Philippines Faces Renewed FATF Scrutiny as Central Bank Warns of Grey List Risk

The governor of the Philippines’ central bank has warned that the country faces a real possibility of being placed back on the Financial Action Task Force’s grey list as it approaches its next international evaluation. Speaking on Monday in comments reported by the Philippine News Agency, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. stressed the importance of sustained compliance, telling reporters, “we have to do what we need to do to show FATF that we’re doing everything we can”.

The Philippines was removed from the FATF grey list in February 2025, almost four years after it was initially placed under increased monitoring. At the time of its listing, the FATF identified multiple shortcomings in the country’s anti-money laundering and counter-terrorism financing framework, including risks linked to casino junket operations and weak supervision of designated non-financial businesses and professions. While the delisting marked a significant milestone, it did not represent a clean break from international oversight.

Even after the upgrade, the FATF required the Philippines to continue cooperating with the Asia/Pacific Group on Money Laundering to ensure that reforms were maintained. Authorities were specifically asked to “sustain its improvements in its AML/CFT system”, signaling that progress would be closely watched in the years following removal from the list.

Governor Remolona acknowledged that avoiding a return to the grey list would not be straightforward, cautioning that “is going to be a long process” as the country prepares for its next FATF assessment, which is scheduled for 2027. He noted that evaluations focus not only on laws and regulations, but also on how effectively authorities respond to major financial crime risks as they emerge.

One such risk factor could be the government’s handling of a large corruption scandal tied to flood control projects that surfaced last year. The scale and complexity of the alleged misconduct may weigh heavily in the next FATF review, depending on how enforcement agencies pursue investigations and prosecutions. Remolona pointed out that the Anti-Money Laundering Council, which he chairs, has already obtained freeze orders covering more than 4,600 bank accounts connected to individuals and entities suspected of involvement. However, he cautioned that investigations are ongoing, and additional disclosures could undermine the country’s efforts to remain off the FATF’s monitoring list.

In contrast, the gaming sector appears less likely to be a central concern in the upcoming evaluation. Following the government’s successful crackdown on Philippine Offshore Gaming Operators and tighter regulatory oversight, the Philippine Gaming and Amusement Corporation is no longer expected to be a primary focus of FATF scrutiny, although it may still be subject to review. PAGCOR’s chairman, Alejandro H. Tengco, was awarded a plaque of recognition in May last year in acknowledgment of the agency’s work in addressing FATF-related AML and counter-terrorism financing issues.

At the time of the recognition, Tengco reaffirmed the regulator’s commitment to compliance, stating, “As the country’s gaming regulator, we will continue to ensure that our licensees adhere to all anti-money laundering rules and regulations.” As the Philippines looks ahead to 2027, officials are emphasizing that maintaining international confidence will depend on consistent enforcement, transparency, and the ability to respond decisively to emerging financial crime risks.

By fLEXI tEAM