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The Financial Action Task Force (FATF) has removed the Philippines from its grey list of jurisdictions under enhanced monitoring, praising the government for better supervision of casino junkets and other at-risk sectors.
FATF on Friday (February 21) declared the Philippines to be a jurisdiction “no longer subject to increased monitoring by the FATF”, a milestone in the nation’s efforts to advance anti-money laundering and counter-terrorism financing (AML/CTF) policy.
FATF said in its statement that the Philippines had overcome numerous deficiencies after its last downgrade in a 2012 review, including “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets”.
Other areas of improvement include better risk-based supervision of designated non-financial businesses and professions (DNFBPs), such as real-estate agents, accountants, law firms and dealers of precious metals and stones, the imposing of sanctions on illegal remittance agents, and an increase in prosecution of cases of money laundering and terrorism financing.
“The Philippines should continue to work with [the Asia/Pacific Group on Money Laundering, APG] to sustain its improvements in its AML/CFT system,” it said.
“The FATF encourages the Philippines to continue its work in ensuring that its CFT measures are appropriately applied, particularly the identification and prosecution of [terrorism financing] cases, and are neither discouraging nor disrupting legitimate NPO [non-profit organisation] activity.”
The upgrade in the Philippines’ status is a boon for foreign investment confidence and for the nation’s formidable population of migrant workers, whose return remittances will suffer less obstruction. The stock market is also expected to strengthen on the back of the news.
The gambling industry, meanwhile, gains reputationally and logistically from a partial lifting of the weight on its shoulders after years of compliance remediation following money laundering incidents and allegations implicating large and small casinos alike.
Gambling regulator PAGCOR was quick to take its share of the credit for the FATF move, saying in a statement on Saturday that exiting the greylist “should help bring in more foreign investments to the country”.
“We are honoured to have played a crucial part in this development, and the public can rest assured that PAGCOR will continue to ensure that all our licensees are compliant with all anti-money laundering rules and regulations,” said Alejandro Tengco, PAGCOR’s chairman and CEO.
“We also commit to sustain the fight against money laundering and terrorist financing in the entire Philippine gaming industry, including our online gaming operators, land-based casinos and junket operators,” the PAGCOR chief said.
The FATF review in 2021 and Friday’s announcement are notable for identifying casino junkets as a major risk despite segment decline hastened by pandemic travel and work restrictions, and Beijing’s threats against Chinese players, staff and any casino that hosts them.
In contrast, the notorious foreign-facing online gambling sector, whose licensed operators (POGOs) were banned at the end of last year amid criminal infiltration, proliferation of crime, possible espionage and high-level corruption of government, did not rate a mention.
FATF’s announcement and possible credit rating upgrade have also prompted concerns from some journalists and activists, who accuse the government of “red-tagging” progressive social and political movements with accusations of terrorism in order to beef up prosecutions.
The Philippine Center for Investigative Journalism on Sunday reported that regional police issued a memorandum in October 2024 explicitly linking FATF requirements to the investigation of at least one activist.
The long-standing practice of Philippine police and military units intimidating left-wing activists, journalists and human rights proponents, particularly in regional areas, may have been accelerated by use of the FATF campaign as a pretext to intimidate and crush dissenting voices, it said.
FATF instead said the government has demonstrated that “appropriate measures are taken with respect to the NPO sector (including unregistered NPOs) without disrupting legitimate NPO activity”.
The FATF announcement on Friday also noted 23 nations remaining on the greylist and the addition of Asian gambling jurisdictions Nepal and Laos.
Among the 23 nations to retain greylist status are Monaco, South Africa, Bulgaria and Croatia.
