Philippines Fortifies Anti-Money Laundering Defenses Amid Persistent Threats
Posted on 1/20/26
The Philippines has significantly strengthened its defenses against illicit financial flows, as revealed by the government's latest National Risk Assessment (NRA). While vulnerabilities persist and the overall threat from dirty money remains high, the nation has shown notable improvement in its anti-money laundering (AML) capabilities. The third NRA, covering 2021 to 2024, assigned the country a "medium-high" rating with a score of 0.67 out of one, marking a positive advancement from the previous assessment's score of 0.60.
This upward trend in combating financial crimes is largely attributed to a series of strategic enhancements. The report specifically cited the implementation of stronger anti-money laundering laws, a more proactive stance from the financial intelligence unit, and heightened supervisory measures across relevant sectors. Furthermore, increased frequency in asset freezing and forfeiture actions has played a crucial role in curbing the movement of illicit proceeds within the financial system.
These sustained improvements culminated in a significant international recognition for the Philippines: its removal from the global dirty money watch list. Last year, the Paris-based Financial Action Task Force (FATF), the world's leading intergovernmental organization against money laundering and terrorist financing, officially delisted the Philippines from its "gray list" – a category signifying jurisdictions under increased monitoring due to strategic deficiencies in their AML/CFT regimes.
The delisting marked the successful conclusion of over three years of dedicated effort by Philippine authorities to address all 18 deficiencies identified in their measures against illicit fund flows. These shortcomings had previously led to the Philippines' re-inclusion on the gray list in June 2021 and had even pushed the country close to being "blacklisted," a severe designation last faced in 2002. Matthew David, Executive Director of the Anti-Money Laundering Council (AMLC), affirmed that the latest risk assessment findings would be instrumental in guiding resource allocation moving forward.
David further emphasized that the insights gleaned from the assessment would inform the development of a comprehensive multi-year national strategy to combat dirty money, spanning from 2026 to 2030. "These insights will enable the AMLC to concentrate its financial analysis and investigative efforts on high threat crimes, while also strengthening its supervisory focus on industries and channels identified as highly vulnerable to criminal and terrorist activities," he stated, outlining a targeted approach to future AML initiatives.
Despite the progress and the overall "medium" assessment for vulnerability (0.51 score), the report underscored that the national level of money laundering threat continues to be "high." This persistent threat is primarily driven by various predicate crimes that generate substantial illicit proceeds. Identified offenses include widespread drug trafficking, various forms of fraud, significant environmental crimes, and persistent tax offenses, all of which continue to pose substantial challenges to the financial integrity of the nation.
In contrast to money laundering, risks associated with terrorism financing have shown signs of easing since the previous assessment cycle. This improvement is largely due to the weakening of domestic extremist groups, coupled with enhanced intelligence coordination and more robust oversight, particularly concerning non-profit organizations which can sometimes be exploited for illicit purposes. Nevertheless, the report issued a cautionary note, highlighting that specific risks related to terrorism financing still persist in certain areas of Mindanao and through particular remittance channels, necessitating ongoing vigilance.
