The Philippines After FATF Grey List Exit: What It Means for Financial Institutions and Compliance

Introduction

In a major step forward for the country’s financial system, the Philippines has officially exited the FATF grey list, marking a milestone in its efforts to combat money laundering and terrorist financing. This achievement is more than a regulatory success—it reshapes the outlook for the financial services industry, enhances investor confidence, and opens doors for smoother cross-border financial flows.

But what does this really mean for banks, fintechs, and compliance professionals operating in the Philippines? In this blog, we break down the implications of the exit, the reforms that made it possible, and what financial institutions must do next to sustain progress and stay ahead of future threats.

What Is the FATF Grey List?

The Financial Action Task Force (FATF) is an intergovernmental organisation that sets global standards for combating money laundering (AML), terrorism financing (CFT), and other financial crimes. Countries that fall short of these standards are placed on what’s known as the “grey list”—a list of jurisdictions under increased monitoring due to strategic deficiencies in their AML/CFT frameworks.

Being grey-listed carries significant consequences:

• Heightened scrutiny from foreign financial institutions and regulators

• Challenges in maintaining correspondent banking relationships

• Increased compliance costs and due diligence burdens

• Reputational damage that can deter investment

The Philippines was added to the FATF grey list in June 2021, primarily due to gaps in supervising high-risk sectors, delays in enforcement, and weaknesses in identifying beneficial ownership structures. Since then, the country has taken decisive steps to address these concerns.

How the Philippines Got Off the Grey List

The country’s removal from the FATF grey list didn’t happen overnight. It was the result of a coordinated national effort involving regulators, law enforcement agencies, and financial institutions.

Key reforms included:

• Stricter regulation of high-risk sectors such as Designated Non-Financial Businesses and Professions (DNFBPs), including casinos, real estate agents, and corporate service providers

• The Anti-Financial Account Scamming Act (AFASA), which criminalised money mule activities, phishing, and synthetic identity fraud

• Mandatory registration and monitoring of Money or Value Transfer Services (MVTS), many of which were previously unregulated

• Implementation of GoTRACS (GoAML Transaction Reporting and Compliance System) to improve reporting of suspicious and covered transactions

• Integration of digital ID systems (PhilSys) into customer onboarding and KYC processes

The Anti-Money Laundering Council (AMLC), in collaboration with the Bangko Sentral ng Pilipinas (BSP) and private-sector stakeholders, played a central role in ensuring that these reforms were implemented, monitored, and reported to FATF.

In 2024, FATF acknowledged that the Philippines had substantially completed its action plan. Following a final review, the country was removed from the grey list in early 2025.

What This Means for Financial Institutions

Exiting the FATF grey list marks a turning point for the Philippines, particularly for its financial institutions. The move offers clear and immediate benefits—but also carries expectations for continued vigilance.

✅ Improved Global Reputation

With the grey list tag lifted, the Philippines can position itself more favourably in global finance. This enhances the country’s credibility and lowers perceived risk among international partners.

✅ Smoother Cross-Border Transactions

Banks and fintechs may find it easier to establish or restore correspondent banking relationships, especially with institutions in stricter jurisdictions. This will help improve liquidity, foreign remittances, and cross-border payments.

✅ Reduced Due Diligence Burden

Previously, Philippine financial institutions often faced extended scrutiny from foreign banks and investors. With the FATF grey list exit, enhanced due diligence (EDD) requirements may ease, reducing compliance overhead.

⚠️ Ongoing Expectations from Regulators

While the Philippines is no longer under increased monitoring, FATF expects continued compliance with its standards. Institutions must maintain robust AML/CFT programs—not just to avoid future scrutiny but to proactively defend against evolving threats.

Opportunities and New Responsibilities

The FATF grey list exit is a strong validation of progress—but it’s not a time to relax. The post-exit phase is a critical period for maintaining momentum and showing sustained commitment.

Evolving Risks Remain

Emerging threats such as account takeover fraud, digital mule networks, and investment scams are on the rise. With digital transactions growing in volume and complexity, the nature of financial crime continues to shift.

Regulatory Innovation Will Continue

Expect more changes from BSP, AMLC, and the Securities and Exchange Commission (SEC). New directives around digital onboarding, real-time monitoring, and crypto regulation will shape the next phase of compliance.

Intelligence-Led Compliance Will Be Key

The most effective institutions will not rely on checklists—they will embrace behavioural analytics, risk-based monitoring, and community-sourced intelligence to stay agile and informed.

Collaboration Matters More Than Ever

Public-private partnerships and intelligence-sharing platforms will be essential for sustaining progress. No institution can fight financial crime alone.

How Tookitaki Supports a Post-Grey List Philippines

As the Philippines enters a new chapter in its AML journey, institutions will need technology partners who can help them go beyond compliance and into proactive risk management. That’s where Tookitaki comes in.

Advanced AML & Fraud Detection

Tookitaki’s FinCense platform is an end-to-end compliance suite offering AI-powered transaction monitoring, smart alerting, and automated investigations—all in real time.

It empowers banks and fintechs to:

• Detect high-risk transactions using behaviour-based analytics

• Reduce false positives by over 90%

• Rapidly deploy new AML scenarios aligned with regulatory updates

• Leverage cross-border intelligence through the AFC Ecosystem

Local Impact, Global Standards

Tookitaki has worked with leading institutions across Southeast Asia—including the Philippines—to enhance detection accuracy and streamline regulatory reporting. FinCense supports local regulatory alignment while adhering to global FATF recommendations.

Built for What Comes Next

Whether it’s crypto risk, complex layering, or unregistered DNFBPs, Tookitaki enables financial institutions to respond faster and smarter. As regulatory expectations evolve, our platform evolves with them.

Conclusion: From Grey List Exit to Global Leadership

The Philippines’ exit from the FATF grey list is a commendable achievement and a sign of national resilience and regulatory progress. But it is not the end—it’s the beginning of a new era where continuous improvement, collaboration, and technology adoption will define success.

For financial institutions, this is the time to rethink legacy systems, strengthen compliance frameworks, and embrace intelligent tools that can evolve alongside financial crime.

At Tookitaki, we’re proud to support this transformation. As the trust layer for financial institutions, we help our partners build resilience, protect customers, and stay ahead of tomorrow’s risks.