The Philippines, through the Bangko Sentral ng Pilipinas (BSP), has assured the International Monetary Fund (IMF) that it will achieve “substantial progress” to be removed from the Financial Action Task Force’s (FATF) grey list by early next year.
The Paris-based FATF, the global institution fighting against money laundering and terrorist financing, has placed the country in its grey list in mid-2021 as a jurisdiction under increased monitoring which means it is “actively working with the FATF to address strategic deficiencies” to counter “money laundering, terrorist financing, and proliferation financing."
The Philippines has reiterated to IMF during its recent bilateral discussions that it remains fully committed to completing all FATF action items needed to exit the FATF watchlist.
The IMF seems satisfied that the Philippines has an “express optimism that substantial progress could be made by early 2024.”
The deadline to complete the full action plan was by January 2023, which was missed. But, according to the IMF in its report, the Philippines is “committed to implementing the action plan and some progress has been made since then, for instance on financial institutions’ enhanced understanding of targeted financial sanctions obligations.”
“However, the (FATF) determined at the June 2023 plenary that there are still deficiencies. The key remaining gaps identified by the FATF are in the areas of effective risk-based supervision of designated non-financial businesses and professions, mitigating risks associated with casino junkets, enhancing law enforcement agencies’ access to beneficial ownership information, investigating and prosecuting complex money laundering cases, and increasing the identification, investigation, and prosecution of terrorism financing cases. Separately, reforming the bank secrecy law will enhance the BSP’s supervisory powers and strengthen AML/CFT (anti-money laundering/combatting terrorist financing),” it noted.
The IMF also noted that the Philippines continue to face “significant challenges in the effective implementation” of FATF recommendations.
It said “the Fund should stand ready to help in this regard, especially given the Philippines remaining grey-listed as of January 2023 and the authorities’ objective of exiting the list in 2024.”
“Efforts to progress on outstanding AML/CFT issues needs to be stepped up to support a swift and successful exit from the FATF gray list,” said the IMF.
Earlier this month, BSP Governor Eli M. Remolona Jr. likewise expressed his hope that the country’s whole-of-government approach is enough to get delisted after more than two years on the FATF watchlist.
Remolona said that by February next year, “we will know whether we stay on the list or leave the list entirely which is what we want.”
He reiterated that the Anti-Money Laundering Council (AMLC), which he chairs, is fully aware of the weak spots and the areas that needs more work to convince FATF that the Philippines should be taken out of their watchlist.
Between now and February, Remolona said FATF assessors will visit the country to review and evaluate the progress made in terms of the requirements to get delisted.
After the assessors’ evaluation is completed from the country presentation of its progress report, they will make a recommendation to the FATF Board on whether or not it is time to remove the Philippines from the watchlist. An announcement is expected to be made by February next year.