Banks’ cooperation sought in review of dirty money rules

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has called on banks and other supervised financial institutions to support preparations for the Philippines’ 2027 anti-money laundering review by providing information to help demonstrate that safeguards against illicit funds are working.

In a circular letter, BSP Deputy Governor Lyn Javier sought the institutions’ full cooperation in the country’s mutual evaluation, an assessment of its financial crime defenses and how effectively these are implemented.

The review will examine measures against money laundering as well as safeguards against financing terrorism and the proliferation of weapons of mass destruction.

The BSP said information from supervised institutions and other credible sources would be critical to demonstrating the effectiveness of both its oversight and the preventive measures implemented by financial institutions.

Banks and other supervised entities may also be tapped to provide insights into the country’s sustained compliance with international standards.

“All BSFIs are enjoined to extend their full cooperation and active participation in the BSP’s related activities and data-gathering initiatives, until the adoption of the ME Report,” the circular stated, referring to BSP-supervised financial institutions and the mutual evaluation report.

The Philippines’ fourth round of evaluation is scheduled for 2027 under the global fifth round of mutual evaluations of the Financial Action Task Force (FATF), the international body that sets standards against money laundering and terrorist financing.

According to the circular, the assessment places greater emphasis on the country’s risks and circumstances, alongside demonstrated effectiveness of its safeguards.

The evaluation has two main components. Technical compliance examines whether the necessary laws, regulations and legal instruments meet the FATF’s 40 recommendations.

The effectiveness assessment, meanwhile, considers whether these measures are working. Assessors will examine results across 11 key areas to determine how well the country is achieving the intended outcomes.

The preparations come as authorities face scrutiny over their response to suspected illicit financial flows linked to alleged irregularities in flood control projects.

BSP Governor Eli Remolona Jr. acknowledged in February that the controversy posed a risk to the country’s standing, while saying authorities were working to prevent a return to the FATF gray list.

The gray list covers jurisdictions placed under increased monitoring while they address weaknesses in their systems against money laundering and terrorist financing.

The Philippines exited the list in February 2025 after addressing deficiencies identified when it was placed under increased monitoring in June 2021.

The Anti-Money Laundering Council (AMLC), the country’s financial intelligence unit, has previously identified access to records as a challenge in investigating the flood control controversy.

In an earlier interview with The STAR, AMLC executive director Ronel Buenaventura said delays and incomplete submissions of contracts, disbursement vouchers, bank statements and other transaction records were hampering financial analysis and efforts to trace suspected criminal proceeds.

Buenaventura has also identified stronger asset recovery powers as a priority ahead of the evaluation, saying further amendments to the Anti-Money Laundering Act were needed.