Philippines Exits FATF Grey List, Leading to Potentially Lower Remittance Costs
The removal from the grey list boosts the country's global financial standing, making transactions easier while attracting greater investment and improving economic prospects.
The FATF placed the Philippines on its grey list in 2021. This subjected the country to increased scrutiny in global financial transactions, leading to higher costs and barriers for businesses, investors, and financial institutions.
To address these challenges, the government, under the leadership of President Ferdinand R. Marcos Jr., implemented a whole-nation approach to resolve the FATF’s concerns.
Emilio B. Aquino
SEC Chairperson Emilio B. Aquino highlighted the significance of this development, stating, “Exiting the FATF grey list required a national, coordinated effort made possible by the Marcos administration, which wasted no time to unite concerned government agencies to work towards the common goal of fortifying the country’s anti-money laundering and terrorism financing controls.”
The reforms included stricter regulations on beneficial ownership transparency, financial institutions, non-profit organisations, and casino junkets. The SEC introduced higher penalties for non-compliance and intensified enforcement measures to ensure corporations adhered to transparency requirements.
What This Means for the Philippines
Since implementing these changes, compliance rates for beneficial ownership disclosure have significantly improved from 26% in 2021 to 69%.
The SEC successfully encouraged over 7,600 non-profit organisations (NPOs) to register. This registration enhances transparency while ensuring that legitimate NPO activities are not disrupted.
With the Philippines now off the grey list, the country stands to benefit from a more favourable business climate, attracting both local and foreign investors.
The removal from the grey list reduces transaction costs associated with international banking, trade, and remittances. International banking, trade, and remittances previously experienced these higher costs due to heightened scrutiny.
Additionally, experts expect the country’s improved standing to positively impact credit ratings, ensuring better financing opportunities for businesses and government projects.
Fintech Alliance Philippines Applauds FATF Grey List Removal
The Fintech Alliance Philippines hailed the country’s removal from the grey list as a game-changer for the digital finance sector.
Lito Villanueva
Lito Villanueva, Founding Chairman of Fintech Alliance PH and executive Vice President and Chief Innovation and Inclusion Officer of RCBC, emphasised the importance of this milestone, stating, “This marks a turning point for the Philippine financial sector. Being off the grey list enhances trust in our financial system, benefiting fintech companies, businesses, and consumers alike.”
He further commended the relentless efforts of BSP Governor Eli Remolona, SEC Chairman Emilio Aquino, and Executive Secretary Lucas Bersamin in ensuring the country met global AML and CTF standards.
Moving forward, the Philippines remains committed to sustaining these reforms. It will also strengthen financial safeguards to prevent the recurrence of financial crimes.
The SEC, along with other regulatory bodies, aims to maintain a stable, transparent, and competitive financial environment on the global stage.
Aquino reaffirmed this commitment, stating, “With our exit from the FATF grey list, we are optimistic that the international community will see the Philippines as an even more attractive destination for business and investment.”
He confirms that the SEC is committed to continuously upholding its adherence to global standards of the AML/CFT framework. This is also in line with their vision of a business sector considered among the best in Southeast Asia.
