108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS

CURRENT SITUATION OF
TRANSNATIONAL ORGANIZEDCRIME IN THE PHILIPPINES
Alberto Rama Olario*
I. INTRODUCTION
The maintenance of domestic tranquility
and order is one of the principal
responsibilities of government. To survive,
the Philippines must effectively counteract
the corrosive elements that tend to gnaw
at its foundation, as well as the insidiousforces that seek to undermine it fromoutside. Towards the first objective, thePhilippine National Police, to which I
belong, is one of the principal arms of thePhilippine government in its campaign
against lawlessness and criminality
throughout the archipelago.
For the last four (4) years under theleadership and administration of President
Fidel V Ramos, the Philippines had beensteadily rising in terms of economic
progress and stability, making it earn the
distinction of being one of the fast-rising
economic dragons in the Asia-Pacific(through the President’s National Strategic
Action Plan dubbed as “Philippines2000”).It has likewise achieved lasting
peace among all Filipinos, as evidened in
the most recent signing of the peaceagreement with our Muslim brothers in
Mindanao and the subsequent creation of
the Southern Philippines Council for Peaceand Development (SPCPD),which ended
the decades-old rift.

far achieved, the maintenance of peace andorder must be graranteed. Towards thisend, the Philippine National Police (PNP)
created a parallel National Strategic Action
Plan dubbed “POLICE 2000” which
envisions the PNP as a professional,
dynamic and highly motivated police
organization. It is regarded as one of themost credible institutions in the country
today and ranked among the best in Asia.
In effectively meeting our mission andvision to serve our country, we in thePhilippine National Police believe that inorder to efficiently subdue all destructivee l e m e n t s i n o u r s o c i e t y, u t m o s tinternational cooperation with ourneighbors must be made. These elements
include international syndicates who
operate in our country as well as yours.
There should definitely be a continuing andharmonious coordination among all of us
in this endeavor.
II. DRUG TRAFFICKING

To sustain the success that we have soDrug trafficking and abuse are serious
issues confronting both developing anddeveloped nations. Production, trade andconsumption of illicit drugs is a threat to
the well being of the global community,
undermining legitimate institutions,eroding social values and creating broader
economic development problems. The
Philippines is no exception in this regard.

* Deputy Regional Director Administration,
Philippine National Police-Region XIII,
Department of the Interior and Local Government,
Philippines.

For many years the fight against illegal
drugs and their abuse has been the subjectof numerous discussions at the national aswell international level. Powerful drug

171

RESOURCE MATERIAL SERIES No. 54
syndicates with their vast resources,
modern technology and information have
reduced the world into a small community
where they bring illegal drugs from one
place to another in furtherance of theirnefarious activities without regard tonational boundaries or domestic laws.
Countries affected by the problem haveadopted their respective measures, like theenactment of laws and other policies, toinclude appropriate implementation bydifferent governmental agencies andinstrumentalities. Regional andinternational coordination and cooperation
has been likewise resorted to in responseto this global problem.
According to a recent survey, drug
addiction is the second most importantcrime problem in the Philippines today. In
1992, there were only about 20,000 drug
users, which increased to an estimated 1.7
million in 1997. Out of the 17 million,
roughly 1.2 million drug users are from theyouth population. Using 5 grams per month
per drug user as an estimate, andtranslating this to money circulated due todrug use and trafficking, we have amonthly consumption of 8.5 million grams
amounting to 17 billion Philippine pesos
monthly or 204 billion Philippine pesos
annually.
There are three (3) roles the Philippines
play in the illegal drug scene. First, as a
producer, exporter and consumer ofcannabis products (marijuana). Second, as
an importer and consumer ofmethamphetamine hydrochloride (shabu)
and other regulated drugs. Third, as atransit point for heroin and cocaine. The
country’s penetrable seaports, airports andlong irregular coastline provides ideal
entry and exit points for drug smuggling
and an alternate transshipment area ofinternational drug syndicates.

