Philippines remains on FATF gray list

MANILA, Philippines — The Philippines failed anew to exit the gray list or list of jurisdictions under increased monitoring after falling short in addressing the remaining concerns on its anti-money laundering and counter-terrorist financing (AML/CFT) regime, according to global dirty money watchdog Financial Action Task Force (FATF).

Outgoing FATF president T. Raja Kumar said in a hybrid press conference after the conclusion of the two-day plenary held in Paris that the Philippines and 24 other countries are in the gray list.

While taking steps toward improving its AML/CFT regime, Kumar said the Philippines, which entered the gray list in June 2021, has yet to address remaining strategic deficiencies.

“Encouragingly, the Philippines has made some positive progress, which has been acknowledged, but work remains. I urge the Philippines to complete this action plan,” Kumar said in reply to the question posted by The STAR.

The FATF president cited two strategic deficiencies that the Philippines needs to address immediately.

Kumar said there is a need to implement controls to mitigate anti-money laundering and terrorist financing risk that are linked to junket operations in relations to casinos.

He also cited the need to increase investigations and prosecutions of money laundering and terrorist financing cases that are in line with the Philippines’ risks and context.

The global dirty money watchdog also identified other concerns including demonstrating that effective risk-based supervision of designated non-financial business and professions (DNFBPs) is occurring as well as  enhancing and streamlining law enforcement agencies’ access to beneficial ownership information and taking steps to ensure that information on beneficial ownership is accurate and up-to-date.

The FATF is urging the Philippines to swiftly implement its action plan to address the strategic deficiencies as soon as possible as all deadlines expired in January 2023.

“So again, these are aspects that need to be fully addressed for the Philippines to exit the gray list,” Kumar stressed.

Being placed on the gray list of the global dirty money watchdog has tangible consequences for the country’s economy and financial system as this restricts cross-border transactions particularly remittances from overseas Filipino workers, leading to difficulties in obtaining credit and limiting inward foreign investments.

In a statement, the Anti-Money Laundering Council (AMLC) said President Marcos ordered relevant government agencies in January to expedite efforts in addressing deliverables set by FATF within the year.

“This improvement in our AML/CFT regime is a strong recognition of the government’s efforts in curbing terrorism and terrorism financing incidents in the country. It also sends a positive signal to the international community on the unwavering commitment and continuous progress made by the Philippines in this front,” AMLC Secretariat executive director Matthew David said.

Despite remaining on the gray list, David said the FATF has considered accomplished action plan items related to terrorism financing identification and investigation.

“As we continue following the marching orders set by the President, a whole of nation approach remains vital moving forward. We are happy that the collaborative effort among agencies in addressing areas for improvement as suggested by the FATF has been cited,” David added.

Led by President Marcos and supported by the executive secretary, the National Anti-Money Laundering/Counter-Terrorism Financing/ Counter-Proliferation Financing Coordinating Committee (NACC) has played a pivotal role in guiding and instructing relevant agencies, ensuring a unified approach to addressing the FATF’s requirements.

“The government remains dedicated to strengthening the country’s position in the global fight against financial crimes,” David said.