The Philippines risks sliding back onto the Financial Action Task Force’s (FATF) gray list if authorities fail to rein in the explosive growth of online gambling fueled by digital payment apps, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said.
The central bank has suspended gambling links in mobile payment apps and websites, citing both consumer protection and the need to block illicit flows of money.
“If the problem persists, we could face another review from the FATF,” Remolona warned on the sidelines of the Manila Tech Summit 2025 on Tuesday.
The Financial Action Task Force (FATF) is a Paris-based inter-governmental body that sets international standards against money laundering and terrorist financing. Gray-list status subjects a country to increased global monitoring and undermines investor confidence.
The Philippines only clawed its way off the gray list in February, after nearly four years of reforms to plug gaps in anti-money laundering and counterterrorism financing.
Enforcement underway
The BSP ordered e-wallets or mobile payment apps and banks on August 14 to sever gambling links within 48 hours. Some failed to comply, prompting cease-and-desist orders.
The suspension stands, Remolona said, until “sufficient guardrails” are in place. Sanctions range from reprimands to fines of up to P1 million per violation.
President Ferdinand Marcos Jr., who keynoted the Manila Tech Summit 2025 on Tuesday, framed the crackdown in moral as well as financial terms.
Online gambling, he said, “preys on people’s vulnerabilities.”
Yet a new study suggests the clampdown is pushing players into darker corners of the internet. Research by Filipino sociocultural firm The Fourth Wall found a 70 percent drop in users of regulated gambling platforms and a 40 percent surge in unregulated sites within days of the ban.
“Payment channels themselves shape perceptions of safety and legitimacy,” John Brylle Bae, research director, said. “When e-wallets were delinked from regulated platforms, players didn’t stop—they simply shifted to unregulated sites.”
That migration is especially viewed as troubling because unregulated sites often skip basic safeguards: no age checks, unverifiable games, aggressive affiliate marketing and scant customer service.
These gaps leave users vulnerable to scams, fraud and financial ruin.
Human cost
The numbers echo the lived reality of Reagan Praferosa, who once lost P50 million to gambling addiction before jail time and suicide attempts eventually led him into recovery. Today, he runs a small support group helping Filipinos as young as 13 escape online gambling’s grip.
“It only leads to three places: jail, institution or death,” Praferosa said.
Lawmakers and church leaders have long warned of the social costs, which have only deepened with the rise of e-wallets and the aggressive marketing of online games.
Financial fallout
Gray-listing carries more than symbolic shame. When the Philippines was flagged in 2021, banks tightened compliance, foreign investors demanded higher risk premiums and remittances from millions of overseas workers faced extra scrutiny.
“The gray list is not just a reputational hit — it makes every dollar more expensive,” a former central bank official said.
Already, fintech shares and payment operators are under pressure as investors reassess revenue models heavily dependent on gambling.
Analysts warn that if the FATF raises concerns, credit ratings agencies could follow, compounding the drag on capital markets. The perception that regulators are scrambling to contain a surge, rather than steering it, is enough to rattle confidence.
Policy crossroads
The Senate has scheduled fresh hearings on the industry, with lawmakers split between calls for an outright ban and proposals for tighter licensing.
Church leaders have urged prohibition, while industry groups argue for regulation that channels activity into legal frameworks rather than forcing it underground.
Global scrutiny
For the FATF, the Philippines is a test case of whether emerging economies can regulate the fast-mutating world of online gambling, where mobile payments blur the lines between entertainment and illicit finance.
A relapse would not only stain Manila’s record but also reinforce the perception that Asia is the weak link in global anti-money laundering enforcement.
