The Financial Action Task Force (FATF) has removed the Philippines from its money-laundering “grey list” of countries due to improvements in its systems for combating money laundering and terrorist financing.
FATF, which describes itself as a “global money laundering and terrorist financing watchdog,” first added the Philippines to its grey list in June 2021, due to shortcomings in the mechanisms designed to prevent illicit financial activities. FATF expressed particular concern about POGOs – Philippine Offshore Gaming Operators – which President Ferdinand Marcos Jr. has since banned due to their connections to “financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder.”
In a statement issued on Friday announcing its removal from the grey list, the FATF said that it “welcomes the Philippines’ significant progress in improving its AML/CFT (anti-money laundering/countering the finance of terrorism) regime” and its efforts to address the “strategic deficiencies” identified by FATF in 2021.
“The FATF encourages the Philippines to continue its work in ensuring that its CFT measures are appropriately applied,” FATF said.
Countries on the FATF’s grey list, officially known as Jurisdictions Under Increased Monitoring, are subject to special monitoring until they have rectified the identified flaws in their financial system, which the Philippine Anti-Money-Laundering Council agreed to do after the Philippines was added to the grey list in 2021. At its October 2024 plenary, the FATF determined that the Philippines had “substantially completed its action plan” and needed only an on-site visit to verify that the implementation of the reforms had begun in earnest.
In a statement the following day, the Philippines’ Anti-Money Laundering Council welcomed FATF’s move and said the country’s exit from the grey list would reduce requirements for international money transfers, and would make it easier for overseas Filipino workers to send money home.
“The Philippines’ exit from the FATF greylist is expected to facilitate faster and lower-cost cross-border transactions, reduce compliance barriers, and enhance financial transparency,” it said in the statement. It said that the move by the FATF would be “a significant step in strengthening the Philippines’ financial system and maintaining global confidence.”
The Philippines was the only nation removed from the “grey list,” while two nations – Laos and Nepal – were added. Although Laos has “made progress” in some areas, FATF said, it continued to fall short in efforts to conduct “risk-based supervision” of casinos, banks, and entities based inside special economic zones; to enhance “the quality and quantity of financial intelligence analysis”; and to demonstrate “an increase in (money laundering) investigations and prosecutions in line with Lao PDR’s risk profile, with an emphasis on crimes with a transnational element that require international cooperation.”
FATF said that Nepal needed to improve its scrutiny of “commercial banks, higher risk cooperatives, casinos, DPMS and real estate sector.” It also needed to bolster its ability to conduct money laundering investigations, and to demonstrate “measures to identify, trace, restrain, seize and, where applicable, confiscate proceeds and instrumentalities of crime.”
The other Southeast Asian nation on the “grey list” is Vietnam, which was added in June 2023 due to concerns regarding potential deficiencies in its AML/CTF regimes. The FATF also maintains a blacklist, officially referred to as a “call for action,” which currently only contains just three nations: North Korea, Iran, and Myanmar. Myanmar was added to the list in October 2022, 18 months after the country’s military seized power in a coup.