Philippines Exits Global Watchdog’s Dirty Money ‘Gray List’

The Philippines has been taken off a global watchdog’s dirty-money list, a move that could spur remittances and foreign investments in one of Asia’s fastest-growing economies.

The Paris-based Financial Action Task Force said on Friday that the Southeast Asian country is no longer on the list of nations under increased monitoring after a government push to step up efforts to counter money laundering and terrorist financing.

Bloomberg News reported earlier this month that the FATF was poised to make the move.

The removal from the so-called gray list should make it easier and cheaper for Filipinos working overseas to send money home — a key driver of domestic consumption — and may boost investments in a country where monthly inflows dropped 20% from a year ago in November.

The Philippines was the only country removed from the list, and the potential boost comes at a time of global uncertainty arising from US policies under President Donald Trump and Manila’s mounting tensions with Beijing in the South China Sea. Separately, Laos and Nepal were added to the FATF’s gray list.

A study by the International Monetary Fund found that gray-listings result in a “large and statistically significant reduction in capital inflows.”

Read: What’s FATF, The Global Body Targeting Dirty Money?: QuickTake

The Philippines landed on the gray list in June 2021 after the FATF cited shortcomings in the nation’s efforts to fight illicit financial flows. The rise of offshore gaming operators across the country drew particular scrutiny.

The Philippines’ Anti-Money Laundering Council said that since its inclusion in the gray list the country has implemented key regulatory and operational reforms to mitigate dirty-money risks.

“These reforms have led to a marked improvement in the development and application of financial intelligence, enhanced financial investigative capabilities among law enforcement agencies, and a significant increase in money laundering investigations and prosecutions,” the council said in an emailed response to a query ahead of the FATF decision.