The Philippines is still under “increased monitoring” as it has yet to exit the “gray list” of Paris-based watchdog, the Financial Action Task Force (FATF), which urged the country to “swiftly” tackle its remaining deficiencies against money laundering and terrorist financing as being on the list can restrict cross-border transactions and create reputational risk.
The country has been on the list since June 2021 and is trying to avoid a return to the “black list” which can result in tighter regulations and more expensive remittances.
Staying in the gray list, which is an outcome of FATF’s plenary meeting, marks a stumbling block to President Marcos’ bid to exit by October 2024. The FATF plenary meets three times a year, usually in February, June, and October.
“Three out of 18 action items remain outstanding. Put another way, it means that the Philippines has actually taken action,” FATF president Raja Kumar said.
However, the Philippines has yet to demonstrate the use of credible controls against money laundering and terrorist financing risks from casino junkets, the watchdog noted. It also urged to intensify cross-border measures at all main seaports and airports, including detection of false declarations of currency and confiscations. Finally, FATF wants to see an increase in the prosecution of cases related to terrorist financing.
On the other hand, the country was also credited for improving access of law enforcement agencies to beneficial ownership data that can be used against individuals hiding their illicit activities and dirty money behind complicated corporate structures. The FATF also noted the “risk based” supervision of susceptible entities, such as casinos, lawyers, accountants, and real estate agents.
Despite knowing exactly what needs to be done, the Philippines has been on the FATF gray list for some time now. Some progress may have been made, but whatever we have achieved has remained inadequate. If Filipinos are going to enjoy the benefits of not being included in that list, our government has to do better. If Jamaica and Turkiye have just managed to exit the gray list, the Philippines should be able to do so as well. It is just a matter of the political will of the people in charge.*
