Philippines to complete national risk assessment this year – AMLC

MANILA, Philippines — The Philippines is set to complete its latest National Risk Assessment (NRA) this year, a crucial measure in ensuring the country remains off the Financial Action Task Force (FATF) gray list following its exit in February.

In a document posted on its website, the Anti-Money Laundering Council (AMLC) said the Philippines is in the process of finalizing its NRA, which will assess emerging risks and strengthen measures to combat money laundering, terrorism financing and the proliferation of weapons of mass destruction.

“The NRA is expected to be completed this year, and it will be key for the next round of evaluation in 2027,” the AMLC said.

The Bangko Sentral ng Pilipinas (BSP) earlier said the NRA is an integral component to develop risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) measures.

“In line with this, the NRA is critical in maintaining an updated understanding of the ML/TF environment and risk posture of the country,” the BSP said.

“The results of the NRA will inform the supervising authorities, other law enforcement agencies, and covered persons in the efficient allocation of resources and implementation of risk-based measures in preventing or mitigating ML/TF risks,” it added.

The NRA relies on both quantitative and qualitative data, gathered from various reports and relevant sources, to provide a comprehensive analysis of financial crime threats.

In December 2023, the central bank urged all BSP-supervised financial institutions to actively participate in the assessment process to ensure its successful completion.

The Philippines has previously conducted two NRAs to evaluate its exposure to money laundering and terrorism financing risks. The first NRA was completed in 2016 and assessed risks from 2011 to 2014.

The second NRA was published by the AMLC in December 2017 and covered the period 2015 to 2016. It provided a more in-depth evaluation of the effectiveness of the country’s AML/CFT mechanisms, identifying high-risk areas such as drug trafficking, smuggling, environmental crimes and financial fraud.

The FATF placed the Philippines on its gray list in 2021 due to deficiencies in AML/CTF framework.

But after implementing necessary reforms, the Philippines was officially removed from the list in February.

Still, the AMLC cautioned that sustaining compliance is crucial. Being on the gray list meant increased reporting requirements to the FATF and limited business relationships with international financial institutions.

“If the FATF determines after the next round of evaluation (which is scheduled in 2027 for the Philippines) that the jurisdiction has deficiencies in its AML/CTF regime, it is possible for a country to be gray listed again in the future,” the AMLC said.

The Philippines has had previous encounters with FATF scrutiny. It was blacklisted in 2000 for lacking an anti-money laundering law but was removed in 2003 after enacting the Anti-Money Laundering Act.

The country returned to the gray list in 2010 due to weak regulations but successfully exited in 2013 after tightening its framework.