‘High incidence’ of money laundering seen in gaming

By means of Luisa Maria Jacinta C. Jocson, News reporter

THE PHILIPPINES will likely leave the country “gray list” by the Financial Action Task Force (FATF), despite a “high incidence” of money laundering, especially in the gaming sector, Moody’s said.

Choon Hong Chua, senior managing director of Moody’s and head of the Financial Crime Practice Group for Asia PacificFIC and the Middle East said the Philippines is “on track” to leave the gray list.

“It is clear that the country is committed to strengthening the fight against money laundering Ffinancing of terrorism controls (AML/CFT) and has implemented stricter requirements,” he told the newspaper Business in an email interview.

The Moody’s Grid database shows that between 2018 and 2023, the Philippines was among the top five countries in Southeast Asia, with even more money laundering activities taking place over time. Fperiod of five years.

“From 2022 to 2023, the number of added money laundering events in the Philippines increased by 45%,” it added.

Mr Chua said there is a “high incidence” of money laundering related to gambling activities in the country, citing online gambling, casinos and gambling centers.

“In addition to these activities, much of the money laundering activities in the region are also linked to organized crime and complex fraud operations, some of which are set up in the Philippines,” he added.

The Philippines has been on the FATF list of jurisdictions under enhanced surveillance for dirty money activities since June 2021.

The FATF Plenary, the organization’s decision-making body, usually meets in February, June and October.

“We have seen that the current regime is taking an active step to improve the level of AML competence in the banking sector – from the implementation of new regulations to active communication with the entities involved. This stemmed from some of the perceived weaknesses,” Mr Chua said.

He pointed to the government’s ongoing initiatives to “implement stricter controls and reporting requirements and enforce compliance within the EU Ffinancial sector.”

At the beginning of this year, President Ferdinand R. Marcos Jr. instructed all relevant government agencies to expedite theFfortresses to help the country get out of the gray list as quickly as possible.

The Anti-Money Laundering Council also said earlier that it is working to expand investigations and prosecutions related to dirty money this year.

“The private sector also has a role to play in quickly adhering to the requirements to remove the Philippines from the gray list. This requires a joint eFstrength and commitment of both public and private stakeholders,” Mr Chua said.

“The private sector will also need to invest in building capabilities that enable a shift to a faster, more efficient, digitalized system.”

Financial institutions and the private sector as a whole must “participate in the fight against money laundering eFfortresses.”

Mr. Chua also recommended measures to enhance the private sector’s capacity to combat money laundering and strengthen third-party risk management capabilities to help institutions mitigate various risks.

Emerging technologies such as artificial intelligence (AI) and machine learning (ML) can also be used to enhance these FDetection and reporting of financial crimes, Mr Chua said.

“AI and ML can improve Know Your Customer (KYC) workFlow points when it comes to the screening, onboarding and due diligence processes for compliance,” he said.

“KYC workflows can be improved with access to trusted internal and external data sets. Embedding an AI capability, such as a chat interface or a copilot tool, within a customer lifecycle management platform can also help highlight critical information and provide more data points to make an informed decision.”

Mr Chua said people still need to be involved in compliance teams to maximize the potential of these technologies and workflows and “ensure a fair and quality outcome.”

Mr. Chua said AI can be used in screening technologies to “reduce false positives in the name matching process.”

“Real alerts can be prioritized to reduce time to decision when assessing risks,” he added.