By means of Luisa Maria Jacinta C. Jocson, Reporter
The exit of the Philippines of The “Gray List” of the Financial Action Task Force (FATF) is seen as an improvement of the sentiment of investors, but analysts noted that continuous reforms are needed to support progress.
On Friday, the FATF removed the Philippines from the list of jurisdictions under increased monitoring for “dirty money” after a “successful” on-site visit.
BSP -Governor Eli M. Remolona, Jr. said in an SMS message that the removal of the Philippines from the Gray List of the FATF “will help our overseas Philippine employees (OFWs) and promote more investments in our economy.”
“It also complements our continuous efforts to turn the financial system into a stronger engine of sustainable growth,” he added.
Mr Remolona lived the FATF -Plenary and working group meetings at those took place in Paris, France from 17 February to 21 February.
“Indeed, the Philippines came from our gray list. They showed our members that they fully completed the action plan, “said Fatf president Elisa de Anda Madrazo late at a press conference on Friday.
The Philippines were on the gray list of the FATF for more than three years or since June 2021.
The Dirty Money Watchdog noted that the Philippines ‘Positive Progress in tackling strategic anti-money laundering practices and combating the financing of terrorism and proliferation finance (AML/CPF/CPF) shortcomings that were previously identified’.
“The Philippines have completed their action plan to resolve the identified strategic shortcomings within agreed timetables and will no longer be subject to the increased monitoring process of the FATF,” said it.
Financial secretary Ralph G. Recto said in a statement that the removal of the Philippines from the Gray List is a “seal of good household that strengthens the trust of the public in our financial system.”
“By maintaining the highest standards of financial administration, we will attract more foreign direct investments and expand more trading partners that will help accelerate economic growth,” he said.
This would also support the push of the government to achieve an A-credit rating, Mr Recto added.
The Anti-Money Laundering Council (AMLC) said that the exit from the gray list will facilitate faster and cheaper cross-border transactions, will reduce the compliance barriers and improve financial transparency. “
Being part of the gray list for recent years is a “taxing process for banks and other financial institutions,” said AMLC.
“This process discourages correspondent bank relationships and international financial flows to the country. The exit will reduce the transfer requirements of international funds, benefit Filipino individuals and companies. “
The AMLC also said that the status of the gray list had impeded other countries from doing business with the Philippines.
“Moreover, even prior to the gray list, some foreign supervisors have already drawn up strict requirements or fines to financial institutions related to entities in the Philippines and other countries who were supposed to have weak anti -diDirty money regimes.”
“This has encouraged some banks to simply do business with entities in those countries instead of managing possible money laundering or terrorist financing risks. The FATF decision can encourage foreign banks to revise and resume their business relationship and transactions with Filipino financial entities. “
President Ferdinand R. Marcos, Jr. Last year dedicated all the agencies involved to work on efforts to leave the list by October.
In July, Malacañang issued an executive order that all government offices require to assume national anti-Wit wages, financing for the fight against terrorism and financing strategy for counter-proliferation 2023-2027.
“With our exit of the FATF Gray list, we are optimistic that the international community will see the Philippines as an even more attractive destination for business and investments,” said Emilio B. Aquino, chairman of the Securities and Exchange Commission (SEC).
Chester B. Cabalza, founder of the International Development and Safety Cooperation based in Manila, said that this is a “festive moment” for the country.
“If an aspiring country in the middle income, such a transformation will give more credibility if an investment destination in the region without fear that our financial buoyancy comes from dirty money,” he said.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that this would increase the confidence of investors in the Philippines.
“The Philippines would save more processing time and also save on transaction costs, a more desirable scenario such as transactions from the country with the rest of the world with more convenience,” he added.
Mrs. Madrazo of Fatf had also noticed the efforts of the Philippines “when combating the risk of dirty money runs through the casinos.”
The Filipino amusement and Gaming Corp. (Pagcor) said it will continue to strengthen the regulations and strictly follow the local gaming industry.
“We are also committed to maintaining the fight against money laundering and terrorist financing throughout the Filipino gaming industry, including our online gaming operators, land-based casinos and junket operators,” said Pagcor chairman and Chief Executive Officer Alejandro H. Tengco.
Ahead
The FATF, however, said that it will be crucial for the Philippines to maintain the measures about strengthening AML/CFT regimes.
“The FATF encourages the Philippines to continue her work to ensure that its CFT measures are applied correctly, in particular the identification and persecution of TF cases, and are neither daunting or disrupting legitimate nun – Profit organizational activities, “said it.
Mrs. Madrazo also said that the Philippines will receive a new assessment in 2027.
“That will be an opportunity for the FATF to verify that the measures are being maintained and still in place,” she added.
For his part, the AMLC said that it is committed to “guaranteeing long -term compliance with international standards.”
Bienvenido S. Lease, Jr., president of a research consultancy and of the minimum government think tank, said that the Philippines should continue to clamp on illegal trade, a channel for dirty money.
“Illicite trade in tobacco, oil, jewelry, etc., this is a big source of money laundering. The government should break them off, “he said.
Leonardo A. Lanzona, Professor Economy at Ateneneo de Manila University, said that the government should accompany reforms with other measures to better attract investments.
“While leaving the FATF Gray list is taking away an important barrier for investments, the Philippines have to compete for its strengths, such as his young workforce, service-driven economy and tourist potential,” he said.
“Regional competitors are also aggressive to the wishes of investors, ie policy consistency, infrastructure upgrades and targeted investment promotions will be crucial,” he added.
WANTED PROTECTIONS
In the meantime, Jose Enrique said “Sonny” A. Africa, executive director of Think Tank Ibon Foundation, that there must be “stronger guarantees to reduce the increased risk of continuous erosion of social and democratic space.”
“The FATF itself calls nominal to a targeted risk-based approach to the government to maintain the spirit of this with transparent data-driven risk assessments and with sanctions that are governed by a decent process with clear judicial supervision,” Mr Africa said .
The FATF said in his statement that the continuous measures of the Philippines should not hinder legitimate non -profit activities.
“Executive wrong application has already been checked with so -called terrorist financing cases that Motu Proprio has rejected for InsufFIciency of Evidence and no likely cause at least three times through the courts, “said Mr. Africa.
He said that the government “should stop using AML/CFT as political tools to suppress activism and use them against actual financial crimes.”
“It should stop freezing assets of NGOs and individual activists with invented terrorism financing accusations and enforcement of enforcement to systemic financial crimes, including those committed by politically related persons.”
In 2002, the FATF blacklisted the Philippines because he did not have a legal anti-money laundry work. It was removed from the blacklist a year later after the passage of the anti-money laundry practice.