172

A. Drug Situation
1. Marijuana Production
The Philippines is known as a major
producer of high-grade marijuana. It
continues to be one of the main drugs ofabuse in the country due to its availability
and low cost. Marijuana is grown in ninety
five (95) drug source barangays located innine (9) regions of the country. These areas
are the subject of our continuos eradication.
2. Methamphenamine Hydrochloride(Shabu) Smuggling.
This drug popularly known in thePhilippines as ‘shabu’ is illegally imported
by some Filipino-Chinese syndicates from
Hong Kong and Taiwan. Large supplies ofmethamphenamine hydrochloride (shabu)
continues to come from illicit
manufacturing and processing centers
within the region, particularly frommainland China (PROC). The PROC
continues to be a significant source of illicit
drugs intended for the Philippines. Hong
Kong and Taiwan remain as the staging
point of Chinese Triad syndicates financing
drug trafficking operations for smuggling
multi-kilos of shabu for the Philippines.
There are also reports that these traffickers
facilitate shabu to Pacific States and theUSA. In 1995, the PNP Narcotics Group
seized more than 200 kilograms of shabu
on different occasions. For 1996, the groupseized 300 kilograms of shabu worth 600
million pesos as a result of major operations
launched against Chinese syndicates basedin the Philippines. This does not include
the hundreds of kilos seized by PARAC andother PNP territorial units.
3. Trans-shipment Point of Heroin andCocaine
The Philippines, due to its strategic
location in Asia, is a logical choice for atrans-shipment point for heroin andcocaine. Heroin is usually shipped into thecountry from the Golden Triangle, through108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
the various airports and seaports. African
and Thai couriers with American
connections are also utilizing the postal
services in transporting drugs. In 1994, aManila-based Nigerian syndicate wasneutralized for transporting 15 kilogramsof heroin worth almost 400 million pesos,
resulting in the busting of an AmericanNigerian Connection. Another major
seizure was made in the early part of 1997,
with the arrest of a Taiwanese national fortransporting high-grade heroin worth 27
million pesos. He was arrested in acontrolled delivery operation participatedin by the PNP Narcotics Group, Bureau of
Customs, USDEA and Royal Thai Police.
Cocaine trans-shipment is being carriedout either by ship or airplane. It is believedthat the destinations of these expensive,
illicit drugs are the rich nations of Asia,
more particularly Hong Kong, Japan andTiwan. In 1995, 14 kilograms of cocaine
was seized in Central Visayas, presumablyleft in haste by unidentified Chinese
traffickers. Seizure of 14 kilograms of
cocaine was made in 1996 in the Quezon
Province.

Japan.
C. Concealment Techniques
Internationally detected modes ofconcealment are generally employed bydrug traffickers, such as:i) Ingestion, leg casts and bodywrap.
ii) Use of false bottoms of luggage,concealment in imported packages
and false cavities of furniture.
iii) Concealment in containers and air
freights.
D. Government Countermeasures
1. Legislation
In 1994, the government enacted theRepublic Act 7659 which imposes the death
penalty on certain heinous crimes and drugtransactions involving a certain degree oramount of dangerous drugs.
In 1996, the government created theSpecial Dangerous Drug Court which shalltry heinous drug cases against notorious,
big-time pushers. This will speed-up thedisposition of drug cases filed in different
courts.

B. International Drug Syndicates
1. Chinese Triads
These ethnic Chinese syndicates aremainly responsible for the smuggling of
methamphetamine hydrochloride (shabu)
into the country.
2. Nigerian Connection
These drug rings are engaged in thesmuggling of heroin from the Golden
Triangle to the USA and Europe, using thePhilippines as a trans-shipment point.
3. A u s t r a l i a n a n d Ya k u z a D r u g
syndicates
These groups are responsible for thesmuggling of Cannabis from thePhilippines to Australia, New Zealand andWith the ratification of the 1998 UN
Vienna Convention, the Philippine
National Police, particularly the Narcotics
Group, is pushing for immediate legislationof tough drug laws, i.e. legislation on asset
forfeiture, financial management and wiretapping. These laws will strengthen
prosecution and eventually, increase theconviction rate in dangerous drug cases.
2. Law Enforcement Methods
At present, the law enforcement pillarof the Criminal Justice System still adopts
the “Multi-Agency Approach” in its fightagainst the unabated drug abuse problem
in our country. The PNP, through the
Narcotics Group, contributes a major effort
in the fight against the proliferation of173

