IMF Urges Philippines to Enhance AML Measures to be Removed from Gray List

The International Monetary Fund (IMF) stated that the Philippines government should adopt an enhanced AML compliance system to combat money laundering and remove it from the Financial Action Task Force’s (FATF) gray list. 

The IMF’s end-of-mission to the Philippines forces regulatory departments and financial institutes to strengthen their AML systems and controls to be removed from the global money laundering gray list. The Philippines was added to the list under the jurisdiction monitoring in June 2021, FATF accused them of inadequate CTF and AML controls on the casinos, monitoring and risk assessment process in financial institutes. These comments from the IMF came after the Philippines demanded an additional 12 months from the FATF in January to convince the global AML watchdog that it should emerge from the gray list. 

The IMF’s mission leader, Mr S. Jayanath Peiris, stated to highlight the importance of removing from graylist, “would benefit from the publication of a credible timeline to address outstanding Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) issues. Strengthening systemic risk monitoring and financial supervision, expanding the macroprudential toolkit, as well as calibrating it to counter vulnerabilities stemming from sectoral exposures and linkages between financial conglomerates and non-financial corporations. The global refocusing on bank resolution frameworks is an opportune time to strengthen the current regime.” 

According to FATF, the Philippines should show more strict regulations and disclose more jurisdictions against financial criminals. They also should use robust technology to be more diligent in concluding business and identity verification in the various financial institutes. After FATF added the Philippines to the gray list, their economy decreased from 7.6% growth in 2022 to 4.3% in Q2’23, according to the IMF, primarily because of a poor worldwide economy and tighter regulatory frameworks. However, this growth will increase at the end of 2023 to 5.3% and reach 6% by 2024 if the Philippines improves its external export demand and prevents its economic system from financial crimes. 

Suggested Reads: 

PHILIPPINES AMLC RELEASES NEW STUDY FOR SUSPICIOUS TRANSACTIONS LINKED TO CASINO JUNKETS
PHILIPPINES TO EXIT FATF GREY LIST NEXT YEAR, SAYS GOVERNOR BSP
PHILIPPINES DIRECTS EFFORTS & DEMONSTRATES PROGRESS IN RESOLVING AML CONCERNS