Philippines Secures FATF Grey List Exit After Sweeping AML Reforms

In a landmark moment for the Philippines, the Financial Action Task Force (FATF) announced in February 2025 that it had officially removed the country from its grey list, a designation reserved for jurisdictions subject to enhanced monitoring due to weaknesses in anti-money laundering (AML) and counter-terrorist financing (CFT) systems. The decision marks the culmination of nearly four years of sustained reforms, institutional coordination, and strong political backing aimed at strengthening the country’s financial defences.

The FATF first placed the Philippines on its grey list in June 2021, flagging concerns related to vulnerabilities in casino-related transactions and an inadequate track record of prosecuting terrorism financing. In response, the Philippine government committed to a comprehensive action plan targeting nine key areas. These included risk-based supervision, transparency around beneficial ownership, and the effective prosecution of illicit financial activities.

Since then, both public and private sector stakeholders have pushed through sweeping reforms. Financial institutions implemented enhanced customer due diligence protocols, while the Anti-Money Laundering Council (AMLC) deepened its financial intelligence operations. Law enforcement bodies stepped up investigations and prosecutions, particularly focusing on unregistered remittance operators and casino-linked money laundering schemes. Legislators also enacted changes to tighten controls on Money Value Transfer Services (MVTS) and introduced tougher penalties for noncompliance.

The FATF, on February 21, 2025, confirmed that the Philippines had fulfilled all action plan requirements. The announcement was welcomed by national leaders as evidence of the government’s resolve to overhaul its financial system. Authorities praised the achievement as the product of a broad coalition of agencies working in concert to safeguard the nation’s financial integrity.

Central to this effort was a renewed emphasis on risk-based supervision, especially for designated nonfinancial businesses and professions. The AMLC led the charge by expanding its supervisory workforce and leveraging data analytics tools to identify suspicious transaction patterns. Collaboration with the Bangko Sentral ng Pilipinas (BSP) ensured that banks and remittance firms implemented consistent due diligence standards, minimizing regulatory arbitrage and bringing domestic practices in line with global benchmarks.

The regulatory net was also extended to virtual asset service providers. Authorities introduced structured registration procedures and implemented reporting thresholds designed to prevent the misuse of cryptocurrencies and other digital assets in cross-border money laundering. To enhance transparency, the government improved access to beneficial ownership data, enabling more effective vetting of corporate clients and helping to protect the system from shell company abuse.

Sanctions enforcement gained momentum as well. On-site inspections were more frequent and more rigorous, and noncompliant entities faced license suspensions and heavy fines. These reforms addressed the FATF’s earlier concerns while simultaneously boosting investor confidence in the Philippine financial system.

Recognition of the institutions and individuals behind this progress came on May 5, 2025, when President Ferdinand R. Marcos Jr. led a ceremony at Malacañan Palace to honour 42 institutions and 232 people. Among the key agencies were the AMLC, whose Executive Director Matthew David helped implement intelligence-sharing protocols, and the BSP, under Governor Eli Remolona, which enhanced risk assessment systems. The Department of Justice (DOJ) also played a crucial role by revising prosecution guidelines to ensure faster resolution of money laundering and terrorism financing cases.

Prominent figures recognised included Executive Secretary Lucas P. Bersamin, who chairs the National Anti–Money Laundering/Counter-Terrorism Financing/Counter-Proliferation Financing Coordinating Committee, as well as Justice Secretary Jesus Crispin Remulla and Interior Secretary Jonvic Remulla. Their leadership supported cross-agency task forces that helped coordinate reforms and allocate resources efficiently.

The impact of this delisting is expected to ripple across the economy, particularly benefiting overseas Filipino workers (OFWs). With reduced international scrutiny, remittance costs are projected to drop, making it more affordable for OFWs to send money home. The Philippine News Agency has reported that advisories and billboards will soon highlight these changes, promising faster and cheaper services for the country’s vast diaspora.

The financial markets are also poised to benefit. With the grey-list stigma removed, foreign investors are likely to experience fewer compliance-related hurdles in cross-border dealings. Analysts predict improved access to international credit and more favourable borrowing terms for both private firms and the government. Credit-rating agencies have already flagged the delisting as a positive development, hinting at better sovereign risk outlooks and an uptick in capital inflows.

On the global stage, the Philippines now projects a stronger image in the fight against illicit finance. The country’s upgraded AML/CFT systems demonstrate its commitment to international standards, enhancing its credibility as a dependable partner in Southeast Asia.

Still, officials caution that the work is not finished. President Marcos has emphasized the need to maintain reform momentum. “Never let the Philippines fall back into increased monitoring,” he urged, calling on agencies to remain vigilant against emerging risks like proliferation financing. The administration continues to advocate for risk-based supervision, technological upgrades in transaction monitoring, and enhanced training for compliance officers.

By cultivating a culture of compliance and collaboration, the Philippines aims not only to protect its financial system but also to support long-term, inclusive economic development. The exit from the FATF grey list stands as a powerful milestone—one that highlights the nation’s capacity for reform and its commitment to global financial integrity.

By fLEXI tEAM