BSP braces for ‘arms race’ vs cybercriminals
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said the next big threat to the country’s defenses against dirty money could come from digital technology, adding that authorities were in the middle of an “arms race” with bad actors.
Speaking to members of the Tuesday Club, Remolona acknowledged that financial criminals are becoming more innovative by the day as they attempt to carry out large-scale crimes.
“That’s what we’re afraid of,” he said.
This means the country would have to keep up with the evolving threats by updating its anti-money laundering (AML) and counter-terrorism financing (CTF) systems so it could immediately detect illicit flow of funds, the BSP chief said.
“Digital technology is evolving and digital technology is the preferred means for money laundering actors to take money in. So, we have to look at digital technology and what it’s doing,” said Remolona, who also chairs the Anti-Money Laundering Council.
“These guys are very innovative as you know, right? And it’s essentially an arms race between us and them so we have to keep up with the arms race. That’s why we’re doing this national risk assessment,” he added.
At the end of its February meeting, Paris-based Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, removed the Philippines from its “gray list” of jurisdictions under increased monitoring—the only country to be excluded in the last round of assessment.
The decision wrapped up more than three years of the Philippines’ efforts to remedy all 18 deficiencies in its AML and CTF measures.
Those deficiencies dragged the Philippines back to the gray list in June 2021 and pushed it to the brink of being “blacklisted” as it had been in 2002—which would have resulted in failed cross-border transactions, delays and higher costs of remittances, a major lifeline for many Filipinos.
But the FATF said the Philippines would still have to show that it could sustain the implementation of its AML/CTF reforms in a way that was “consistent” with the FATF standard.
The next FATF evaluation of the Philippines is in 2027. Until that time comes, Remolona said the Philippines could reap the benefits of the delisting while helping its neighbors exit the global dirty money watch list.
“[The Philippines is seen as] a regional leader in tackling money laundering and terrorism financing, so they [FATF] asked us to provide evaluators for the other countries in Asia that are still on the gray list,” he added.