RESOURCE MATERIAL SERIES No. 54
illegal drugs, working hand in hand withother law enforcement agencies like the
NBI, EIIB, Bureau of Customs, the AFP,
other Task Forces like the PARAC and
PA C C . T h e i r r e s p e c t i v e a n t i - d r u g
operations are designed primarily toprevent and control trafficking of illegal
drugs, with an operational strategy ofsupply and demand reduction andinternational/regional cooperation andcoordination.
III. FIREARMS SMUGGLING
This particular activity is carried out by
transnational crime syndicates smuggling
US-made firearms into the country.
Philippine locally-made handguns on theother hand are smuggled to Asian countries
particularly Japan, Taiwan, and other
ASEAN countries through the employmentof middlemen tasked to ship out firearms(transported by vessels), themisdeclaration of cargo (usually consigned
to fictitious personalities) and theemployment of jettison techniques.
The modus operandi of the Smugglers
is the following:i)Firearms arrive in the Philippines
as undeclared or misdeclared
items and included with othergoods, consigned to fictitious
names and addresses;ii) Firearms can also be dismantled
into pieces and included amongmetal items or machinery parts
legally imported or exported;iii) Firearms are sometimes thrownfrom vessels at prearranged areas
some distance from the shore
where they are later picked up by
small boats and brought toundisclosed places.
Government Countermeasures :

174

i)

Liberalized Policies on Firearms
Importation: The (PNP) now
permits licensed firearms dealers
to purchase all types of firearms
from abroad. As a result,smuggling of foreign-madefirearms has considerably
decreased since they are now
available in country in commercial
quantities.
ii) L e g a l i z a t i o n o f D o m e s t i c
Manufacturing of Firearms: The
government has legalized local
manufacture in the Province ofCebu in Central Philippines. This
has resulted in the regulation andbetter monitoring of locally-madefirearms.
iii) S t r i c t e r M o n i t o r i n g o f
International Gateways: Entry
points of smuggled firearms are
now under strict monitoring by
the different Philippine law
enforcement agencies. As a result,from 1995 to 1996, a good number
have been arrested in the country
for gun-running and firearms
smuggling. Confiscated from themwere around 256 firearms ofdifferent calibers, ranging fromcaliber 38 to M-16 rifles, 1,600
rounds of assorted ammunition
and 25 seacrafts. In the Southern
Philippines, for the past year, a
total of ten (10) major arms
shipments form Sabah, Malaysia
were reportedly made, three of
which were for the Moro National
Liberation Front (MNLF) andseven for the Moro Islamic
Liberation Front (MLF).
iv) I n t e r n a t i o n a l C o o p e r a t i o n /Networking: The PNP has
developed increased international
police and USA authorities to
identify and monitor the activities
of gun traffickers, to pre-empt or
neutralize their gun-running

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
activities and to exchange
information related to syndicatedgroups. This has resulted in apositive tone.
v) Heightened Cooperation among
Philippine Law Enforcement
Agencies and Military Units: The
Armed Forces of the Philippines(AFP), the PNP and other law
enforcement agencies haveintensified intelligence
coordination to determine bigtime as well as small-time
smugglers and illegal gun
manufacturers.
vi) Firearms Amnesty: Simultaneouswith the implementation of
OPLAN PAGLALANSAG (orOPLAN “DISMANTLE”), thegovernment offers amnesty to all
holders of loose or unlicensed
firearms.
IV. SMUGGLING OF ILLEGALMIGRANTS
In the Philippines, the Bureau of
Immigration and Deportation has primary
responsibility for the administration andenforcement of immigration, citizenshipand alien admission and registration laws.
Recent incidents involing illegal migrants
included seventeen (17) Iranian nationals
who were excluded from entering thecountry and immediately deported after
they were found to be carrying fakepassports. Incidents of Filipino illegal
entrants to other countries like the US,
Canada and other Asian countries also
abound and are causing grave concern tothe immigration authorities of the affected
countries.
In the Philippines, the Bureau of
immigration authorities have sought thePhilippine Congress to enact a billincreasing the penalty on persons convictedof smuggling illegal and undesirable aliens

