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

Cash remittances up 2.9% in May

Money sent home by overseas Filipino workers (OFWs) rose in May compared to a year earlier, Bangko Sentral ng Pilipinas (BSP) data showed.

At $2.971 billion, personal remittances were 3.0 percent higher than the $2.884 billion recorded in the same month last year. It was slightly lower, however, compared to the $2.975 billion posted in April.

Growth, meanwhile, was also slower than the year-to-date high of 4.1 percent in April and the 3.7 percent seen in May last year.

The latest monthly count pushed the January-May remittances tally to $15.343 billion, up 3.0 percent from the $14.89 billion recorded in the same period last year.

In May alone, money sent home via banks totaled $2.658 billion, 2.9 percent more than the $2.583 billion posted a year earlier. Again, it was slightly lower than April’s $2.664 billion.

Source: Business World

Growth also slowed from 4.0 percent a month earlier and 3.6 percent in May 2024.

Year to date, cash remittances totaled $13.766 billion, up 3.0 percent from the $13.365 billion recorded in January-May last year.

The United States continued to account for the biggest share of overall remittances at 40.2 percent, followed by Singapore (7.4 percent), Saudi Arabia (6.4 percent), Japan (5.0 percent) and the United Kingdom (4.6 percent).

Rounding out the top 10 were the United Arab Emirates (4.2 percent), Canada (3.3 percent), Qatar (2.9 percent), South Korea (2.8 percent) and Taiwan (2.7 percent).

Remittance data by source has limitations, the BSP noted, with the US appearing to be the main origin, as remittance centers in cities abroad commonly course the money through correspondent banks that are mostly located in the US.

Asked to comment, Reyes Tacandong & Co. senior adviser Jonathan Ravelas said that 3.0-percent remittances growth could be sustained this year given continued demand for Filipino workers abroad.

Other markets, such as the European Union and Southeast Asian neighbors, should be pushed, however, he said, otherwise growth could slow to 2.70 percent.

OFW remittances totaled $38.341 billion last year, up 3.0 percent from $37.21 billion in 2023. Based on the latest balance of payments forecasts from the BSP, remittances for this year and the next year will likely be lower at $35.5 billion and $36.5 billion, respectively.

Source: Manila Times