THE Bangko Sentral ng Pilipinas (BSP) has urged banks and other supervised financial institutions to step up their efforts as the country prepares for its 2027 mutual evaluation (ME) of its anti-money laundering and counterterrorism and proliferation financing (AML/CTPF) framework.
In a circular letter, the central bank advised all BSP-supervised financial institutions (BSFIs) of the upcoming evaluation, which will serve as an in-depth assessment of the country’s AML/CTPF framework and how effectively it is being implemented.
“All BSFIs are enjoined to extend their full cooperation and active participation in the BSP’s ME-related activities and data-gathering initiatives, until the adoption of the ME Report, in support of the Philippines’ efforts to achieve a successful ME,” BSP Deputy Governor Lyn Javier said.
Javier said the evaluation will examine both the country’s technical compliance with global standards and the effectiveness of its measures in achieving their intended outcomes.
The Philippines’ fourth-round mutual evaluation is scheduled for this year and will be conducted under the Financial Action Task Force’s (FATF) global fifth-round mutual evaluation process.
The Philippines was included on the list in June 2021 but was removed in February 2025, following reforms in risk-based supervision, law enforcement and the prosecution of money laundering and terrorism financing cases.
The development was seen as helping lower financial transaction costs and make the country more attractive to investors, among others.
Unlike an assessment focused mainly on whether the necessary laws and regulations are in place, the latest FATF methodology puts greater emphasis on the risks and circumstances facing each country and on whether its AML/CTPF measures are working effectively in practice.
The BSP said data and information from banks and other supervised financial institutions, as well as from credible sources, will be critical in demonstrating the adequacy and effectiveness of the country’s supervisory framework and the preventive measures implemented by financial institutions.
“[BSFIs] may be engaged to provide strategic insights on the Philippines’ sustained compliance with FATF standards and global best practices during the [mutual evaluation],” Javier said.
This cooperation will continue until the adoption of the mutual evaluation report, Javier said, as part of the country’s efforts to secure a successful assessment.
The mutual evaluation will have two main components: technical compliance and effectiveness.
Technical compliance will determine whether the Philippines has the necessary laws, regulations and other legal instruments in place to meet the technical requirements of the FATF’s 40 recommendations.
The effectiveness component, meanwhile, will assess whether the country’s AML/CTPF systems are actually working and the extent to which the Philippines is achieving defined outcomes.
Under the FATF methodology, evaluators will examine 11 key areas or immediate outcomes, to determine the effectiveness of a country’s efforts.
