BSP to ensure nation will stay out of ‘gray list’

The Bangko Sentral ng Pilipinas (BSP) said it is working to ensure that the country will not return to the Financial Action Task Force’s (FATF) “gray list,” citing the need to crack down on digital technology threats.

“Just because we are off the gray list does not mean that we are done. We have to make sure we do not get back into the gray list,” BSP Governor Eli M. Remolona, Jr. said at a forum on Tuesday.

“In the past, we go in, we go out. This time, we are determined to stay out of the gray list,” he added.

The FATF last month removed the Philippines from its list of jurisdictions under increased monitoring for “dirty money” following a successful on-site visit and completion of the recommended action plan.

The country was on the FATF’s gray list for over three years or since June 2021.

The dirty money watchdog noted the Philippines’ progress in addressing the strategic anti-money laundering and countering the financing of terrorism and proliferation financing deficiencies.

The BSP chief said they are undergoing a national risk assessment after the country’s exit from the gray list.

“Part of that means looking at our risks again. We look at the whole economy to figure out what else can lead to risks of money laundering, what else can lead to terrorism financing and so on.”

The FATF’s next assessment of the country is slated for 2027. “We want to make sure that we pass that evaluation,” Mr. Remolona said.

The assessment will have the FATF verify that the measures are sustained and still in place.

In 2002, the FATF blacklisted the Philippines for having no legal anti-money laundering framework. It was removed from the blacklist a year later after the passage of the Anti-Money Laundering Act.

Mr. Remolona said they are closely monitoring innovations in technology amid the numerous threats in the digital space.

“Digital technology is evolving, and digital technology is the preferred means for money laundering actors to take money in,” he said.

“We have to look at digital technology and what it’s doing. These guys are very innovative as you know, right? It’s essentially an arms race between us and them so we have to keep up with the arms race. That’s why we’re doing risk assessment.”

Earlier data from Moody’s Investors Service showed that from 2018 to 2023, the Philippines was among the top five countries in Southeast Asia with money laundering activity events added over the five-year period.

The number of money laundering events added in the Philippines jumped by 45% from 2022 to 2023.

The Anti-Financial Account Scamming Act was signed into law last year. It aims to protect consumers from financial cybercrimes by penalizing violations.

Malacañang also last year issued an executive order mandating all government offices to adopt the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy 2023-2027.

“In the meantime, we can reap the benefits of our delisting from the FATF gray list. That delisting renews investor confidence,” Mr. Remolona said.

“It paves the way for the restoration of correspondent bank relationships. It helps our overseas Filipino workers (OFWs), but it is more than that. It helps to convince foreign investors to come in. Makes it easier for foreign banks to deal with our banks.”

The central bank earlier said exiting the gray list will help support OFWs by making remittances and cross-border payments faster and more affordable. — Luisa Maria Jacinta C. Jocson