MANILA, Philippines – The Philippines has long been suffering from echoed investment scams, which resulted to crime, death, deception, and stealing of money from innocent citizens.

One of the common investment scam stories start with a woman promising her friends to increase their money through investment. The woman guarantees that the investment company owned by her father works for she put her hard-earned life savings in it. Apprehensions may be present, but her friends still gave in.

As days passed, her friends hoped for her promises. Nonetheless, nothing is fulfilled. The woman’s father was even found dead in unrecognizable state. Her friends are aware, but sympathy was not there.

Her friends even demanded for their investments, but the woman insisted she is also a fraud victim. Police may have been called by her friends, but no action solved the issue. Conclusively, one of the friends decided to achieve justice by killing the woman.

“Honor Thy Father” inspired the story, which centers on deception and scam usually occurs in the country. The movie may serve as a lesson for people. However, it does not limit the fact that the same gruesome crime happens in real life.

Philippines has become one of the investment scam countries and it continues to get worse.

Jose Cecilio “Jay” Peñaflor’s case is just one of many similar instances in the country. Jose was enticed by his classmate named Janis Ann Cruz to invest in the country’s stock market. Nonetheless, instead of Peñaflor being scammed, he became the root of P300-million investment fraud. Several people have committed to his investment offer, thinking their savings would be invested in the stock market and grow.

Peñaflor is a Philippine Stock Exchange former staff. PSE President, Hans Sicat, also described him to have a “silver tongue”. Peñaflor formerly headed the Education Department of PSE. Despite being evoked out of the company, he still held free seminars concerning stock investment. Peñaflor even describes himself as “certified securities specialist, economist and former head of the PSE Market Education” to persuade participants.

Though Peñaflor has no realistic or even possible access to ESPP or corporation stock’s tax efficient, he was able to convince the individuals to invest. According to him, once stocks are purchased, price per share will build up between the bidding and acquisition period.

Later on, investigation and Sicat claimed that Peñaflor used Ponzi scheme. Various courts have filed cases against Peñaflor. Sadly, none of his victims got back his or her money.

Various Types of Deceitful Investment Offers

Individuals are usually scammed through smart marketing strategies and promise of quick returns. Despite differences in operations, all fall in deceit, fraud, and theft of money.

Ponzi Scheme

Ponzi or “Rob-Peter-to-Pay-Paul” scheme was named after a swindler and Italian businessman, Charles Ponzi. Ponzi targeted US and Canada, wherein he enticed investors in having abnormally higher returns than other investments.

During Ponzi’s time, an individual or a group of investors will get their compensation of returns from new investors’ newly paid capital. Though at first, it became a legal investment, it later became illegal for expected returns were not met.

Returns came from later investors who contribute funds. Investments were just transferred to one client to another. In the case of Ponzi, he used the investors’ money to compensate for himself and earlier investors.


The pyramiding scam still continues to steal money from unaware investors.  This is designed in a way that you will earn money by recruiting more members into the company. Commonly, selling products, which they claim to be high quality, is involved.

As a new recruit, you have to pay for your recruiter to sell the products. In general, the higher levels of the pyramid will get more money.

Hype and Dump

Hype and dump may not be common to average people, but occurs to most stock market-interested individuals.

Scammers encourage individuals or organizations to invest their money into a stock, which is low in value. They will get more investors until the stock’s price is in its all-time high. When this happens, the scammers will sell their shares, resulting to sudden decrease in stock price.

Forex Trading

National Bureau of Investigation is currently looking into foreign exchange trading, which happens to be a source of scam recently.

SEC Enforcement and Investor Protection Department Director, Jose Aquino, explained that entities or scammers get investors and promise returns. However, this is illegal for foreign exchange must only be traded through banks.

Sophistication in investment scams is becoming prominent, particularly now that Philippines is quickly recovering its economic status. Higher earning middle-class people tend to be enticed to easy money without difficulty.

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