The Philippines wants to leave the FATF gray list

The Paris-based Financial Action Task Force (FATF) publishes the list three times a year.

From October 24 the Philippines remained in the lineup of “jurisdictions under enhanced surveillance” along with twenty other countries, including Haiti, Lebanon, South Africa and Yemen.

However, the FATF says the jurisdiction has “substantially completed” an 18-point action plan to restore financial integrity. The country also has “the necessary political commitment” to continue improvements. Pending the final assessments, the FATF could delist the country as early as February 2025.

Back in black

According to the Philippine researcherWithout comprehensive measures, the Philippines could have found itself back on the infamous blacklist of countries at high risk of financial crimes, joining North Korea, Iran and Myanmar.

The country was last blacklisted in 2002. At the time, Asia’s second most populous country had virtually no legal AML framework.

In 2003, after the government established its first Anti-Money Laundering Actthe FATF has removed the Philippines from the list.

More and stronger guarantees

Last week, the FATF praised the country for meaningful reforms. They include:

• Ensure that regulators use AML/CFT controls to reduce the risk of financial crime
• The use of financial intelligence to detect such crimes
• Increasing investigations and prosecutions
• Addressing deficiencies in the Philippines’ monetary systems to combat money laundering, terrorist financing and proliferation financing (i.e. providing money or services to illegal entities dealing in weapons of mass destruction)

Last year, President Ferdinand Marcos Jr. directed all government agencies to join the fight, adopting the National Anti-Money Laundering, Counter-Terrorism Financing and Counter-Proliferation Financing Strategy (NACS) from 2023-2027.

And this year he banned it Philippine Offshore Gaming Operations (POGOs), an industry that had become a haven for financial crimes.

“A huge impact” on global financial security

Philippines Executive Secretary Lucas Bersamin praised the pending delisting “as a testament to the hard work and coordination among government agencies… We must continue our efforts to ensure that our reforms are implemented and sustained.”

According to the Manila BulletinFATF President Elisa de Anda Madrazo called the development an “example of the positive impact this process can have in a country. With billions of dollars flowing in annually and the sheer volume of cross-border transactions, the progress the Philippines makes will have a huge impact on the security of the international financial system.”