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 of its financial system and sustaining global trust.
The FATF had placed the Philippines on the grey list in 2021, mandating the country to address 18 specific action items to achieve removal. Countries on the grey list are closely monitored and must implement corrective measures to avoid the more severe consequences of being blacklisted, which could lead to significant economic repercussions.
The AMLC highlighted that the removal from the grey list would streamline cross-border transactions, making them faster and less costly. It would also lower compliance barriers and improve financial transparency. This move is expected to ease international fund transfer requirements, directly benefiting Filipino individuals and businesses.
The council noted that these improvements would not only support local businesses but also enhance the Philippines’ position as an attractive hub for FDI. This is particularly beneficial for overseas Filipino workers (OFWs), who often rely on efficient and cost-effective international money transfers.
The decision by the FATF to delist the Philippines could encourage foreign banks to reassess and potentially resume their business relationships and transactions with Philippine financial entities. Prior to the grey listing, some foreign regulators had already imposed stringent requirements or fines on financial institutions dealing with entities in the Philippines and other countries perceived to have weak anti-money laundering regimes, leading some banks to avoid business with these nations altogether.
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 provided a strategic roadmap for addressing the FATF’s action plan. Further directives were issued in October 2023 and January 2024 to expedite the process.
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 alignment of the Philippines’ AML/CTF/CPF framework with global standards. Bersamin added that this 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 country’s successful exit to the concerted efforts of NACC member agencies, contributing agencies, the private sector, and the judiciary. Remolona emphasized that this achievement is a testament to strong governmental and private sector cooperation, which also supports ongoing efforts to make the financial system a more robust driver of sustainable growth.