AML in Philippines

Money laundering poses a significant challenge in the Philippines, with the illegal drug trade expanding into a billion-dollar industry in recent years. There has been a steady increase in organized financial illegal activities originating from China, Hong Kong, and Taiwan within the country. Reports indicate that terrorist organizations fighting in the Philippines receive funding through illicit activities such as drug and weapons trafficking, as well as money laundering connected to organized crime networks. Laundered funds also stem from the illicit practices of government officials. Credit cards are commonly utilized in drug transactions passing through the Philippines. Due to its growing economy and strategic location along major trafficking routes, the Philippines is particularly susceptible to money laundering and the financing of terrorism. The recent growth of the online gaming industry has further heightened the associated risks. Criminals often profit through corruption and sex trafficking, while terrorist groups operating in the Philippines generate income from activities such as kidnapping for ransom, cocaine trafficking, and arms trafficking. Additionally, the substantial volume of money transfers from Filipinos residing abroad increases the monitoring responsibilities of anti-money laundering authorities.

In the Philippines, the Bangko Sentral ng Pilipinas (BSP) serves as the country’s national bank. The primary objective of the BSP is to uphold market stability in order to encourage consistent and sustainable economic growth. Additionally, the BSP aims to establish and uphold monetary stability, as well as ensure the convertibility of the national currency. As the sole authority responsible for currency issuance, the Central Bank holds exclusive jurisdiction and authority in this domain.

The Anti-Money Laundering Council (AMLC) is a government organization in the Philippines entrusted with the enforcement of the Republic Act, also known as the “Anti-Money Laundering Act of 2001” (AMLA). This legislation rendered money laundering unlawful and mandated that financial institutions under the supervision of the Central Bank comply with detection, recordkeeping, and reporting obligations. Despite the challenges, the Philippine government is reinforcing its anti-money laundering (AML) policy and took further measures in 2019 to enhance its Financial Intelligence Unit (FIU) and promote collaboration among various agencies.

To further enhance interagency coordination and strengthen financial investigations and criminal convictions, the Philippines should consider implementing new initiatives. The AMLC will actively participate in investigations and prosecutions related to terrorism financing, as well as the freezing of assets potentially associated with money laundering or terrorism, in addition to its customary responsibilities as an FIU. It’s important to note that this act was last updated in 2013.

The Anti-Money Laundering/Counter-Terrorism Financing Commission (AMLC) functions as the central authority in the Philippines for combating money laundering and counter-terrorism financing (AML/CTF). It assumes multiple roles, serving as the administrator and manager of the country’s AML/CTF efforts, overseeing the financial intelligence department, and acting as the primary law enforcement organization for anti-money laundering and anti-terrorist funding.

In accordance with state laws, the AMLC is entrusted with the implementation of two key legislations, namely:

  1. The Anti-Money Laundering Act of 2001 (AMLA):
  • Its objectives include safeguarding and preserving the integrity of the Philippine financial system, including the security of bank accounts.
  • It aims to prevent the Philippines from being exploited as a money laundering hub for the proceeds of illegal activities.
  • It encourages active participation in international criminal investigations involving individuals engaged in money laundering operations, aligning with Philippine foreign policy.
  1. The Terrorism Financing Prevention and Suppression Act of 2012 (TFPSA):
  • The TFPSA seeks to protect life, freedom, and property from acts of terrorism and strongly condemns terrorism and its supporters and financiers.
  • It recognizes terrorism as a grave threat to national security and the well-being of the community, criminalizing terrorism financing as an offense against the Filipino people, civilization, and international law.
  • It obliges the Philippines to adhere to international commitments in combating terrorism financing, including the International Convention for the Suppression of Terrorist Financing and other relevant United Nations Security Council measures.
  • It aims to bolster the fight against terrorism by blocking and preventing such offenses, including the freezing and seizure of property or funds, while ensuring the protection of human rights.