Philippines officially exits from EU ‘high risk’ money laundering list

The Bangko Sentral ng Pilipinas (BSP) on Tuesday vowed to continue efforts to combat financial crimes, after the Philippines officially exited the European Union’s (EU) list of countries that are at “high-risk” for money laundering.

“The BSP remains firmly committed to driving financial sector reforms, strengthening anti-money laundering/countering terrorism and proliferation financing (AML/CTPF) supervision, and building a resilient, inclusive financial system that supports economic growth and global confidence,” BSP Governor Eli M. Remolona, Jr. said in a statement.

Mr. Remolona, who also chairs the Anti-Money Laundering Council (AMLC), said they are working on identifying areas where the Philippines can further uphold its commitment to combat financial crimes and maintain global standards.

On June 10, the European Commission approved a regulation that removed the Philippines and seven other countries from its list of “third countries” that were flagged as facing a “high risk” of money laundering and terrorism financing. This regulation took effect on Aug. 5.

The European Commission had welcomed the progress made by the Philippines, Barbados, Gibraltar, Jamaica, Panama, Senegal, Uganda and the United Arab Emirates in strengthening the effectiveness of their AML/CFT (countering the financing of terrorism) regimes.

“Based on the available information, the commission concludes that Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda and the United Arab Emirates no longer have strategic deficiencies in their AML/CFT regimes,” it said.

In February, the Financial Action Task Force (FATF) removed the Philippines from its list of jurisdictions under increased monitoring for dirty money risks, after a successful on-site visit and completion of the recommended action plan.

The Philippines was also removed from the United Kingdom’s list of high-risk third countries last March.

The country was on the FATF’s “gray list” for over three years or since June 2021. This had resulted in the Philippines’ inclusion in the EU’s list of high-risk jurisdictions and the UK’s advisory list, which meant being subjected to stricter customer due diligence measures by member states for business relationships or transactions, the Anti-Money Laundering Council has said.

The BSP said the Philippines’ exit from the FATF as well as the UK and EU watchlists “signals growing international confidence in the Philippines’ AML/CTPF regime.”

“This development is expected to generate benefits, including lower remittance fees and improved relationship of Philippine banks with foreign counterparts, which drives business activities,” it added.

Analysts said the BSP’s commitment to anti-money laundering reforms is “highly significant.”

“It signals to global investors, banks, and regulators that the country is serious about maintaining the integrity of its financial system,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said. “This enhances investor confidence, reduces transaction costs, and improves access to global financial markets.”

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the BSP’s move shows “sustained vigilance and proactive governance in financial regulation.”

“To maintain global AML/CTPF standards and avoid future listings, the BSP can enhance its risk-based supervision, particularly over high-risk sectors like casino junkets and designated nonfinancial businesses,” Mr. Asuncion said.

“Strengthening digital surveillance tools, improving inter-agency coordination with the AMLC and law enforcement, and regularly updating regulatory frameworks in line with evolving FATF standards will be key to sustaining momentum and ensuring long-term compliance,” he added.

The AMLC earlier said it is pushing amendments to the Anti-Money Laundering Act as part of efforts to ensure the Philippines will remain off the FATF’s gray list.

Source: Business World

Remittances likely to remain resilient for rest of 2025

Cash remittances are projected to remain resilient for the rest of the year, potentially surpassing the Bangko Sentral ng Pilipinas’ (BSP) 2.8% full-year growth target, analysts said.

However, they also warned of possible external shocks that could dampen remittance growth.

“We’re on track. First-half growth hit 3.1%, already above BSP’s 2.8% forecast,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said.

“If global labor markets stay resilient and the peso remains competitive, we could even beat the (BSP’s) 2.8% full-year target.”

Money sent home by overseas Filipino workers (OFWs) rose by 3.1% to $16.75 billion in the first six months of the year, with land-based workers contributing the bulk of the increase.

The BSP is targeting a 2.8% growth in remittances this year, and 3% growth for 2026.

Remittance inflows are expected to accelerate ahead of the holiday season, analysts said.

