The Philippines is still on the watchlist of global “dirty money” police, Paris-based Financial Action Task Force (FATF), but the government is hopeful the country is moving closer to exiting the FATF gray list.

The FATF in a statement on June 28 named the Philippines as one of the 21 jurisdictions under increased monitoring with updates that are working actively with FATF to address deficiencies to counter money laundering, terrorist financing, and proliferation financing. The gray list is the common name for the list of jurisdictions with increased monitoring for dirty money issues.

The FATF reviewed the country’s progress report last February 2024 and the latest statement included updates.

In its own statement, the Anti-Money Laundering Council (AMLC) which is led by the Bangko Sentral ng Pilipinas (BSP), said late Friday that the Philippines has addressed items in its International Co-operation Review Group (ICRG) action plan. The ICRG analyzes high-risk jurisdictions and recommends specific actions to deal with the money laundering and terrorism financing risks.

“We welcome FATF’s recognition of the country’s progress in strengthening its position in the global fight against financial crimes, even as we remain focused on addressing remaining action plan items,” said AMLC Executive Director Matthew M. David.

The FATF has reiterated that since June 2021, the Philippines has made “a high-level political commitment” to work with the FATF and the Asia/Pacific Group on Money Laundering (APG) to strengthen the effectiveness of its anti-money laundering (AML) and combating financing of terrorism (CFT).

“(The) Philippines has taken significant steps towards improving its AML/CFT regime, including by demonstrating an increase in ML (money laundering) investigations and prosecutions in line with risk; enforcement of beneficial ownership transparency obligations and law enforcement access to those beneficial ownership data records; and that risk-based supervision of DNFBPs (designated non-financial businesses and professions) is occurring,” said FATF.

The FATF added that the Philippines “should continue to work on implementing its action plan to address its strategic deficiencies”. These include the following: demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets; applying cross-border measures to all main sea/airports including detection of false declarations of currency and confiscation action in line with risk; and demonstrating an increase in the prosecution of terrorist financing cases in line with risk.

The AMLC said the Philippines will indeed continue to work on implementing its action plan to address remaining deficiencies, such as those identified by the FATF.

The original deadline given the Philippines to implement action plans was January 2023. After a year of extension or until January 2024, the country sought another extension to address the deficiencies.

Last January, Malacanang ordered concerned or relevant government agencies implementing AML/CFT measures to expedite efforts in “addressing deliverables set by FATF within the year.” Besides AMLC, the National Anti-Money Laundering/Counter-Terrorism Financing/ Counter-Proliferation Financing Coordinating Committee (NACC) makes sure there is a unified approach among relevant agencies in enforcing action plans as per the FATF requirements.

The Philippines has been one of jurisdictions closely watched by FATF since June 25, 2021. As a watchlisted country, it means the Philippines is subject to increased monitoring and is required to actively work with the FATF. Failure to be removed from the gray list will have an impact on the country’s financial reputation on a global scale.

As of June 28, there are 21 countries under the gray list with updated statements from the FATF including the Philippines. The other countries are Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of Congo, Haiti, Mali, Mozambique, Nigeria, Senegal, South Africa, South Sudan, Tanzania and Vietnam.

Meanwhile, FATF said Kenya, Namibia, Syria and Yemen deferred their reporting. The FATF also announced that Monaco and Venezuela has been added to the gray list as of June 28 while also removing Türkiye and Jamaica.