THE PHILIPPINES is unlikely to be included in the Financial Action Task Force’s (FATF) blacklist of countries with high risk of money laundering and terrorism financing, the Bangko Sentral ng Pilipinas (BSP) chief said.
“We will know whether we stay on the (gray) list or leave the list entirely (in February), which is what we want. There might be a chance that we’ll go into the blacklist but that is very unlikely,” BSP Governor Eli. Remolona, Jr. said on Wednesday evening.
“But all hands on deck… we’re doing everything we can to show that we’re making progress in all those areas,” he added.
The Philippines has been in the global financial crime watchdog’s “gray list” of jurisdictions under increased monitoring for dirty money risks since June 2021.
In October 2023, the FATF said the Philippines remains on the gray list, citing the need to further strengthen its action plan to address strategic deficiencies related to casino junkets, nonprofit organizations, and beneficial ownership.
As part of its efforts to exit the gray list, the Philippines committed to comply with numerous action plan items.
Mr. Remolona said if the Philippines failed to exit the gray list by January next year, correspondent banks may start to cut ties with the Philippines. These are financial institutions that provide services to another bank, usually in another country.
“There are fewer banks that are willing to deal with us (now that we’re on the gray list). If we’ll be in the blacklist, that gets worse… When (correspondent banks are) in doubt, they won’t deal with the Philippines,” he said in mixed English and Filipino.
Only three countries are currently in the FATF’s blacklist — North Korea, Iran and Myanmar.
Mr. Remolona noted that if the Philippines would be included in the blacklist, correspondent banks would ask for more requirements amid heightened due diligence.
In 2002, the FATF blacklisted the Philippines for having no legal anti-money laundering framework.
The passage of Republic Act (RA) No. 9160 or the Anti-Money Laundering Act of 2001 as well as its amendments through RA 9194 paved the way for the removal of the Philippines from the blacklist in 2003.
Mr. Remolona said the FATF may also cite the recent bombing incident in the Islamic city of Marawi in southern Philippines as a concern.
“(The incident) makes the (FATF) more demanding. They’re scrutinizing the terrorist financing. The bombing implies there was some terrorist financing,” he said.
“But the other side of the story is, the bombing was in retaliation for us being more strict on terrorist financing. We can argue that that shows we’re trying harder, but we don’t know how they will see it,” he added.
A deadly blast killed four people during a Catholic mass at a gymnasium in the Mindanao State University campus in Marawi City on Dec. 3. — Keisha B. Ta-asan