The International Monetary Fund has urged the Philippines to enhance efforts to be removed from the Financial Action Task Force’s anti-money laundering grey list.
In comments contained within a preliminary statement from the IMF’s end-of-mission to the Philippines, mission leader Mr S. Jayanath Peiris also explained that removal from the grey list “would benefit from the publication of a credible timeline to address outstanding Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) issues.”
In particular, Peiris pointed to the Philippines banking sector as hosting “pockets of vulnerability”, underscoring the importance of “strengthening systemic risk monitoring and financial supervision, expanding the macroprudential toolkit, as well as calibrating it to counter vulnerabilities stemming from sectoral exposures and linkages between financial conglomerates and non-financial corporates.
“The global refocusing on bank resolution frameworks is an opportune time to strengthen the current regime,” he said.
The IMF’s comments come after the Philippines was in January granted an additional 12 months by the Financial Action Task Force (FATF) to convince the global AML watchdog that it should be removed from a “grey list” of nations under increased monitoring for deficiencies in AML and CTF (counter-terrorist financing) controls.
The country was added to a list of jurisdictions under increased monitoring in June 2021, with the FATF stating it wanted continued strengthening of AML/CTF controls around casino junkets and better sharing of information around various financial institutions.
According to the FATF, the Philippines needs to show a higher number of prosecutions and convictions by being more diligent in applying a system to record such instances.
Meanwhile, the IMF noted that the Philippines economy has slowed from 7.6% growth in 2022 to 4.3% in 2Q23 – largely due to a weak global economy and tightened policy settings. However, growth is projected to bounce back by year-end to 5.3% in 2023 and reach 6.0% in 2024, supported by an acceleration in public spending and improved external demand for Philippines exports.
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