into the country. The immigration Bureau
has gathered intelligence information
which revealed that members of foreignbased human smuggling syndicates havebeen using the Philippines as a prime
destination for illegal aliens who want totake advantage of the growing economic
opportunities in the country. The Bureauof Immigration admitted that thetechnology used by these syndicates rivals
the governments in the processing of
spurious passports, visas and immigration
stamps. It was also revealed that humansmuggling syndicates were not only
engaged in bringing undocumented aliens
into Philippines, but also foreign terrorists,fugitives from justice and drug lords.
V. ILLICIT TRAFFICKING OFWOMEN AND CHILDREN
This crime activity has a direct bearing
on foreign countries. The modus operandi
employed by the syndicates are either torecruit Philippine prostitutes for
employment in Japan, Brunei and other
ASEAN countries or recruit foreign
prostitutes from Colombia, Taiwan andRussia to enter the sex trade in thePhilippines. Arrests of these foreigners
were made on separate occasions
throughout 1995,1996 and 1997.
Likewise, as recorded by our Social
Welfare Department, there were fifteen(15) reported cases of pedophilia and childprostitution, with sixteen (16) foreigners
arrested in 1995 alone. It is sad to note that
this is the adverse result, as reported by
the Defense for Children International, of
young Filipino girls being recruited byinternational prostitution syndicates andadvertised as virgins in Spartacus
Magazine, a widely circulated
pornographic magazine, which thesyndicate uses as an information network
for European pedophiles looking for cheap
sex in Asia. It is for this reason that175

RESOURCE MATERIAL SERIES No. 54
concerned government agencies havejoined hands to arrest the worsening
situation. The Bureau of Immigration, forexample, has revived its crusade against
probable foreign prostitutes.
VI. ILLICIT TRAFFICKING OF
MOTOR VEHICLES
Most of the apprehension in the countryof illegally transported motor vehicles
involves luxury vehicles from the US,
Japan and Hong Kong. These vehicles,
which are actually luxury vehicles, areentered through the ports but are declared
as utility vehicles to avoid payment of advalorem tax. Some other luxury vehicles
entered through the ports are simply
undeclared or misclassified. Other vehicles
are disassembled and declared as parts,
availing lower tariff duties, and then areassembled after release from the customs
area. They are commonly known in thePhilippines as “chop-chop”.
Practically, the bulk of smuggled motor
vehicles apprehended are motorbikes
landed outside of customs entry points.
They are unloaded shipside, often ininternational waters, into local small boats
and landed at the shorelines. Most of theselandings occur in Northwest Luzon,
Eastern Visayas and Northern Midanao.
VII. MONEY LAUNDERING
Money laundering is another type ofcommercial crime. It is defined as a processof making or turning bad money/funds
raised and earned through crime (forexample drug money), into good. The
Phillipines has no money laundering lawsthat will guide law enforcers in preventing
this crime.
VIII. TRANSNATIONAL ECONOMIC
CRIMESTechnological advancement has greatly176

affected the relationship among police
forces in the region. The introduction andcreation of internet and electronic mail (email) in the computer realm has broughtmembers of foreign nations closer to eachother. Communication is now at the touchof a finger. However, this has also led tosophistication and a rise in commercial
crimes. Syndicates, who have knowledge
and skill about computers, known to be“computer hackers”, can access banktransactions, imitate certain products andperfectly forge signatures through the useof computers.
Recently, the Philippines scored asignificant breakthrough in credit cardfraud through the arrest of five (5)suspected members involved in the
manufacture and worldwide sale anddistribution of falsified payment cards, last
29 November 1997. The arrest resulted
from simultaneous raids conducted by the
PNP Intelligence Group in cooperation
with the US Secret Service and Interpol.
Arrested during the operations were thefollowing suspects who claimed/identified
themselves to be:(a) R a y m o n d J A C K S O N a . k a .
ALLEN MILLER(b) Peter HORNE(c) Otto URBAN(d) Helen HORNE(e) Jaime BUETA
Another suspect, a certain Horst SELIG,
who was identified as being themastermind of the syndicate, was able toelude arrest. Reportedly, SELIG is wantedby the police authorities in Germany.
INTERPOL and the US Secret Service
disclosed that this syndicate has
successfully operated and eluded arrest in
the US, United Kingdom and other partsof Europe, Hong Kong and Thailand. It isbelieved that they transferred their base

