The Philippines has officially exited the FATF grey list, signaling stronger financial security and regulatory compliance.
After three years, the Philippines has exited the Financial Action Task Force (FATF) “grey list.” This means the regulatory body has cleared the country of any deficiencies in its anti-money laundering and counter-terrorism financing regime.
“The plenary agreed to take the Philippines off the grey list in recognition of the completion of their action plan, which was agreed in June of 2021. Amongst other efforts and results, the Philippines is now actively combating the risk of dirty money flowing through casinos in the country,” FATF President Elisa de Anda Madrazo said.
This move is also important for the country’s thriving gaming scene. But how important is this to the country’s financial and gaming sector as a whole?
What is the FATF, and how did the Philippines enter the “grey list?”
First off, it’s important to know what the FATF is and what it does. The FATF, based in Paris, France, is a regulatory body that sets metrics against money laundering and terrorist financing. When a country is on FATF’s grey list, it means the country is lacking in AML measures. As a result, foreign investors will have to heavily monitor and regulate their financial measures in a country.
The Philippines entered the list in 2021 because of inadequate oversight, particularly in the gaming sector. It can also be recalled that casino junkets at the time here on the rise. A major contributing factor was the rise in suspicious transactions linked to casino junkets, which facilitate high-stakes gambling by offering travel, accommodation, and credit to high-rollers. These activities often involve large cash transactions and cross-border financial movements, overwhelming traditional monitoring systems and creating vulnerabilities for money laundering.
The grey-list status also had tangible consequences beyond the gaming industry.
Overseas Filipino workers (OFWs) here hardly hit by the Philippines being placed in the grey list status, as it faced increased difficulties in sending remittances. As a result, banks imposed additional verification requirements to ensure compliance with international AML standards.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co. underscored the significance of FATF’s decision.
“The removal is quite significant as it signals improved financial compliance and reduced regulatory risks, which can encourage foreign banks to re-enter the market,” he said in a message to Asia Casino News.
He added: “This development will likely enhance the Philippines' competitiveness as an investment destination in Southeast Asia, positioning it more favorably compared to neighboring countries.”
AMLC committed to comply with requirements to exit from the grey list, which analysts and politicians linked to two things: a hefty ban on offshore gaming and heavier regulations against illegal casino junket operations.
The country recalibrating its oversight techniques against some casino and gaming measures contributed to the country’s exit plan from the FATF, Shaun McCamley, founder and managing partner of Euro Pacific Asia Consulting told Asia Casino News.
“PAGCOR has developed a casino-specific risk rating system and, as of January 2022, finalized a supervision and enforcement manual. This manual outlines policies and procedures for risk-based examinations of casinos, prioritizing higher-risk establishments while ensuring adequate coverage of moderate and low-risk entities,” McCamley explained in an email message.
President Ferdinand Marcos Jr. by the end of 2024 officially outlawed POGOs. Marcos Jr. and other POGO skeptics believed they were largely linked to money laundering, kidnapping, and human trafficking, among others. Senator Sherwin Gatchalian believes FATF’s move to remove the Philippines from the grey list reversed what he described as “reputational damage” done by POGOs.
“The FATF's action is a recognition of the country's efforts in combating financial crimes, including money laundering, organized crime, and terrorism. This reaffirms what we have long maintained,” Gatchalian shared in a statement.
What’s Next for the Philippines?
While exiting the grey list is a significant achievement, the Philippines must sustain this progress as it prepares for another FATF assessment in 2027. Financial analysts warn that continued vigilance will be necessary to prevent regression.
Angela HanLee, Equity Research Analyst at Bloomberg Intelligence, acknowledged the potential benefits of this development but cautioned that concerns over human trafficking could continue to impact gaming revenues, particularly from Chinese visitors.
“I think it could imply shrinkage of organized crimes and alleviate visitors’ safety concerns, benefiting tourism and land-based gaming revenue,” HanLee told Asia Casino News.
She added: "But the pressure will remain for some time, especially for gaming revenue from Chinese gamblers, due to the recently elevated human trafficking concerns in the region."
Asked on what casinos and other stakeholders in the gaming industry should do to help sustain the country’s FATF standing, Ravelas said: “The key is really KYC. Know your client.”
Enforcement bodies normally want institutions and customers to comply with KYC standards to prevent illegal activity, a component of anti-money laundering measures.’
McCamley echoed these sentiments, adding that the government and casinos should take proactive measures to enhance compliance and oversight. This includes stronger law enforcement and inter-agency collaboration, urging AMLC, PAGCOR, and the country’s central bank (Bangko Sentral ng Pilipinas) to better track suspicious transactions.
“[The Philippine government should] conduct regular compliance audits and enforce penalties on non-compliant casinos, increase sanctions against casinos that fail to report suspicious transactions, including revoking licenses, [and] encourage whistleblower protection programs to expose illicit activities in the gaming sector,” McCamley advised.
He also encouraged stricter identity verification processes and heightened scrutiny of high-risk players, such as politically exposed persons (PEPs) and high-volume bettors. Online gaming platforms were also urged to track their transactions in real time and secure the accounts of their users through multi-factor authentication. This includes watching cryptocurrency transactions linked to gaming.
Read related article: Guidelines Could Cut FATF Grey List Countries In Half
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