During an event by CRIF Philippines, I was asked about what’s going to happen next after our exit to FATF’s Grey List in February of this year.
The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog, that releases grey and black lists of countries in line with measures to combat money laundering and terrorist financing (AML/CFT).
Our exit to the grey list means more opportunities for the country. More global firms will consider investing, given our compliance, and to possibly enjoy competitiveness with potential funds that will become available to the Philippines subsequently. The positive reputational impact of the news will increase the confidence of both investors and lenders to the country.
Moreover, remittances and similar flows of money from outside the country will also be smoother and will probably cost less given the expected increase in confidence (relative to when there are extra tight monitoring measures applied to countries in the grey list). This could mean an increase in remittances soon. This shall trigger more economic activity back in overseas Filipino workers’ home country, since their families will be able to spend more, with transactions hopefully much faster this time.
With incoming money increasing, we can expect further growth with multiplier effects, especially from those money flowing through the backbone of the economy—the micro, small, and medium enterprises (MSMEs). This means more opportunity to expand businesses. more employees to hire, and more good deals to consumers.
In the same discussion, however, I also noted how important it is for us to keep ourselves on our toes so we do not fall back to the said grey list again (the last time was not the first for the Philippines to be included in the grey list). We must continue to apply the same necessary measures to: 1.) tell the world we remain committed to protect the interest of our people when it comes to preventing money laundering and terrorist financing; 2.) get used to doing the right thing, i.e., proper know-your-customer (KYC) practices; and 3.) prepare for new ways bad actors might apply technology to abuse systems and find work arounds to commit crime. Let us not forget that we are not the only ones studying and preparing—the bad actors are on it too.
Fortunately, we have sufficient resources for regulatory technologies (regtech) in the country. These technologies include software, tools, and platforms (some use artificial intelligence), to help organizations comply with regulatory requirements, including those per the Anti-Money Laundering Act (AMLA).