FATF ‘gray list’ exit seen to boost banks
Banks and other financial institutions will likely benefit the most from the country’s exit from the Financial Action Task Force’s (FATF) “gray list” as more investments are anticipated to flow into the Philippines, according to the Securities and Exchange Commission (SEC).
SEC Chair Emilio Aquino tells reporters that the Philippines’ removal from the list could result in “billions in foreign direct investments.”
“There may be venture capitalists who are interested, private equity firms. They will bring in their money so long as it will not be a high-risk investment destination,” Aquino says in a press conference.
“With the removal [from the FATF gray list], it will make our country attractive … and with their technology, their investments coming in, it will also help us cope with all the changes happening in the business environment,” Aquino adds.
Apart from banks, business process outsourcing firms are also likely to flock to the country, as these companies usually prioritize locations with a “well-regulated business environment,” Aquino notes.
Better framework
This comes after the FATF, the global money laundering and terrorist financing watchdog, officially removed the Philippines from its list of jurisdictions that are under increased monitoring.
The country was included in the list in 2021 due to “deficiencies” in its antimoney laundering and terrorist financing framework.
To keep the Philippines out of the list, Aquino says they may conduct sectoral risk assessments “as they come.”
“The next two years will be crucial, as the Philippines prepares for another mutual evaluation, where the country’s AML/CFT (antimoney laundering and counterfinancing of terrorism) standards will be assessed for their compliance with global standards,” says Aquino, who is also a member of the Anti-Money Laundering Council.
Aquino says the SEC, for its part, will continue to coordinate with other government agencies and authorities to enhance the country’s framework.
So far, the SEC has partnered with at least 21 government agencies for data sharing, particularly on beneficial ownership information. These refer to people or entities that own or control a company, although their names are often not stated in official documents. They are also usually the ones who get the most gains from a corporation’s finances.
