MANILA, Philippines // Philippine boxing hero Manny Pacquiao said Tuesday authorities had frozen all his domestic bank accounts over allegations of unpaid taxes from lucrative fights in the United States, leaving him financially paralysed.
“This is harassment,” the former eight-division world champion said in an interview on ABS-CBN television, as he disclosed for the first time a freeze order issued by the Philippines’ Bureau of Internal Revenue in recent months.
The shock announcement came just two days after Pacquiao, 34, resurrected his boxing career with a unanimous points decision win over American Brandon Rios in the Chinese gambling enclave of Macau.
The victory, which Pacquiao devoted to the victims of typhoon Haiyan, only added to his lustre among millions of ordinary Filipinos who idolise the fighter.
Pacquiao is now eyeing more lucrative fights in the United States. He is also pursuing a political career in the Philippines, where he is a second-term congressman with ambitions of eventually becoming president.
Pacquiao said the tax office took the action because it believed he had evaded paying taxes on his fights in the United States in 2008 and 2009 when he was at the peak of his career and earning tens of millions of dollars.
He said he had broken no laws because he had already paid taxes on those earnings in the United States, which has a treaty with the Philippines that allows citizens of both countries to avoid double taxation.
“I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come,” Pacquiao said.
“I have already paid my taxes in America. Had I not paid the correct taxes they (US authorities) would have come after me and I would not have been able to travel there.”
The Philippine tax bureau confirmed the local bank accounts of Pacquiao and his wife, Jinkee, had been frozen.
“According to the collection division we have issued a garnishment of his bank accounts,” Dino Somera, litigation division official of the tax bureau, told AFP.
Somera said he did not know how much money was in the bank accounts of the couple, and Pacquiao did not disclose the amount in the television interview.
The Pacquiaos have asked the Court of Tax Appeals to lift the bank freeze, but the court has yet to rule on the couple’s petition, according to court papers released to the media.
Pacquiao said the freeze order had left him without money to pay his staff, and forced him to borrow “not less than one million pesos”, or $23,000 (Dh84,479), to fulfill pledges to help victims of a devastating super typhoon in the Philippines.
At his peak, Pacquiao was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.
The former street kid who ran away from home to pursue a boxing career became one of the wealthiest athletes in the world.
But his career nosedived after suffering two losses last year, the second in a humiliating knockout to Mexican Juan Manuel Marquez that prompted questions over whether the ageing warrior should retire.
But even last year, Forbes magazine listed him as the 14th highest-paid athlete globally with an estimated $34 million (Dh124.88m) in earnings.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
