Bans on offshore gambling could be a way for the Philippines to get off a list of countries at high risk of money laundering. Since 2021, the country is on the Financial Action Task Force’s list of jurisdictions at risk for money laundering.
The Philippines is on the global “grey list” of high-risk countries for financial crime since June 2021. The Philippines could be removed from the “grey list” with a new ban on Philippine Offshore Gaming Operators.
Financial Action Task Force compiles the grey list three times per year, and also the infamous blacklist. The FATF website states that a place on the blacklist “damages the reputation of a nation and its international standing”. The list can deter foreign investors and global banks from investing in a country, as well as make it more difficult for them to get credit.
FATF gave 18 actions items to the Philippines that it must complete in order for them to be removed from their list. The Philippines had already taken 15 out of 18 actions that were required, said T Raja Kumar at the June press conference.
The watchdog agency, however, maintained its listing in the absence of further improvements.
Kumar said that the Philippines must quickly take action on three remaining items. These include “demonstrating supervisors use anti-money-laundering and counter-financing-of-terrorism (AML/CFT), controls to reduce risks associated with gambling junkets.”
The end of an era rife with crime
Ferdinand Marcos Jr., Philippine President, ordered POGO to be banned by the end the year on 22 July. Marcos, in his State of the Nation address, accused the industry, among others, of money laundering and financial scamming.
The president stated that POGOs are also linked to “prostitution and human trafficking as well as kidnapping, torturing, and even murder”. The president said: “We must end the grave abuse of our system and its disrespect.”
The ban on POGOs was welcomed by economist Eli M Remolona Jr., Governor of Bangko Sentral ng Pilipinas (the country’s central monetary body).
Remolona, who took office as president in July 2023 has been pushing for the implementation of systems that will strengthen financial stability. He told BusinessWorld that the POGO ban could “lead to a decrease in money laundering which would help us leave the greylist”.
Chester B Cabalza of International Development and Security Corp in Manila said that the ban will encourage more “legitimate investments”.
He wrote that “the Philippines could be freed from the gray-list label”. This would allow for “more investments in legal and moral entertainment to promote inclusive growth”.
The ban, according to research consultant Bienvenido Oplas Sr. will increase the traffic in land-based casino resorts like those located in Manila. He said that if POGOs were banned, Chinese gamblers would be forced to visit the Philippines to play in large casinos.
POGO Ban could Create a Clean Slate
Alex Magno, a political scientist who commented earlier in the year on the Philippines’ lack of political will to leave the list.
He wrote: “We’ve been struggling to get off the gray list. We continue to wallow around in financial purgatory. Our legislators are dragging their heels on reforms, even as our economy is suffering.
The FATF’s pressure can bring about positive changes, as it encourages countries under its watch to improve their financial protocol. Four countries left the list in February: Barbados (Gibraltar), Uganda, and United Arab Emirates. Remolona believes the Philippines will be joining them in 2019.
Remonolo stated that the FATF will determine in October whether or not we’ve completed 18 Action Plans. The FATF will then check between October and the end of January. “January is the departure date.”
The grey list includes the following countries:
Bulgaria
Burkina Faso
Cameroon
Croatia
Democratic Republic of Congo
Haiti
Kenya
Mali
Monaco
Mozambique
Namibia
Nigeria
Senegal
South Africa
South Sudan
Syria
Tanzania
Venezuela
Vietnam
Yemen
On the list are Iran, Myanmar, and People’s Republic of Korea.
