‘Philippines at risk of returning to dirty money list’

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February 4, 2026 | 12:00am

DUMAGUETE CITY, Philippines — The Philippines faces a real risk of being placed back on the Financial Action Task Force (FATF) gray list, although authorities are taking steps to prevent a reversal of the country’s recent gains in anti-money laundering and counter-terrorism financing (AML/CTF) reforms.

During a media information session held here, Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. acknowledged that vulnerabilities remain, particularly given the country’s historical exposure to money laundering risks, even after its removal from the FATF gray list in 2025.

“To be honest, we have a risk. We have a risk that we will return to the gray list, although we are doing what we can to prevent that,” Remolona said in response to questions on whether recent governance issues could raise red flags for global watchdogs.

The BSP chief stressed that safeguarding the country’s standing with the FATF would require sustained effort over several years, not just short-term fixes.

“Preventing re-inclusion is going to be a long process,” he said, noting that the next formal round of FATF evaluation for the Philippines is expected around 2027.

He added that regulators and enforcement agencies must consistently demonstrate that reforms are being implemented on the ground, not merely written into policy.

“We have to do what we need to do to show FATF that we’re doing everything we can,” Remolona said.

He was also asked whether the ongoing probe into the flood control corruption scandal could affect the country’s risk profile.

While he did not directly link the investigation to FATF assessments, he underscored that governance, enforcement and the credibility of institutions are closely watched by international bodies.

The Philippines was removed from the FATF gray list in February 2025 after addressing strategic deficiencies in its anti-money laundering and counter-terrorism financing framework, including stronger supervision, improved enforcement and better coordination among agencies.

Philippine Institute for Development Studies senior research fellow John Paolo Rivera said the controversy raises red flags over possible corruption-related money flows, the strength of enforcement and the overall credibility of the country’s AML/CTF regime.

These are the areas that the FATF continues to monitor closely even after a country exits the gray list.

“While the scandal alone does not automatically trigger re-listing, it can affect perceptions of whether reforms are being sustained and whether high-level cases are being effectively investigated and prosecuted,” Rivera said.

He said the 2027 evaluation window gives the government some time, but only if it delivers credible and measurable enforcement outcomes rather than relying solely on new rules and policy announcements.

Avoiding a return to the gray list, Rivera said, would require stronger prosecution of major money laundering and corruption-linked cases, tighter monitoring of politically exposed persons and better coordination among government agencies.

He added that further reforms may also be needed, including easing bank secrecy for lawful investigations, improving beneficial ownership transparency and strengthening the supervisory powers of regulators.

“Ultimately, FATF will look for consistent implementation and results that restore confidence in the integrity of the financial system,” he said.