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERS
of operation to the Philippines because of
the absence of a specific law dealing withfraudulent payment cards. Apparently,
they also underestimated the ability of ourlaw enforcement agencies.
The initial investigation conducteddisclosed that the local payment card
industry listed to this syndicate
approximately USD$15 million as a resultof the flooding of counterfeit/cloned
payment cards manufactured by abovecited suspects. Payment cards issued by atleast fifty-two (52) local and internationalbanks and credit companies have beencloned/falsified. These include American
Express, Citibank, Bank Americard/
Deutsche Bank, Equitable Bank,
MasterCard, VISA and others. Other firms
could have been similarly compromised.
The extent of the damage on the credit card
industry and concerned banking
institutions in particular, and the impact
on the national economy and on global
industry in general, can not be determineduntil a thorough review and analysis of thesoftware and documents seized from thesyndicate have been made.
The syndicate employs the following four(4) basic modus operandi:
1. Skimming Method
A member of the syndicate will go to abusiness establishment and introduce
himself as a representative of a payment
card issuing bank. They will then ask to
examine the skimming device. Once
permitted, they attache the skimming
device to their computer, which then grabs
and stores the data from the skimming
device. The surreptitiously obtained datais then used to manufacture the cloned
payment cards.
2. Courier-Intercept Method
Issuing banks, instead of directly
releasing payment cards to clients, employ

courier companies to deliver the cards. In
this method, the syndicates bribe couriers
to lend them the card in transient, the dataof which is extracted. Once done, thecloned/compromise card is returned to thecourier for delivery, a courier is bribed anaverage of P2,500-P5,000 per card.
3. Cardholder and SyndicatesIn this method, the cardholder themself
is approached by the syndicate for thecloning of their card in exchange for acertain amount. The syndicate can portrayto the cardholder the advantages of having
their card cloned.
4. Merchant-Syndicate
This method is done by bribing personnel
with access to the account numbers ofclients of a business establishment into
revealing information about the accountnumber of payment cards of said clients.
The syndicate then creates multiple clones
out of each account number elicited fromthe business establishment. As a support
to the payment card cloning schemes, fake
identification cards such as passports,
driver’s licenses and similar identification
documents are manufactured. These areusually presented as issued byinternational banking institutions.
Given its enormous impact in thebooming payment card industry in the
country and business sector as a whole, the
PNP appealed to Philippine legislators to
expedite the passage of law that will
specifically address Payment Card Fraud.
IX. ASSESSMENT
Through the foregoing discussion, we
have come up with the following
assessment:i)

Crime groups in the Philippines
are still loosely organized andstructured. These groups are still177

RESOURCE MATERIAL SERIES No. 54
in their infancy stages comparedto their foreign counterparts who
have systematically establishedbroad social spectrums ofinfluence essential to theiroperation.
ii) The illegal activities of crimegroups in the country are largely
domestic in implication and effect.
Except for firearms smuggling,
prostitution and illegal drugtrafficking, all other crime
activities in the Philippines has nodirect bearing or relationship toother nations.
iii) As the Philippines progresses
economically with its Medium
Te r mDevelopment
Plan(MTDP),it is expected thattransnational crimes sponsored byinternational crime groups will
proliferate in the country. This willfurther be hastened by thedisplacement of Hong Kong based
syndicates after its return toChina in 1997.
iv) The Philippines needs to enact
Anti-Racketeering and AntiMoney Laundering statutes tocope with organized crime. These
statutes will no doubt arm our law
enforcement agencies witheffective measures to denyorganized crime their substantial
economic base of support.
v) Wi t h t h e e x i s t e n c e o f t h e
extradition treaty between thePhilippines and the United States,
neutralization of crime groups
seeking sanctuary in bothcountries will be accelerated. The
Philippines needs also to expand
and negotiate with other countries
on the forging of extradition
treaties and re-negotiation ofexisting treaties that arehampered by technicalities inenforcement.

