Key government officials, led by Finance Secretary Ralph Recto and leading bank analysts, hailed the Philippines’ exit from the Financial Action Task Force’s ‘gray list’ as a seal of good economic housekeeping.
They said the Paris-based FATF’s move may lead to a credit rating upgrade for the Philippines, which will attract more foreign direct investments while facilitating faster cross-border transactions.
The FATF Plenary on Saturday, February 22, issued a statement congratulating the Philippines for the “positive progress in addressing the strategic anti-money laundering and countering the financing of terrorism” four years after it placed the country in the gray list in 2021.
“The Philippines is no longer subject to increased monitoring by the FATF,” the statement reads, noting that the 18 required actions have been addressed.
The Finance chief in a statement said the FATF decision will directly benefit the remitting overseas Filipino workers, businesses, and the Filipino people.
“With this momentum, our next goal is clear—a credit rating upgrade within the Marcos Jr. administration,” Recto said.
“This is a landmark achievement of the Marcos Jr. administration. It’s a seal of good housekeeping that strengthens public confidence in our financial system,” Recto said.
Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr., chairman of the Anti-Money Laundering Council, said “the achievement complements our ongoing efforts to make the financial system a stronger driver of sustainable growth.”
Remolona said it will support business, strengthen the country’s position as an attractive destination for foreign direct investment (FDI), and benefit Filipinos, particularly overseas Filipino workers (OFWs).
Special Assistant to the President for Investment and Economic Affairs Frederick D. Go said, “Our successful exit from the FATF’s gray list shows the government’s commitment to financial integrity and compliance with global standards.”
It also “boosts confidence in the country’s financial system, which can lead to more foreign investments and ultimately result in more and better job opportunities for Filipinos,” Go said.
Executive Secretary Lucas P. Bersamin, chairman of the National Anti-Money Laundering/Counter-Terrorism Financing/Counter-Proliferation Financing (AML/CTF/CPF) Coordinating Committee (NACC), praised the FATF’s decision. “This recognition affirms that the Philippines’ AML/CTF/CPF framework aligns with global standards. It supports our vision to enhance economic competitiveness for the benefit of our people,” Bersamin said.
The private sector is equally elated by the country’s exit from the financial gray list.
Jonathan Ravelas, BDO’s chief strategist, in a Viber message sent yesterday, viewed this as “quite significant as it signals improved financial compliance and reduced regulatory risks, which can encourage foreign banks to re-enter the market.”
Ravelas wanted more solid actions from the government. “Will it be enough? While these measures can provide a boost, they may not be a complete solution. The economy still faces challenges like global uncertainties and inflation,” Ravelas said.
The BDO analyst asked: “How could it perk up the economy? Lower borrowing cost and increased liquidity. A 50-bps interest rate cut would reduce the cost of borrowing for businesses and consumers, encouraging spending and investment. Reducing the banks’ reserve requirement ratio by 200 bps would free up more funds for banks to lend, further stimulating economic activity,” Ravelas noted
Michael Ricafort, RCBC chief economist, said in an email the widely expected Philippines’ exit from the FATF gray list and the latest BSP cut in banks’ reserve requirement ratio (RRR) “would support market sentiment and could increase investor confidence on the country.”
“(This is) a welcome development and among the positive leads that the markets badly needed recently, given the Trump factor that weighed on the markets in recent weeks,” Ricafort said.
He said OFWs would benefit in terms of reduced processing time and lower transaction costs, “a more desirable scenario if funds of the country with the rest of the world move with greater ease.”
