In October 2024, the Paris-based financial watchdog, Financial Action Task Force (FATF), announced that the Philippines has completed its action plan to address 18 strategic deficiencies it assessed in the implementation of anti-money laundering and terrorist financing strategies.

This comes three years after the FATF designated the Philippines as a “jurisdiction under increased monitoring,” its moniker the “greylist,” in 2021. Being under the “greylist” signifies that a country has made a strong political commitment to promptly address the identified strategic deficiencies within agreed-upon timeframes and commits to be subject to closer oversight.

The FATF emphasizes that being placed on the greylist is not a punitive action. Instead, it merely serves as an opportunity for a country to assess its policies and implement measures that align with FATF standards for combating money laundering and terrorist financing.

However, reports suggest that the Philippines’ inclusion in the greylist has led to heightened scrutiny of transactions involving Filipino entities and individuals. This has resulted in increased costs and delays. Worse, in some cases, foreign entities opted to de-risk by avoiding transactions with Filipino individuals and businesses altogether.

This is not the first time the Philippines has worked towards removing designations from the FATF. In 2005, the country was successfully removed from the blacklist following the enactment of the Anti-Money Laundering Act, as amended.

These efforts strengthened the financial sector, boosted international investment, and secured foreign remittances. Removing the Philippines from the greylist would once again restore confidence in the country as a secure and reliable business destination. It would lead to increased foreign investments, reduced scrutiny on transactions, and more efficient processing times, ultimately lowering costs. These improvements would significantly enhance the ease of doing business in the Philippines.

This significant progress will also greatly benefit our kababayans abroad who send remittances to their families in the country. Their foreign remittances will no longer incur high fees stemming from administrative expenses and compliance costs associated with heightened due diligence by financial institutions. More importantly, the rejection rate for these remittances will significantly decline as regulatory barriers are reduced and confidence in Philippine regulators and financial institutions increases.

No less than President Ferdinand R. Marcos Jr. has emphasized the critical importance of removing the Philippines from the FATF grey list, making it a top priority. This commitment is reflected in the development of initiatives such as the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy 2023-2027, which adopts a unified “one nation approach.”

With all hands on deck, we now await the outcome of the FATF plenary session scheduled in the latter half of this month, the first of three sessions this year. It must be remembered that exiting the grey list is a testament to our progress so far, but it also paves the way for new challenges.

The country must continue to adopt and implement policies that align with international standards, ensuring sustained compliance. This ongoing effort will not only bolster foreign investments but also facilitate the smooth inflow of funds into the Philippines, driving economic growth in the long run.

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Rogelio V. Quevedo is currently a commissioner of the Securities and Exchange Commission and chairman of the Commercial Law Cluster of the UP College of Law Faculty. He was formerly the Government Corporate Counsel (OGCC). He retired as senior vice president of PLDT and SMART where he was concurrently head of the International & Domestic Carrier Business Division and head of Legal and Regulatory Affairs.