The Philippines Could Exit FATF Grey List
The Philippines is set to learn this week whether it has successfully exited the Financial Action Task Force (FATF) grey list, a designation for nations under increased monitoring due to deficiencies in their anti-money laundering and counter-terrorism financing frameworks. The FATF will conduct its second plenary under the Mexico Presidency of Elisa de Anda Madrazo from February 19 to 21 in Paris, where representatives from over 200 member nations and observer organizations will participate in discussions on global financial security.
LISTEN TO THIS ARTICLE:The plenary will focus on developments in combating illicit finance, which is recognized as a key driver of criminal activities worldwide. One of the main topics on the agenda is the enhancement of financial inclusion through a risk-based implementation of FATF Standards, a priority under the current Mexican Presidency.
Additionally, delegates will review the progress of jurisdictions that have been previously identified as posing financial system risks. The official outcomes of the plenary will be revealed at a press conference on Friday.
The Philippine government, under the administration of President Ferdinand Marcos Jr., has prioritized efforts to secure the country's removal from the grey list. The FATF acknowledged in October 2023 that the Philippines had largely completed an 18-point action plan aimed at strengthening its anti-money laundering and counter-terrorism financing (AML/CFT) measures.
An on-site assessment was subsequently conducted to confirm that the implementation of these reforms was underway, was being maintained, and had sufficient political backing to ensure long-term adherence.
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Casino Junkets Still in a Bad Light
One of the primary areas of improvement identified by the FATF was the implementation of AML/CFT controls to address financial risks associated with casino junkets. The Philippine Amusement and Gaming Corporation (PAGCOR), the nation's gaming regulatory authority, was among 44 government agencies directed by President Marcos in late 2023 to take necessary steps in aligning with FATF recommendations. These coordinated efforts sought to strengthen the country's regulatory framework and meet the FATF's exit criteria.
The Philippines' removal from the grey list is regarded as a crucial step in fostering economic growth by facilitating smoother cross-border financial transactions. Being on the grey list often results in increased scrutiny from international financial institutions, leading to potential delays in transactions, higher compliance costs, and reduced investor confidence.
An exit from the list would signify that the country has effectively addressed deficiencies in its financial regulatory systems, enhancing its reputation in the global financial community. Currently, the Philippines is on the list alongside Croatia, Kenya, South Africa, Vietnam and 19 other countries.
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