The recent decision by the Financial Action Task Force (FATF) to remove the Philippines from its global “gray list” marks a significant milestone in the country’s ongoing efforts to combat money laundering and terrorism financing. This victory is not just a symbolic win; it has real, tangible benefits for millions of Filipinos, especially overseas Filipino workers (OFWs), and the broader economy.
Among the big winners of this delisting are the millions of OFWs who are expected to pay lower remittance fees. For years, these hardworking individuals have shouldered the burden of higher transaction costs, a consequence of the heightened scrutiny and compliance measures necessitated by the gray list status. With the removal of the Philippines from this list, OFWs can look forward to more affordable and efficient remittance services, providing much-needed financial relief to their families back home.
Malacañang has rightly hailed this achievement as a “well-earned, hard-fought” win. The country’s exit from the gray list is a testament to the relentless efforts of various stakeholders to strengthen the anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks. After being labeled as a reputed “dirty money haven,” the Philippines can now present itself as an attractive destination for job-creating, growth-inducing foreign investments.
The global watchdog’s decision to delist the Philippines came after more than three years of dedicated efforts to address all 18 deficiencies identified in the country’s AML/CTF measures. This journey was not without its challenges. The specter of being blacklisted, akin to the likes of North Korea and Iran, loomed large, threatening to disrupt cross-border transactions and increase remittance costs. However, the Philippines persevered, proving its commitment to uphold international financial standards.
The impact of this delisting extends beyond the financial sector. It boosts investor confidence in the local financial system, paving the way for increased foreign direct investments. The Anti-Money Laundering Council (AMLC) anticipates that this development will attract more job-generating foreign capital, further stimulating the economy.
Fintech companies, such as GCash and Maya, stand to benefit significantly from this development. The reduced compliance barriers and enhanced financial transparency will encourage foreign banks to resume their business relationships with Philippine financial entities. This renewed confidence in the local financial system will likely lead to faster and lower-cost cross-border transactions, benefiting businesses and consumers alike.
The delisting also addresses one of the major triggers for the Philippines’ return to the gray list—the 2016 cyberheist involving the Bangladesh central bank. The tighter regulation of casinos and the closure of Philippine offshore gaming operators (Pogos) have strengthened the country’s defense against illicit financial flows. These measures, alongside the continuous efforts of institutions like the Philippine Amusement and Gaming Corp. (Pagcor), demonstrate the country’s resolve to maintain robust AML/CTF systems.
Indeed, the Philippines’ removal from the FATF gray list is a monumental victory for the economy. It validates the government’s efforts to dismantle structures that could be exploited by money launderers and terrorism financiers. This achievement not only enhances the country’s financial standing but also underscores its commitment to uphold the highest standards of financial governance. As the Philippines moves forward, it must continue to sustain and build upon these gains to ensure long-term economic growth and stability.
