The International Monetary Fund believes the Philippines has made significant strides in combatting money laundering and terrorist financing.
The Philippines has made substantial progress in its fight against money laundering and terrorist financing, according to the International Monetary Fund (IMF).
This positive assessment follows the country's efforts to address concerns raised by the Financial Action Task Force (FATF), a global watchdog focused on these illicit activities.
As reported by the Inquirer, IMF said the Philippines made “significant progress” in tackling outstanding anti-money laundering and counter-terrorism financing (AML/CFT) issues. This progress was further validated by the FATF's initial determination that the Philippines has largely fulfilled its action plan.
“The Financial Action Task Force’s (FATF) initial determination that the Philippines has substantially completed its action plan is welcome,” IMF said in its report.
The FATF had placed the Philippines on its "grey list" in June 2021, a designation indicating increased monitoring due to concerns about the country's AML/CFT framework. Being on the grey list can have negative consequences for a country's reputation and its ability to attract foreign investment. However, with the successful completion of the action plan, the Philippines has taken a significant step towards exiting this list.
This action plan was a set of measures the Philippines committed to implementing to address identified weaknesses in its financial system. This addressed key areas such as improving on supervising “Designated Non-Financial Businesses and Professions” such as casinos, real estate, and dealers in precious metals–all of which are vulnerable to money laundering.
Another key area involved enhancing controls to prevent money laundering through casino junkets, which are high-roller gambling tours.
The Philippines also tightened its requirements for Money or Value Transfer Services, which are commonly used for remittances. This measure aims to prevent unregistered and illegal remittance operators from facilitating illicit financial flows. Additionally, the country improved law enforcement access to beneficial ownership information, which helps to identify the real owners of companies and prevent the use of shell companies for money laundering.
Other improvements included increasing the use of financial intelligence in investigations, boosting the number of money laundering and terrorist financing prosecutions, and implementing measures for the non-profit sector to prevent abuse for terrorist financing purposes. The Philippines also enhanced its framework for targeted financial sanctions related to both terrorist financing and proliferation financing, which involves the financing of weapons of mass destruction.
While the completion of the action plan is a major achievement, the IMF emphasized the need for continued vigilance. They stressed the importance of keeping up with evolving FATF standards, especially in preparation for the next mutual evaluation in 2027. The IMF also suggested that reforming the bank secrecy law could further strengthen the country's AML/CFT regime and enhance the supervisory powers of the Bangko Sentral ng Pilipinas, the country's central bank.
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