PHL could exit FATF gray list before ’23 By Bianca Cuaresma
@BcuaresmaBM
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ANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said on Monday the Philippines will likely be taken out from the Financial Action Task Force’s (FATF) gray list “on or before 2023,” as the country works to address deficiencies in its anti-money laundering safeguards. In a message to reporters on Monday, Diokno said the government has been “working relentlessly” to address the deficiencies identified in the 2018 Mutual Evaluation even amid the Covid-19 pandemic. “We remain strongly committed to swiftly resolve the remaining strategic deficiencies [18 from the original 70] within agreed timeframes.
In any case, there is no sanction for being a ‘jurisdiction under increased monitoring,’” Diokno said. Over the weekend, the FATF released its so-called gray list or the list of jurisdictions with strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing. The list comprised 22 jurisdictions, with four new entrants for this year including the Philippines, Haiti, Malta and South Sudan. The Philippines was placed under a 12-month observation period by the FATF in October 2019, following the country’s evaluation of money-laundering safeguards. This observation period has been extended until February 2021 due to the pandemic. However, the
Philippines failed to complete the required standards and was eventually gray-listed by the international organization. “The Philippines has largely addressed the action plans initially indicated in the Mutual Evaluation Report—from 70 down to 18. The National Anti-Money Laundering/ Combating the Financing of Terrorism Committee or NACC is also addressing the remaining ICRG action plans,” Diokno said. “The Philippines will report its progress to the FATF thrice a year —January, May and September; the first report will be this September. The Philippines will be delisted upon successful completion of all action plans—hopefully on or before January 2023,” Diokno added.
Implications on the ground
WHILE being on the gray list is expected to result in an additional layer of scrutiny from international regulators and financial institutions, Rizal Commercial Banking Corporation (RCBC) Michael Ricafort said the impact of the gray listing on the local economy as well as on investments would be “negligible.” Nevertheless, the country would save more time and also save on additional costs, a more desirable scenario if funds/transactions of the country with the rest of the world move with greater ease, if corrective measures/ active plans are adopted, based on global best practices, to help remove the country from the gray list,” he told the BusinessMirror. Continued on A2
PHL EYES RAISING $1B
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n Tuesday, June 29, 2021 Vol. 16 No. 258
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THE Metropolitan Manila Development Authority on Monday (June 28, 2021) installed a trash trap on one of the tributaries of Estero de Tripa de Gallina near Tramo Bridge, Aurora Avenue, in Barangay 156 in Pasay City. The trash trap will help mitigate damage to the pumping stations caused by garbage. NONIE REYES
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By Bernadette D. Nicolas
@BNicolasBM
HE Philippine government is eyeing to borrow at least $1 billion by offering benchmark-sized US dollar-denominated global bonds.
The Philippines is set to sell 10.5-year and 25-year dollar bonds in a bid to obtain more funds for the country’s budgetary support amid the prolonged pandemic. This marks the third time that
the government is tapping the offshore bond market this year after it sold euro-denominated bonds and Samurai bonds earlier this year. With the tenors at benchmarksize, the Philippines is targeting to
raise at least $500 million for each of the two tenors of dollar bonds. The dollar bonds, which have a settlement date of July 6, 2021, are set to mature on January 6, 2032 and July 6, 2046. The dual-tranche bond offering is expected to be rated Baa2 by Moody’s Investors Service, BBB+ by S&P Global Ratings and BBB by Fitch Ratings. Finance Secretary Carlos G. Dominguez III earlier said the government was planning to sell dollar bonds “before rates skyrocket.” In March this year, the Philippine
government borrowed ¥55 billion ($500 million or about P24.2 billion) through its issuance of three-year zero-coupon Samurai bonds. The government also borrowed 2.1 billion euros ($2.53 billion or about P122.4 billion) when it sold its first-ever triple-tranche eurodenominated bonds in April this year. Last year, the government successfully returned to the dollar bond market twice, raising $2.35 billion in April and another $2.75 billion in December. Continued on A2
‘Rebels accessing funds brought on gray list’ By Samuel P. Medenilla
@sam_medenilla
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HE government is now aiming to further improve its anti-money laundering measures after being flagged by a Parisbased watchdog. The Financial Action Task Force (FATF) recently included the Philippines on its “gray list” of 22 territories for policy deficiencies on money laundering.
O n Mond ay, P re s id e nt i a l spokesman Harry Roque said he agrees with the assessment of the FATF, especially since the Community Party of the PhilippinesNew People’s Army, which the government earlier declared as a terrorist group, is still able to access its funds. “They still have funds, which must be closed. So, this [graylisting] is also to the benefit of the republic [with the Financial
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Action Task Force assessment] and we agree that more efforts have to be exerted to remove f u nd i ng f rom t h at ter ror i st group,” Roque said. Roque said the government will try to address this by amending the Anti-Money Laundering and the Counter Terrorism Financing laws. Also part of the government action plan is the reinforcement of money laundering and terrorism
financing investigation and prosecution and campaigns to increase public awareness. Over the weekend, the AntiMoney Laundering Council (AMLC) issued a statement asking for the cooperation of concerned government agencies to implement the said action plan. It warned that failure to address the concerns of the FATF will lead to other countries imposing “countermeasures” against the Philippines.
‘NEXT KEY OUTSOURCING SECTOR IN PHL IS ONLINE CREATIVE FREELANCING’ By Tyrone Jasper C. Piad @Tyronepiad
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NLINE creative freelancing is seen as the next major outsourcing segment for the country given that about 1.5 million Filipinos are already participating in the gig economy. Creative Economy Council of the Philippines (CECP) President Paolo Mercado said in an event on Monday that 1.3 million to 1.5 million Filipinos are already on i nt e r n at ion a l on l i ne platforms for freelancing services, majority of which constitutes creative work. These include web design and multimedia content and editing, he enumerated. “We are already poised that this would become the next wave, in fact, of outsourcing
in the Philippines,” Mercado said. He said that digital creative services and digital contents were least affected segments in the creative sector last year amid the flexibility to work from home. Some of the digital creative services identified by Mercado are digital marketing, web and graphic design. “So especially those involved in digital creative services both for domestic and international clients, they were, at the beginning, some of them were adjusting from work-from-home setups...but overall by the second half of 2020, they were a lready recover ing whi le some of them were even enjoying growth,” Mercado explained. Continued on A2
n JAPAN 0.4384 n UK 67.4686 n HK 6.2577 n CHINA 7.5244 n SINGAPORE 36.1868 n AUSTRALIA 36.8355 n EU 57.9877 n SAUDI ARABIA 12.9517
Source: BSP (June 28, 2021)