EDITORIAL - Stuck in the gray list

The country must have an emotional attachment to gambling. Despite all the criminal activities and other social ills associated with Philippine offshore gaming operator firms, the government not only refuses to ban POGOs, but is recycling them into the same dog with a different collar as internet gaming licensees.

And despite the negative impact on doing business in the country as well as on the remittances of overseas Filipino workers, the government remains unable to implement the needed reforms to mitigate money laundering risks through casino junkets.

This failure on casino junkets and two other action items kept the country for the third straight year on the gray list of the Financial Action Task Force. The Paris-based FATF announced last Friday, at the end of a plenary in Singapore, that the Philippines and 20 other jurisdictions were in the gray list of the dirty money watchdog for failure to adequately address the gaps in countering money laundering and terrorist and proliferation financing.

The Philippines was included in the gray list in June 2021, with the FATF citing 18 strategic deficiencies that needed to be addressed. After three years, the country has managed to address 15 of the 18 items. All deadlines to act on the deficiencies expired way back in January 2023, prompting the FATF to urge the country to move speedily. Increased monitoring by the FATF complicates financial transactions in the country, hindering business and the remittances of millions of OFWs.

The FATF cited the Philippines’ moves to increase money laundering investigations and prosecution in line with risk, enforce beneficial ownership transparency obligations, and improve law enforcement access to data on beneficial ownership. The dirty money watchdog also noted the country’s risk-based supervision of designated non-financial businesses and professions. But deficiencies remain in its anti-money laundering / combating the financing of terrorism controls, according to the FATF.

Turkey has been removed from the gray list. With the Philippines in the list are Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of Congo, Haiti, Kenya, Mali, Monaco, Mozambique, Namibia, Nigeria, Senegal, South Africa, South Sudan, Syria, Tanzania, Venezuela, Vietnam and Yemen. Surely the Philippines can do better in getting out of this dishonor list.