In a significant development for the country’s financial integrity, the Philippines has been officially removed from the Financial Action Task Force’s (FATF) grey list, a roster of jurisdictions under heightened scrutiny for money laundering and terrorism financing risks. This milestone was announced late Friday, marking the end of a three-year journey to enhance the nation’s anti-money laundering and counter-terrorism financing (AML/CTF) framework.
The FATF, a global watchdog dedicated to combating money laundering and terrorist financing, acknowledged the Philippines’ substantial strides in addressing the deficiencies identified in June 2021. FATF President Elisa de Anda Madrazo highlighted the country’s completion of its action plan, which included rigorous efforts to curb the flow of illicit funds through casinos, a sector previously identified as vulnerable.
Madrazo emphasized the importance of the Philippines maintaining these reforms in line with FATF standards. She noted that the country would continue its collaboration with the Asia-Pacific Group (APG) on money laundering issues and begin preparations for its next evaluation, scheduled for 2027. This upcoming assessment will serve as a critical checkpoint to ensure the sustainability of the implemented measures.
The Philippines’ exit from the grey list was facilitated by a series of comprehensive reforms. These included enhancing the supervision of Designated Non-Financial Business and Professions (DNFBP) based on risk assessments, strengthening AML/CFT controls within the casino sector, particularly targeting junket operations, and enforcing new registration requirements for Money or Value Transfer Services (MVTS). Additionally, the country has cracked down on unregistered and illegal remittance operators, improved law enforcement’s access to beneficial ownership (BO) information, and ensured the accuracy and timeliness of such data.
Further achievements encompassed an increased utilization of financial intelligence, a rise in money laundering investigations and prosecutions aligned with identified risks, and a more robust approach to identifying, investigating, and prosecuting terrorism financing cases. The Philippines also took steps to safeguard the non-profit organization (NPO) sector from abuse while ensuring that legitimate NPO activities remain uninterrupted. Enhancements were made to the targeted financial sanctions framework for both terrorist and proliferation financing, and cross-border measures were implemented at major international sea and airports to mitigate risks.
An onsite visit was conducted to verify the progress made by the Philippines, confirming the effectiveness of the reforms. Madrazo expressed confidence in the Philippines’ commitment to sustaining these measures, a commitment reiterated during recent meetings. As the country prepares for its 2027 assessment, it will continue to work closely with the APG to ensure that the reforms remain effective and in place.
The removal from the FATF grey list is a testament to the Philippines’ dedication to enhancing its financial system’s integrity and resilience against illicit financial activities. This achievement not only boosts the country’s international reputation but also strengthens its position in global financial markets.