Moody’s urges Philippines to monitor money laundering risks

Moody’s has urged the Philippines to remain vigilant against the scourge of money laundering through cryptocurrency and online gambling.

Xiao Chen, an associate director at the global financial analysis house, commented on the challenges after the European Commission opted to remove the Southeast Asian nation from its ‘high-risk’ money laundering category.

As reported by the Philippine Inquirer, the change in status is likely to act as a catalyst for increased international trade opportunities, investment offers, and greater access to EU finance streams, while improving the country’s overall financial reputation and standing.

Chen’s remarks stressed the importance of guarding against complacency, given the extent of the risk posed by bad actors, as well as acknowledging that the Philippines is generally now aligned with international regulatory standards.

The country has also thrived in the recent post-POGO landscape.

“Continued vigilance will be essential, particularly in sectors such as online gaming and cryptocurrency, to ensure that residual risks are effectively managed,” said the Moody’s official.

The update is a welcome and encouraging one for the government and financial sector in the Philippines, but ongoing monitoring and enforcement will be required to ensure there is no lapse and subsequent return to watch-lists.

Eli Remolona Jr, the governor of the Philippines’ central bank, intimated that work has already commenced to track emerging risks, in what is an ongoing arms race against illicit activity. 

He also serves as chair of the Anti-Money Laundering Council, providing an inside perspective on the challenges ahead to maintain the country’s newly acquired status. 

Previously, the Philippines was plagued by dirty money trails and was blacklisted by the Financial Action Task Force (FATF), the Paris-based multinational watchdog, in 2002. 

Three years later, legislative improvements saw the country removed from the list, but enforcement action reversed the listing in 2021 because of 18 specific regulatory failures.

The FATF eased its scrutiny on the Philippines last year, when it was once again removed from the high-risk list.

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