Government agencies in the Philippines say they’re making strides to strengthen the nation’s anti-money laundering (AML) and counter-terrorism financing (CTF) protocols.
Their goal: to be removed from the “grey list” of the Paris-based Financial Action Task Force (FATF), an international watchdog that compiles black and grey lists of countries most at risk for financial crimes.
According to Inside Asian Gaming, the Philippine Anti-Money Laundering Council said government agencies are all in on the effort to boost financial controls and prevent related crimes. The Philippines first made the grey list in June 2021 for failing to prevent, identify and prosecute financial crimes, some of which have been linked to casino junkets.
Last fall, President Ferdinand Marcos Jr. issued a memo calling for the “urgent implementation” of the country’s National AML, CTF and Counter-Proliferation Financing Strategy of 2023-2027. In February, AML Council Secretariat Executive Director Matthew M. David said 44 “concerned agencies,” including the Philippine Amusement and Gaming Corp. (PAGCOR), have “expressed commitment to complete their respective action plan items” on junkets and designated non-financial businesses and professions (DNFBPs) in hopes of leaving the list this year.
“Through collaboration among the agencies, we are strengthening our resolve to address the remaining action plan items suggested by FATF and report the progress to the president,” David said.
According to FATF, the Philippines has “taken steps towards improving its AML/CFT regime, including by identifying and investigating (terrorism financing) cases.” In a response, David said, “This improvement in our AML/CFT regime is a strong recognition of the government’s efforts in curbing terrorism and terrorism financing incidents in the country. It also sends a positive signal to the international community on the unwavering commitment and continuous progress made by the Philippines in this front.
“As we continue following the marching orders set by the president,” he continued, “a whole of nation approach remains vital moving forward. We are happy that the collaborative effort among agencies in addressing areas for improvement as suggested by the FATF has been cited.”
However, in a recent opinion piece in the Philippine Star, political scientist and commentator Alex Magno said the Philippines “will remain on that list.”
“Grey is just a shade lighter than black,” Magno wrote. “Being on the grey list is just one grade better than being on the black list. Not too many shades there … This could be a major reason why the Philippines receives only 4 percent of investment flows into the ASEAN region.
“We have been trying to graduate from the grey list, to little avail … We continue to wallow in financial purgatory,” he said. “Even as a great toll is being taken on our economic progress, our legislators continue to drag their feet on the reforms that need to happen.”
A presence on the grey list can scare off foreign investors, make credit more difficult to obtain, inhibit cross-border transactions and make global banks reluctant to do business in a country. According to the FATF website, black- and grey-listing “damages a country’s reputation and reduces its international standing.”
But the pressure brought to bear by the list can lead to positive change. Last week, FATF announced it was removing the United Arab Emirates from the grey list due to the UAE’s “significant progress in improving” its anti-money laundering and counterterrorism financing policies. Barbados, Gibraltar and Uganda will also be removed from the list, the watchdog said in a February 22 statement.
In addition to the Philippines, the grey list now includes Bulgaria, Burkina Faso, Cameroon, Croatia, the Democratic Republic of Congo, Haiti, Jamaica, Mali, Mozambique, Nigeria, Senegal, South Africa, South Sudan, Syria, Tanzania, Turkey, Vietnam and Yemen.
The black list is limited to three countries: the People’s Republic of Korea, Iran and Myanmar.
