Removal from gray list to help Philippines attract more FDI

MANILA, Philippines — A removal from the gray list of global dirty money watchdog Financial Action Task Force (FATF) may help the Philippines attract more foreign direct investments (FDIs), according to the International Monetary Fund (IMF).

“The completion of the Philippines’ action plan with the FATF is critical to successfully exit the FATF list,” Cheng Hoon Lim, IMF mission head, said.

She said the Phillippines’ ongoing efforts to improve Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) effectiveness are a welcome development.

Based on the latest evaluation of the Paris-based watchdog, the Philippines continues to make progress in addressing technical compliance deficiencies in its AML/CFT framework.

Based on the third follow-up report on the mutual evaluation of the Philippines, the Asia Pacific Group on Money Laundering (APG) has upgraded the country’s rating on two recommendations, to largely compliant from partially compliant.

The APG said the Philippines has addressed the moderate deficiencies in relation to the regulation of designated non-financial businesses and professions, particularly the procedures of Philippine Amusement Gaming Corp. licenses only covering board of directors and not shareholders or beneficial owners, as well as the absence of information on the fit and proper framework for land-based casinos under the supervision of the Cagayan Economic Zone Authority and the Aurora Pacific Economic Zone and Freeport Authority.

The APG said the country has also addressed Recommendation 32 involving the absence of a competent authority to request and obtain further information from the carrier in cases where there is a false declaration or a failure to declare.

“Overall, the Philippines has made good progress in addressing the technical compliance deficiencies identified in its mutual evaluation report and has been re-rated as largely compliant for Recommendations 28 and 32,” the APG said.

Given the results of the latest follow-up report, the APG placed the Philippines on enhanced follow-up instead of the previous enhanced expedited follow-up.

Despite the re-ratings, the Philippines remains partially compliant with regards to three concerns including Recommendation 15 covering new technologies, Recommendation 25 pertaining to transparency and beneficial ownership of legal arrangements, and Recommendation 39 covering extradition.

Last June, the FATF retained the Philippines in its gray list as it stressed the need for the country to further strengthen its action plan to address strategic deficiencies in their regimes to fight money laundering, terrorist financing and proliferation financing.

The global dirty money watchdog has retained the Philippines in the list of jurisdictions under increased monitoring due to strategic deficiencies. The list, which includes 22 other countries, was released during the hybrid FATF plenary from June 14 to 17.

Since its re-inclusion in the gray list in June last year, the Philippines has made a high-level political commitment to work with the FATF and APG.

The Anti-Money Laundering Council is confident that the Philippines will be removed from the gray list on or before January 2023 as the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes.