Investment bank Moody’s has highlighted that, while the Philippines’ removal from the Financial Action Task Force (FATF) grey list marks a significant step forward in combating financial crime, ongoing vigilance is needed in sectors beyond traditional finance—such as online gaming and cryptocurrency.
These industries, according to Moody’s, still pose potential risks that could undermine the country’s efforts to address money laundering and terrorism financing.
Choon Hong Chua, Head of Financial Crime Practice Group for Asia-Pacific and the Middle East at Moody’s, emphasized that the Philippines’ exit from the FATF grey list signifies substantial progress in strengthening its anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks.
“The Philippines has enhanced inter-agency coordination and implemented comprehensive reforms,” Chua said. “However, money laundering risks are not easy to sweep out entirely. Businesses such as online gaming and cryptocurrency would be areas beyond the financial sector that would require continuous oversight to mitigate potential risks.”
The Philippines’ removal from the grey list was a major milestone, ending more than three years of scrutiny by the FATF. This decision followed the country’s successful efforts to address all 18 deficiencies in its AML/CTF systems, which had placed it on the grey list in June 2021.
The FATF’s move not only strengthens investor confidence but also bolsters financial stability in the Philippines, a country with a growing economy and a prominent role in Southeast Asia’s financial landscape.
However, the FATF has also called on the Philippines to continue improving its AML/CTF systems, particularly in the identification and prosecution of terrorism financing cases. The organization stressed that while the Philippines has made significant strides, it must maintain its efforts to ensure that the country’s counter-terrorism financing (CTF) measures are robust and do not inadvertently disrupt legitimate non-profit organizations (NPOs).
In addition to financial institutions, the FATF emphasized that sectors like online gaming and cryptocurrency, which are not as tightly regulated, present new challenges for anti-money laundering efforts. These industries are increasingly becoming channels for illicit financial activities, including money laundering, due to the ease of cross-border transactions and the anonymity they offer.
Amongst the country’s ongoing efforts to clean up the online gaming sector, following the complete ban on Philippine Offshore Gaming Operators (POGOs), a Senator has also submitted a resolution aimed at reassessing the “use of cryptocurrencies in the country”.
Sherwin Gatchalian highlighted the same risks outlined by Moody’s, urging for stricter regulation of crypto due to its frequent use in scams and cross-border money laundering.
