Philippines seen exiting FATF gray list by 2025

The Philippines is on track to exit the Financial Action Task Force (FATF) “gray list” by 2025, having successfully implemented the 18 action plans mandated by the Paris-based anti-money laundering body. The FATF announced this development following its October 2024 plenary meeting, where it noted that the Philippines has substantially completed its action plan and is now due for an on-site assessment to confirm the sustainability of its anti-money laundering and combating the financing of terrorism (AML/CFT) reforms.

The FATF's assessment highlights the Philippine government’s commitment to maintaining political support for these reforms moving forward. Key reforms noted include the establishment of risk-based supervision of designated non-financial businesses and professions (DNFBPs), enhanced AML/CFT controls for casino junkets, and stricter registration requirements for money or value transfer services (MVTS), along with enforcement actions against unregistered remittance operators.

In addition, the FATF praised the Philippine government for improving access to beneficial ownership information for law enforcement agencies, increasing the use of financial intelligence, and demonstrating significant progress in investigating money laundering and terrorist financing cases. The organization also acknowledged measures taken to support non-profit organizations while ensuring their activities are not disrupted.

The Anti Money Laundering Council (AMLC), the Philippines’ financial intelligence unit, stated that these developments are paving the way for quicker and more affordable remittance options for Overseas Filipino Workers (OFWs) and other transactions. Since being placed on the FATF gray list on June 25, 2021, the Philippines has been working diligently to meet the requirements for delisting.

As part of this process, the FATF’s Asia/Pacific Joint Group is scheduled to conduct a visit in early 2025 to verify the sustainability of the reforms and assess the political commitment of the Philippine government toward improving its AML/CFT regime. The AMLC underscored that this upcoming assessment is crucial for the Philippines' potential removal from the gray list.

Failure to fully address the action items could place the Philippines at risk of being blacklisted, which would lead to additional restrictions and checks on financial transactions with FATF member countries, resulting in delays and increased costs for consumers.

In response to the FATF's latest findings, Executive Secretary Lucas Bersamin emphasized the achievement as a testament to the collaborative efforts across government agencies, reaffirming the Philippines' commitment to upholding FATF standards to safeguard its financial system.

The interagency task force responsible for the action plan has made significant strides, with Malacañang issuing Executive Order No. 33, mandating all relevant government offices to adopt the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy for 2023-2027.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona Jr. previously indicated that the AMLC would address the last three action plan items by October, further strengthening the country’s prospects for a successful delisting in 2025. The FATF has recognized the Philippines for its high-level political commitment to collaborating with both the FATF and the Asia/Pacific Group on Money Laundering to enhance the effectiveness of its AML/CFT measures since June 2021.

Before its current gray list status, the Philippines last faced increased monitoring from the FATF in 2013. The implications of the gray list status on the country's financial reputation have prompted a concerted effort to achieve compliance and improve the overall stability of its financial systems.