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Philippines Exits FATF Grey List and Unveils Plans to Strengthen AML Compliance

In February 2025, the Philippines achieved a monumental milestone by officially exiting the Financial Action Task Force (FATF) grey list, a key moment for the country’s financial integrity and international standing. The grey list, maintained by the FATF, identifies countries that are under increased scrutiny due to strategic deficiencies in their Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) frameworks. The Philippines had been placed on this list in June 2021 due to concerns over its regulatory measures, particularly with regard to money laundering and terrorist financing.

Now, nearly four years later, the Philippine government and regulatory authorities, led by the Securities and Exchange Commission (SEC), are intensifying their efforts to ensure that the country stays off the grey list for good. As part of this ongoing commitment, SEC Chairperson Emilio Aquino outlined the agency’s comprehensive plans to bolster the nation’s AML/CFT capabilities during a press conference held on February 27, 2025.

Aquino’s remarks included a detailed roadmap for the country’s continued efforts to comply with global standards on financial crime prevention. He stressed the importance of the next two years, which will see another mutual evaluation of the Philippines’ progress in its anti-money laundering policies.

“The next two years will be crucial, as the Philippines prepares for another mutual evaluation, where the country’s AML/CFT standards will be assessed for their compliance with global standards,” said Emilio Aquino, Chairperson of the SEC.

One of the key initiatives presented by the SEC to prevent the country’s return to the grey list is Project HARBOR, an ambitious plan to enhance transparency regarding beneficial ownership (BO) in companies operating in the Philippines. This project, officially called the Hierarchical Applicable Relations and Beneficial Ownership Registry, is designed to create a centralized registry of beneficial ownership information that is easily accessible by various government agencies and partners.

The development of Project HARBOR is particularly significant because improving beneficial ownership information was a critical factor in the Philippines’ removal from the FATF grey list. The FATF has long advocated for improved transparency in the ownership structures of legal entities to prevent money laundering and the financing of terrorism.

“Project HARBOR will streamline beneficial ownership disclosures, promote regulatory transparency, and enhance compliance with global AML/CFT standards,” Aquino stated during the SEC’s press conference.

The registry will feature automated data validation, configurable access levels for authorized users, and advanced analytical tools that help regulators identify complex ownership structures that might conceal illicit activities. Additionally, the system will integrate with the SEC’s existing online company registration platform, the Electronic Simplified Processing of Application for Registration of Companies (eSPARC), further improving efficiency and transparency in business registrations.

Plan #2: Expanding Outreach to Non-Profit Organizations (NPOs)

Another important initiative highlighted by the SEC is the continued effort to engage with non-profit organizations (NPOs), which are often exploited by criminals for money laundering and terrorist financing purposes. In response, the SEC has focused on increasing its outreach and educational programs aimed at NPOs to ensure that they comply with AML/CFT regulations.

NPOs can be vulnerable to misuse due to the large sums of money they manage and the lack of rigorous financial monitoring in some cases. As a result, the SEC is urging these organizations to register with the Commission to help mitigate these risks.

In addition to these outreach programs, the SEC is also collaborating with other regulatory bodies and local government units to expand its outreach efforts across the country. By raising awareness among NPOs about the potential risks and compliance requirements, the SEC hopes to foster a culture of transparency and accountability within this sector.

Plan #3: Strengthening AML/CFT Enforcement Capabilities

As part of its strategy to ensure long-term compliance with global AML/CFT standards, the SEC is seeking stronger support from the government, particularly in relation to Republic Act No. 11765, also known as the Financial Products and Services Consumer Protection Act. This law enables the SEC to take a more aggressive approach in addressing financial crimes, particularly in cases of investment scams and fraud.

Under this law, the SEC has the authority to order the accounting and disgorgement of profits obtained through illegal financial activities, in addition to imposing penalties. This expanded authority will aid the SEC in identifying and pursuing individuals and entities engaged in illegal financial activities more quickly, while also improving the chances of recovering stolen assets.

Furthermore, the SEC has committed to working closely with the Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Pilipinas (BSP), two other critical institutions in the Philippines’ AML framework. Together, they will focus on accelerating investigations and enforcement actions against perpetrators of financial crimes, especially those targeting vulnerable investors.

By strengthening its enforcement capabilities, the SEC aims to deter financial crimes and enhance the overall integrity of the Philippine financial system.

Plan #4: Addressing Crypto Asset Service Providers

The rise of digital assets, particularly cryptocurrencies, has presented new challenges for regulators worldwide, including in the Philippines. Recognizing the potential risks posed by these assets in facilitating money laundering and other illicit activities, the SEC is developing new rules to govern the activities of Crypto Asset Service Providers (CASPs) in the country.

These rules, which are still in the drafting stages, will provide a framework for better oversight and supervision of businesses involved in offering, trading, or facilitating transactions with digital assets. The SEC has emphasized that the rules are designed to enhance consumer protection while maintaining the integrity of the Philippine financial system.

In addition, the SEC is actively seeking public feedback to refine and improve the draft rules before their finalization, which is expected by 2027. This collaborative approach will help ensure that the regulations strike the right balance between fostering innovation and preventing financial crimes.

Conclusion: A Commitment to Long-Term Compliance and Vigilance

The Philippines’ removal from the FATF grey list is a significant achievement, but the journey toward sustained compliance with global AML/CFT standards is far from over. With the launch of initiatives like Project HARBOR, expanded outreach to NPOs, strengthened enforcement capabilities, and regulations targeting crypto assets, the SEC has set a clear path forward to maintain the country’s standing in the international financial community.

As SEC Chairperson Emilio Aquino noted, “While we celebrate this milestone of finally exiting the grey list, our work does not stop here. The SEC reiterates its commitment to implementing the necessary measures in compliance with the evolving global AML/CFT standards, to ensure that the Philippines being on the FATF grey list will finally become a thing of the past.”

The next few years will be crucial as the SEC continues to work towards aligning the Philippines with the best global practices in AML/CFT, ensuring a secure and transparent financial environment for businesses and citizens alike.