Name: _____________________________ Date: January 26, 2022

Instructor: _________________________ Year Level: _____________

1 Cut/Look for a local news (Surigao Del Sur)

 2 Summary of the news

Date of released: January 26, 2022

Hon. Florencio C. Garay expresses his public sentiments about the

investment schemes happening in Bislig City, Surigao Del Sur. Way back in
2019, there were myriad investment schemes within the province, including
Kapa, Regin, Forex, Demeter, PHPC, and AFMC. He said that government
officials must help Bislig citizens not be involved in any financial fraud, yet he
was disappointed when he found out that one of the city's public officials had
been initiated as a founder in this scheme and many Bisliganons had been
victimized by this fraud. He also mentioned the Kapa Ministry. A lot of
investment schemes have arisen in Bislig City, but Kapa is the largest
investment scheme in its history. The SEC said that the investment-taking
activity of Kapa constituted a Ponzi scheme, an investment program that offers
impossibly high returns and pays investors out of the capital contributed by
later investors. It was also mentioned that the investment scheme is simply
unsustainable. After the alleged Kapa scam, City Mayor Garay claimed that
there was a Bislig public officer who initiated the shutdown of the Kapa but
even started his own fraudulent scheme. Many government employees and
ordinary citizens were duped into investing. At the end of his speech, Mayor
Florencio Garay informed the Bisliganons to attend their new program on anti-
scam assembly to be knowledgeable about the investment scheme.

3 Reflection

I'm one of the Bisliganons who has been victimized by these investment
schemes in Bislig City. My own sentiment on the issue is that it's too good to
be true. People insist on participating in these fraudulent activities because
they have unbelievable high returns on investment ignoring the imminence of
this pursuits. It was ordered to be shut down when the Philippines' highest
officials discovered about it. When all of the investment schemes were declared
to be terminated, I witnessed the devastation of the people. However, there is a
reason why authorities are trying to put a stop to Ponzi schemes and other
"pyramiding" investment propositions.

The Kapa Ministry, which stands for Kabus Padatuon, was one of Bislig
City's largest financial schemes. Members were encouraged to donate in
exchange for a 30% monthly return for life, referred to as a "blessed" or "love
gift," with no need to do anything other than invest and wait for the payout.
Many people believe that Kapa is a keen solution to poverty without knowing
the pyramiding scheme of this fraud. At first, there is a smooth flow of
transactions between the Kapa officials and their investors. They persuade
people into believing that they do not need to work hard, be innovative, or be
financially literate in order to make money. However, when the truth was
revealed, the President of the Philippines ordered the investment schemes to be
shut down, and many people suffered from the fraudsters because they didn't
even receive any investment return after they were terminated. Due to the huge
number of fraud victims in Bislig City, City Mayor Garay initiated an Anti-Scam
Assembly in Bislig. This is the city's response to educate the people regarding
investment schemes.

4 Economic Implication

Economic Implication 1: Lost Economic Opportunities

Authors: Cornell & Shapiro

Many Bisliganons became victims of the city's various financial frauds. It

was unfortunate that they did not even receive an investment return on their
own money. A lot of them invest using their own funds and even take out loans
and borrow money solely to invest in this fraud activity. One of the economic
implications of these schemes is that they affect businesses, investors, and
entrepreneurs. It was reported that government employees, businessmen, and
investors had invested millions in this investment fraud. As a consequence, it
greatly affects their business due to theft of cash and other assets, devaluation,
and lost economic opportunities. Many businesses in Bislig City are impacted
by lost economic opportunities because of this activity. Financial fraud directly
affects a business's financing abilities and costs, as well as the adjustments of
corporate governance. This leads to great difficulties and uncertainties in a
company’s production and operation activities. This creates significant risks
and uncertainty in a company's production and operations.

Economic Implication 2: Affect Reputation

Karpoff et al.

Any entity's reputation can be negatively affected by investment

schemes. When fraud is handled badly, it can lead to a loss of trust in
government and industry, as well as a loss of international and economic
reputation.

Economic Implication 3: Investment Schemes: Economic Sabotage

Author: Jennie P. Arado

Financial advisors expressed their thoughts on how investment plans

harm the economy. The first is that investors went to great lengths to allocate a
large portion, if not all, of their assets. Others even pawned their own land
titles or homes in order to borrow large sums of money to invest. Second,
lending companies have seen a significant drop in transaction volume. Third,
the fishing sector is currently experiencing a decrease in the number of
fishermen. Several tuna processing companies, private schools, and other
enterprises have reported that such investment firms have already taken some
of their employees. Fourth, if enterprises and industries close, there will be no
more jobs, and the economy will collapse. And lastly, the banking sector will be
affected. People will never deposit their money in banks since they will use it to
invest. The banking sector is one of the highest taxed sectors in the economy.
 5 Recommendations

Not only Bisliganons are victims of these fraudulent activities, but also
other localities in the Philippines. It was reported as the largest investment
scheme in the country, causing devastation to the economy. It is necessary to
have actions to solve the issue. City Mayor Garay implemented a program titled
"Anti-Scam Assembly" to educate all Bisliganons. Further recommendations
are listed below:

1. Anti-Fraud Program

The government must conduct an anti-fraud program for all

localities in Surigao Del Sur. Effective anti-fraud training has numerous
advantages. Citizens who have been properly trained can spot suspicious
activity. Effective anti-fraud training can boost citizens' morale.

2. Securities and Exchange Commission (SEC) must shut down fraudulent

investment

The SEC's office must carefully investigate and check emerging

investment schemes and ponzi scheme red flags.

3. Research the investment

Understand how an investment works, the risk, and any fees

before coming to a decision. Check to see if it aligns with your financial
objectives and other investments.