financial education that is needed to combat such scams. (7)

While Filipinos often hear scam stories in the radio, the news or even from others (as there seems to be no shortage of them), Filipinos lack enough knowledge to recognize that they are actually being presented a scam.

In fact, after the discovery of another investment scam case in June 2018, wherein helpless investors were defrauded of over 900 billion pesos after investing on an alleged bitcoin-based investment, Senator Sonny Angara has heavily stressed the importance of improving the financial literacy of Filipinos to better guard themselves against these scams and enable them for inclusive growth. (8)

It turns out, as it stands that only 2% of Filipino adults are financially literate enough to answer all questions correctly about financial literacy. This is according to a World Bank study that was cited by the Banko Sentral ng Pilipinas. (9)

That is alarming low! And because of this financial illiteracy, many Filipinos often fall victims in investment scams. This is because they don’t know how real investments should work. They don’t know if any part of the contract that they are being forced to sign is illegal. They don’t know how to check if this particular person offering them the investment is a fraud or not.

Moreover, in the first place, any financial literate Filipino worker would not trust a random stranger, suddenly befriending them and offering them to invest on a company, and trust them with their money. (10)

They would know better and have the better knowledge of where to invest your money properly, for guaranteed return of investment, and not on a random stranger’s online business whose details seem to be incomplete and sketchy. (10)

But this problem of financial literacy is slowly being changed. With the implementation of the K-12 curriculum, one of the exit choices for senior high school is to start a business. That’s why Entrepreneurship is now being taught in high school. Lessons regarding investment scams are included in the official curriculum guide. (11)

Hopefully, this inclusion of Entrepreneurship as a subject that is taught in senior high school is the one step that we need in order to close the gap between financial literacy and financial illiteracy.

Some Filipinos take advantage

While there are no studies to back up this certain observation, the main reason why Filipinos become victims of investment scams is that their fellow Filipinos are scammers who take advantage of them.

Part of Filipino culture is being accomodating, hospital and helpful. That’s why if a stranger comes knocking at our door, bawling their eyes and asking for help, it is difficult for us to turn our backs away from them and not help in anyway what we can. (12)

This is a common tactic of investment scammers in the Philippines. Sometimes, it would even include manipulation of the victim’s by being re friends with them before the scam is laid out and introduced to the victim.

These Filipinos who are scammers, are the same 79% of the 10,000 respondents who said that they aspire for a ‘simple, comfortable life’. It’s just that the easier way for them out of poverty is to scam their fellow Filipinos. (5)

And well, most certainly, these investment scams often turn up to be very profitable. Since these are investment scams, they fall under the more ‘big time’ financial scams than others, since the farce is that they victims are investing on a certain company. That’s why each investment needs to be big. (13)

While there are different types of investment scams, the most common ones include a large amount of money as investment and different tactics in order to lure in more victims. Some of these include the ever famous “Open minded ka ba?” that is the gateway line to a pyramid scam. (14)


In conclusion, Filipinos are frequent victims of investment scams because they aspire for a better life, that’s why they will jump on any opportunity that promises huge amounts of money. They are also financially illiterate, making it impossible for them to second-guess an investment scam that is being introduced to them. Lastly, it’s because of the helpful Filipino culture that makes them vulnerable to individuals with hidden interests.


1. https://www.rappler.com/newsbreak/iq/232805-explanation-how-kapa-community-ministry-took-advantage-investors

2. https://www.rappler.com/nation/234507-lapid-wants-investment-scams-be-part-economic-sabotage

3. https://www.forbes.com/sites/bobcarlson/2018/06/26/whos-a-likely-scam-victim-not-the-people-you-expect/

4. https://www.getrealphilippines.com/2012/03/filipino-attitude-towards-money-highlighted-yet-again/

5. http://nine.cnnphilippines.com/news/2016/03/30/neda-ambisyon-2040-survey.html

6. https://news.abs-cbn.com/business/07/21/15/how-pinoys-lost-billions-pesos-these-investment-scams

7. https://opinion.inquirer.net/45671/guarding-against-investment-scams

8. https://www.pna.gov.ph/articles/1031694

9. https://business.inquirer.net/251498/many-filipinos-seen-still-financially-illiterate

10. https://www.thehindubusinessline.com/opinion/fight-frauds-through-financial-literacy/article22995904.ece

11. https://www.officialgazette.gov.ph/k-12/

12. https://www.reference.com/geography/filipinos-known-hospitable-be883554ddaaa2e8

13. https://www.saveandinvest.org/protect-your-money-spot-and-avoid-fraud/types-investment-fraud

14. https://www.reddit.com/r/Philippines/comments/8wm7cd/openminded_ka_ba_sa_business_people_of_rph_care/

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