The Financial Action Task Force (FATF) has recently confirmed that the Philippines remains on its “grey list” of jurisdictions subject to increased monitoring. Despite notable progress in enhancing its anti-money laundering and counter-terrorism financing (AML/CFT) measures, the country is among 21 nations still under scrutiny.
Key Developments from the FATF Plenary
Following the FATF’s sixth Plenary under the Presidency of T. Raja Kumar, held in Singapore, updates were provided on the status of various jurisdictions. While Jamaica and Türkiye were removed from the “grey list,” the Philippines was noted for improvements but reminded to address strategic deficiencies. These deficiencies include enhancing controls over casino junkets, bolstering cross-border measures at sea/airports, and increasing prosecutions related to terrorism financing.
Evaluation of Philippines’ Progress
The FATF acknowledged positive steps by the Philippines, such as increased money laundering investigations and prosecutions aligned with identified risks. Additionally, the country emphasized improvements in beneficial ownership transparency and the supervision of designated non-financial businesses and professions (DNFBPs). Despite these advancements, the FATF stressed the need for sustained efforts to fully implement its action plan, as deadlines for compliance expired in January 2023.
Government Commitment and Strategic Actions
President Ferdinand Marcos Jr. has set ambitious targets for the Philippines to exit the “grey list” by the end of 2024. A Memorandum Circular issued to 44 government agencies, including PAGCOR, underscores the comprehensive approach to meeting FATF requirements. Alejandro Tengco, Chairman and CEO of PAGCOR, has appointed Atty. Wilma Eisma to lead these efforts, signaling a focused initiative to expedite compliance and regulatory reforms.
Recommendations and Next Steps
To achieve removal from the “grey list,” the Philippines must prioritize implementing FATF’s recommendations swiftly. This includes enhancing regulatory oversight over vulnerable sectors like casino operations, strengthening border controls to combat currency smuggling, and intensifying efforts in prosecuting cases related to terrorism financing. Proactive measures are essential to demonstrate sustained progress and align with international standards.
While the Philippines has made strides in improving its AML/CFT regime, its continued presence on the FATF “grey list” necessitates unwavering commitment to reform. The government’s proactive stance and targeted actions are pivotal in achieving compliance milestones and restoring confidence in its financial system.