The Philippines has been removed from the Financial Action Task Force (FATF) grey list, signifying progress in addressing money laundering and counter-terrorism financing risks. However, concerns remain over industries such as online gambling and cryptocurrency, which require continuous oversight to prevent illicit financial activities.  

Investment firm Moody’s has warned that while the country’s exit from the grey list strengthens investor confidence and financial stability, risks associated with these sectors persist. The financial crime watchdog noted that online gambling and cryptocurrency are often used for money laundering due to their digital nature and the difficulty in tracing transactions.  

Growth of online gambling and regulatory challenges  

The online gaming sector in the Philippines has experienced rapid growth, with revenues reaching PHP 112 billion (€1.8 billion) in 2024. A significant portion of this revenue comes from electronic gaming, attracting domestic and foreign players. The government has taken steps to regulate the industry, including the recent ban on Philippine Offshore Gaming Operators (POGOs), but challenges remain in ensuring compliance and preventing illicit activities.  

Analysts said the shift towards locally licensed online gaming entities, known as Philippine Inland Gaming Operators (PIGOs), introduces new risks. While PIGOs are subject to local regulations, their digital nature still makes them vulnerable to money laundering schemes. Industry experts stress the importance of robust monitoring and enforcement to prevent financial crimes linked to the gaming sector.  

Cryptocurrency risks and calls for stricter regulations  

Cryptocurrency is another concern, with regulators warning that digital assets are frequently used for cross-border money laundering and scams. The decentralised nature of cryptocurrencies allows transactions to bypass traditional financial controls, making them an attractive tool for illicit activities.  

Filipino Senator Sherwin Gatchalian has called for a reassessment of cryptocurrency regulations, citing its use in fraudulent schemes and financial crimes. Lawmakers are considering new measures to strengthen oversight of digital assets, ensuring that they do not become a loophole for money laundering and terrorism financing.  

Economic impact and the path forward  

The Philippines’ removal from the FATF grey list is expected to boost investor confidence and enhance the country’s position in the global financial system. The government anticipates increased trade and foreign investments, particularly in the services sector, which contributed $37.4 billion in exports in the first nine months of 2024. Despite these gains, experts argue that further improvements in infrastructure and supply chains are necessary to attract investments beyond services.