Ex-POGO workers could derail Philippines’ FATF grey list exit

Ansh Pandey January 24, 2025

SiGMA news

There are mounting concerns that former POGO operators may pivot to other illegal activities, such as running scam centres, which could present new challenges for Filipino authorities, according to a .

The Philippines’ recent move to ban Philippine Offshore Gaming Operators (POGOs) is seen as a significant step towards enhancing the country’s anti-money laundering (AML) efforts, with the potential to help the nation secure its removal from the Financial Action Task Force (FATF) grey list.

Moody’s analyst Choon Hong Chua described this development as a positive signal, reflecting the government’s commitment to improving financial regulations.

Philippines grey-listed over money laundering

For the unaware, the Philippines was pushed to the FATF grey list back in June 2021 due to its failure to address key gaps in its AML and counter-terrorism financing (CFT) controls, with the illegal casino network being a significant concern for the FATF.

In response, the country ramped up efforts to shut down illegal POGOs, with at least 80 percent of the estimated 400 POGO hubs already ceasing operations. The Presidential Anti-Organized Crime Commission (PAOCC) has provided updates on the dismantling of the illegal gambling sector.

The nationwide shutdown of POGO hubs, which was completed in December 2024, marks a crucial step in addressing these illicit activities. However, confusion remains around some of the data provided by authorities due to the illegal nature of the remaining POGO operations.

Although tackling the POGO issue is central to the Philippines’ efforts to exit the grey list, the FATF has also raised concerns in other areas. These include regulating casino junkets and implementing risk-based supervision for designated non-financial businesses and professions (DNFBPs).

Additionally, the FATF has recommended improving law enforcement’s access to beneficial ownership (BO) information, boosting the use of financial intelligence, and strengthening money laundering investigations and prosecutions. Consequently, Manila authorities must remain vigilant about irregular financial activities, such as scam centres.

Moody’s urges check on non-financial institutions

Choon Hong Chua from Moody’s has also cautioned that the Philippines must continue to focus on regulating non-financial institutions, such as casino operators, to better mitigate money laundering risks.

While corporate organisations are typically less regulated than financial institutions, they often serve high-risk clients, highlighting the need for stricter oversight.

The FATF’s reform agenda further emphasises the need for stricter financial sanctions to counter terrorism and the proliferation of weapons, as well as enhanced measures within the non-profit organisation (NPO) sector.

Despite these ongoing challenges, there is optimism in the Philippines about its prospects for exiting the FATF grey list. The FATF is scheduled to review the country’s progress in February 2025, with officials hopeful for a positive outcome.

The Philippines has already made significant progress in implementing an 18-item action plan, which has led to increased monitoring since June 2021.