Philippines still in FATF ‘grey list,’ may exit by 2025
The Philippines failed to exit the Financial Action Task Force (FATF) grey list this year but has reportedly addressed earlier identified deficiencies, positioning it for a potential exit in 2025.
The FATF, a global watchdog for anti-money laundering and counter-terrorism financing, confirmed in its 25 October 2024 statement that the Philippines had acted on all 18 items of its action plan, which were critical to exiting the grey list next year. These reforms, if maintained, could benefit Filipinos through more accessible, faster, and cost-effective financial transactions, particularly for overseas Filipino workers (OFWs).
“The Philippines this week moved closer to exiting anti-money laundering watchlists by 2025, paving the way for Filipinos, especially Overseas Filipino Workers, to benefit from faster and cheaper remittances and other transactions,” the Philippines’ Anti-Money Laundering Council (AMLC) said in a statement.
The FATF confirmed that an on-site visit by the Asia/Pacific Joint Group (APJG) will be scheduled early next year to verify the sustainability of these reforms.
The first FATF Plenary under the Presidency of @ElisadeAnda has concluded, outcomes include the adoption of assessments of Argentina & Oman, and proposed revisions to the standards related to FATF’s ongoing focus on financial inclusion. More at : https://t.co/CP9TipGgzdpic.twitter.com/rXA2rESP3p
Key to the Philippines’ progress is a series of reforms designed to curb money laundering and terrorism financing, with FATF’s review highlighting critical areas such as risk-based supervision, enhanced law enforcement access, and the imposition of strict sanctions on illegal remittance operators. Among these, the country implemented risk-based supervision for designated non-financial businesses and professions, applied anti-money laundering (AML) and counter-terrorism financing (CTF) controls to mitigate risks associated with casino junkets and established new registration requirements for money and value transfer services.
The FATF noted these achievements, saying the Philippines has shown “an increase in the use of financial intelligence and an increase in ML [money laundering] investigations and prosecutions in line with risk.” Furthermore, the Philippines demonstrated “enhancing the effectiveness of the targeted financial sanctions” in both terrorism financing and proliferation financing, areas that are highly scrutinised by FATF.
High-level government commitment
The high-level commitment of the Philippine government has been crucial to advancing these reforms. In July last year, President Ferdinand Marcos Jr. ordered a comprehensive anti-money laundering strategy, reorganising the interagency task force to include anti-terrorism finance in its agenda.
“This milestone is a testament to the hard work and coordination across government agencies. It reflects our strong commitment to meeting the FATF’s stringent standards and ensuring the long-term protection of our financial system. We are confident that this progress will be affirmed during the on-site visit,” Executive Secretary Lucas Bersamin, chair of the National Anti-Money Laundering and Combating Terrorism Financing (AML/CTF) Committee, said.
The government also issued Executive Order No. 33 and Memorandum Circular No. 37 to accelerate AML and CTF compliance across agencies. These orders enforce the adoption of the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy for 2023-2027, bringing a range of departments and regulatory bodies, such as the Bangko Sentral ng Pilipinas and the Anti-Terrorism Council, into collaboration to combat illicit financial activities.
Final verification ahead in 2025
The FATF’s Asia/Pacific Joint Group on-site review early next year will confirm whether the Philippines’ AML and CTF advancements meet the Paris-based watchdog’s stringent requirements.
“We must continue our efforts to ensure that our reforms are implemented and sustained,” Bersamin said. “Building a resilient AML/CTF regime is critical for safeguarding our financial system and our economy from illicit activities.”
In addition to its progress, the Philippines is joined by other countries on FATF’s grey list, which requires enhanced monitoring. This October, the FATF added Algeria, Angola, Côte d’Ivoire, and Lebanon to the grey list, while Senegal successfully exited. The FATF’s blacklist, which remains unchanged, includes North Korea, Iran, and Myanmar.
