MANILA – The recent removal of the Philippines from the Financial Action Task Force’s (FATF) grey list is poised to significantly enhance the country’s allure as a prime destination for foreign direct investment (FDI), according to the Anti-Money Laundering Council (AMLC). This development marks a pivotal moment in the nation’s ongoing efforts to combat money laundering and terrorist financing, reinforcing its commitment to international financial standards.
The AMLC emphasized that being on the FATF grey list subjects countries to heightened scrutiny, which can be a cumbersome process for banks and other financial institutions. Such monitoring often leads to a reluctance among international banks to engage in correspondent banking relationships with grey-listed countries, thereby hampering international financial flows. The Philippines’ successful exit from the grey list is thus seen as a crucial step towards bolstering the integrity and efficiency of its financial system, while also maintaining global trust in its economic stability.
The FATF had placed the Philippines on the grey list in 2021, mandating the country to address a comprehensive list of 18 action items to achieve removal. Countries on the grey list are under close watch and must implement corrective measures to prevent being escalated to the blacklist, which could result in severe economic consequences. The AMLC highlighted that the country’s removal from the grey list would lead to more efficient and cost-effective cross-border transactions, lower compliance hurdles, and improved financial transparency.
Furthermore, the AMLC noted that the exit from the grey list would ease international fund transfer requirements, directly benefiting Filipino individuals and businesses. This improvement is expected to support business growth, enhance the Philippines’ attractiveness to foreign investors, and particularly aid overseas Filipino workers (OFWs) by simplifying their financial transactions.
The decision by the FATF to delist the Philippines could also encourage foreign banks to reconsider and potentially resume their business dealings with Philippine financial entities. Prior to the grey listing, some foreign regulators had already imposed stringent requirements or penalties on financial institutions engaging with entities in the Philippines and other countries perceived to have weak anti-money laundering frameworks, leading some banks to sever ties with these nations.
The AMLC also acknowledged the significant role played by President Ferdinand R. Marcos Jr. in facilitating the country’s exit from the grey list. In July 2023, Marcos issued Executive Order 33, which outlined a strategic plan to address the FATF’s action items. Subsequent directives in October 2023 and January 2024 further accelerated the process of delisting.
Executive Secretary Lucas Bersamin, who chairs the National Anti-Money Laundering/Counter-Terrorism Financing/Counter-Proliferation Financing (AML/CTF/CPF) Coordinating Committee (NACC), stated that the FATF’s decision validates the Philippines’ AML/CTF/CPF framework as compliant with global standards. Bersamin added that this achievement aligns with the government’s vision to enhance economic competitiveness for the benefit of its citizens.
Bangko Sentral ng Pilipinas (BSP) Governor and AMLC chairperson Eli Remolona Jr. attributed the successful exit to the collaborative efforts of NACC member agencies, contributing agencies, the private sector, and the judiciary. Remolona emphasized that this accomplishment not only reflects strong governmental and private sector cooperation but also supports ongoing initiatives to make the financial system a more robust driver of sustainable economic growth.