“We expect remittances to remain a constant and reliable source of foreign currency over the next few months, with a seasonal acceleration as we enter the fourth quarter of the year,” Metropolitan Bank & Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa said.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the BSP’s full-year target of 2.8% remittance growth is “well within reach.”

“Remittance flows are expected to remain resilient, supported by seasonal inflows during the ‘ber’ months and improving global labor conditions,” he said.

Analysts warned the US government’s 1% tax on remittances, which will take effect on Jan. 1, 2026, will have a dampening effect on remittances from US-based Filipinos.

“However, the proposed 1% remittance tax in the US could pose downside risks in 2026. While the BSP’s 3% growth target remains achievable, the tax may dampen inflows from the US — currently the largest source — unless mitigated by digital remittance innovations or policy support,” Mr. Asuncion said.

The tax will be applied on cash-based remittance transfers from US-based senders, regardless of citizenship status.

BSP data showed the US remained the top source of remittances to the country in the first half, accounting for 40.1% of total remittances for the period.

“The proposed 1% US remittance tax could dampen inflows (from formal channels) slightly if implemented, but its real impact will depend on scope, implementation, and possible offsets from fintech cost reductions or regulatory responses,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in Viber message.

Mr. Ravelas said the proposed tax is a “red flag,” as it might encourage senders to use informal channels.

“That’s a red flag. The US sends over 40% of our remittances. A 1% tax could dampen flows or push senders to informal channels,” he said. “We’ll need to watch how it’s implemented and prepare support mechanisms for OFWs.”

Mr. Mapa said OFWs have been “creative” in finding ways to send money back home in the past.

“We could still expect remittance flows to remain robust in the near term,” he said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted US protectionist policies and stricter immigration rules could weigh on remittances from the US.

“Trump’s threats of higher reciprocal tariffs and other America-first policies could also slow down global trade, investments, employment including some OFW jobs, and overall world economic growth,” he said in an e-mail. “This could also indirectly slow down the growth in OFW remittances from other countries around the world.”

Source: Business World

Financial confidence growing in PHL but savings still low

The feeling of financial security and confidence in the short term is growing, though long-term confidence is weaker, according to the findings of a survey by Sun Life of Canada, Inc.

“These findings highlight both the resilience and the vulnerability of Filipino households. We are encouraged by the growing financial confidence and commitment to saving, but it’s clear that more support is needed to help families plan for the long term. Sun Life remains committed to empowering Filipinos through financial education, innovative products, and community engagement,” Sun Life Philippines Chief Executive Officer and Country Head Benedict C. Sison said in a statement.

Sun Life surveyed 1,000 respondents from the Philippines between April and May 2025.

Some 66% said they were confident in their ability to manage month-to-month finances, up from 57% a year earlier.

However, long-term financial confidence fell to 64% from 72% due to limited emergency savings.

“One in three Filipinos say that they could not last more than three months without external support following income loss or serious illness,” Sun Life said.

The survey also indicated that respondents are forced to  delay major purchases to focus on day-to-day survival.

Some 61% said they are focused on managing day-to-day expenses over the next 12 months, with 45% saying they are building emergency funds. Starting a business and paying or saving for their children’s education tied at 34%.

When asked what respondents will focus on in the next three to five years, the top priority was building financial security.

About 45% said their long-term priority is saving for retirement, followed by saving for a home and building a financial legacy for their children at 39%, then building an emergency fund at 37%.

“This shift underscores the impact of inflation and cost-of-living concerns on financial planning.

Nearly all respondents reported that inflation has affected their ability to cover monthly expenses. The biggest cost increases were seen in food (73%), energy (60%), health (43%), and transportation (41%). In response, many are cutting non-essential spending and educating themselves about personal finance,” Sun Life said.

Inflation Impact

“Trust in banks (55%) remains high but has slightly declined, and cost remains a barrier to seeking professional advice. The rise of AI and digital sources reflects growing comfort with self-guided learning,” Sun Life said.

The survey also found a growing commitment to financial discipline, with 67% of respondents saying they save or invest at least 10% of their income, with 78% reviewing their investments at least monthly.

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Source: Business World