FATF status

The Philippines are no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 February 2025

The FATF welcomes the Philippines’ significant progress in improving its AML/CFT regime. The Philippines strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in June 2021 by (1) demonstrating that effective risk-based supervision of DNFBPs is occurring; (2) demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets; (3) implementing the new registration requirements for MVTS and applying sanctions to unregistered and illegal remittance operators; (4) enhancing and streamlining LEA access to BO information and taking steps to ensure that BO information is accurate and up-to-date; (5) demonstrating an increase in the use of financial intelligence and an increase in ML investigations and prosecutions in line with risk; (6) demonstrating an increase in the identification, investigation and prosecution of TF cases; (7) demonstrating that appropriate measures are taken with respect to the NPO sector (including unregistered NPOs) without disrupting legitimate NPO activity; (8) enhancing the effectiveness of the targeted financial sanctions framework for both TF and PF; and (9) applying cross-border measures in all main international sea/airports, in line with the risk.

The Philippines should continue to work with APG to sustain its improvements in its AML/CFT system. The FATF encourages the Philippines to continue its work in ensuring that its CFT measures are appropriately applied, particularly the identification and prosecution of TF cases, and are neither discouraging nor disrupting legitimate NPO activity.

Compliance with FATF Recommendations

The last follow up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in the Philippines was undertaken in 2022. According to that Evaluation, the Philippines was deemed Compliant for 8 and Largely Compliant for 29 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 1 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Corruption remains a significant issue in the Philippines, with the country ranking 117th in Transparency International's 2021 Corruption Perceptions Index, its lowest score in nine years. The Philippine government has implemented various strategies to combat corruption, including the establishment of the Presidential Complaint Center and the enforcement of anti-corruption laws, but challenges persist due to limited convictions and a complex legal framework. High levels of corruption hinder business operations, with extensive bribery and favoritism affecting public administration and the judicial system.

The Philippines is focused on enhancing its investment climate and recovering from the impacts of the COVID-19 pandemic, maintaining investment-grade sovereign credit ratings despite rising public debt and inflation concerns. Foreign direct investment (FDI) inflows surged to USD 10.5 billion in 2021, marking a significant rebound, although the country still lags behind regional peers in attracting FDI. Key sectors attracting investment include manufacturing, energy, financial services, and real estate, while challenges such as poor infrastructure, high costs, and regulatory inconsistencies continue to hinder further growth.

The investment climate in the Philippines is characterized by a commitment to improving foreign direct investment (FDI), which saw a significant rebound to USD 10.5 billion in 2021, despite the country lagging behind regional peers in attracting investment since 2010. Challenges such as poor infrastructure, high costs, regulatory inconsistencies, and corruption remain significant disincentives, although recent legislative amendments have opened up sectors to greater foreign ownership and aimed to streamline investment processes. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act has also reduced corporate tax rates, potentially making the Philippines more attractive to foreign investors.