178

X. RECOMMENDATIONS
The following measures involving
international cooperation are suggested toeffectively curb transnational crimegroups:i)Strengthening of diplomatic
relations, networking andvigorous exchange of informationand technology through
INTERPOL, ASEANAPOL andother concerned international
bodies. The establishment of
direct linkages with other
INTERPOL member countries
should be pursued to expeditiously
facilitate intelligence exchange
and enable immediate action on
all cases, particularly theactivities of transnational crime
syndicates. This could further beenhanced through the mutual
sharing of technology, either byexchanging training or by othermeans.

ii) Forging extradition treaties
among concerned nations.
Extradition treaties with the othercountries are of utmost necessity
in suppressing international
syndicates and containing theupsurge of transnational crimes.
This is particularly true when
offenders escape from theircountry and seek sanctuary inanother, thereby evading the fullforce of the law. We need to renegotiate existing extradition
treaties that are hampered bytechnicalities in enforcement.
iv) Conduct of joint and coordinatedpatrols on common borders as acooperative effort in thwartingorganized crime.

108TH INTERNATIONAL SEMINARPARTICIPANTS’ PAPERSTABLE 1RESULT OF ANTI-NARCOTICS OPERATIONS CONDUCTED
1995 and 1996 statistical data of arrest and confiscation for dangerous drugs
ARREST

1996(January to December)
1,311
27 (1 killed)

1995

No. of Persons Arrested
No. of Foreigners Arrested
CONFISCATIONS/SEIZURES
HeroinCocaineMethamphetamine(Shabu)
Marijuana Leaves
Marijuana Plants
Marijuana Seedlings
TOTAL MARKET VALUE

1,425
15 (2 killed)
014,424gms
207,593gms
1,754,956gms
6,808,473pcs
22,847,193pcs
P1.76 BILLION

1,534gms
1,392gms
280,699.24gms
964,062.10gms
9,164,052pcs
2,997,065pcs
P2.044 BILLIONTABLE 2
GOVERNMENT COUNTERMEASURES
Kinds of Drugs
Morphine, Heroin, Cocaine
Shabu (Methamphetamine)
Marijuana(Cannabis)
Marijuana resin or MJ hashish

Quantity
40 grams or more
200 grams or more
750 grams or more
50 grams or more
TABLE 3

RESULTS OF PHILIPPINE NATIONAL POLICE OPERATIONS(1993 to 30 SEPT 1997)
1992
No of Narcotics Operations
4965
Buy-Bust
1977
Service of Warrants
2811
Marijuana Eradication
177
No. of Arrested Persons
6030
No. of Cases Filed In Court
876
No. of Syndicates Busted
59
Total Amount of Drugs Seized P1.198

1993
5068
1844
2980
244
6537
345
20
P.828

1994
4763
1516
3093
454
5358
3558
69
P1.185

1995
6126
2355
3602
169
7273
4374
58
P2.089

1996
21677
6246
15231
200
12040
7505
65
P4.428

1997
TOTAL
18,632 61,231
6439 20,377
11,184
38901
352
1,296
11,325 48,590
7,287 23,954
24
295
P1.283 P11.011

179

RESOURCE MATERIAL SERIES No. 54
TABLE 4DISPOSITION OF DRUG CASES FROM 1993-SEPT 1997
(PNP NARCOTICS GROUP STATISTICS)

No. of Narcotics Operations
No. of Arrested Persons
No. of Cases Filed in Court
No. of Convicted Persons
No. of Cases Dismissed
No. of Pending Cases

180

1993
945
1,211
345
156
137
52

1994
875
1,006
948
131
48
769

1995
1,425
10,563
854
50
6
795

1996
1,000
1,311
941
30
2
909

1997
668
1103
736
16
1
719

Total
4913
6194
3824
383
197
3244